Crypto Investors: Do You Pay Tax on Your Crypto Gains?

The government wants to know about your crypto transactions

Cryptocurrency brokers and crypto investors got a temporary reprieve from a new reporting requirement, but the clock is ticking.

In 2021, Congress passed a law (the Infrastructure Investment and Jobs Act) that requires brokers of digital assets to send to the IRS details of the gross proceeds of their customers’ transactions.

It seems lawmakers suspect that not all investors are reporting the gains of their crypto transactions in their tax returns. To enhance compliance, crypto brokers will be enlisted to report the proceeds of transactions directly to the IRS.

What is the reason for the delay?

This reporting requirement was supposed to become effective for transactions already this year. But the IRS and the Treasury Department said on December 23 they have not finished writing the rules to enforce the requirement.

Among other things, they are still working on the definition of a broker for these purposes. But the law starts with an extremely broad formulation of who is a broker:

any person who, for consideration, is responsible for regularly providing any service effectuating…