US Government to Delay Data Tracking, Pushing Crypto Tax Collection Further

The U.S. Internal Revenue Service (IRS) has announced a one-year delay in the implementation of new tax reporting requirements for cryptocurrency transactions. This significant shift, outlined in the detail US Crypto Tax Reporting: A 2025 Deadline and its Ripple Effects, means brokers now have until the start of 2025 to adapt to the new regulations. The delay applies only to crypto sales.

Why the Delay in Crypto Tax Reporting?

According to a Bloomberg report, the Internal Revenue Service and Treasury Department have likely pushed the date for data tracking to January. This postponement aims to provide crypto brokers sufficient time to prepare for the complexities of the new reporting standards. The U.S. Department of the Treasury's Internal Revenue Service will require crypto brokers to file 1099 forms like their traditional investment-firm cousins, but decentralized.

Impact of Delayed Crypto Tax Reporting

The delay raises concerns about potential revenue loss. A group of seven U.S. senators claimed that delaying implementing certain tax reporting requirements for crypto could cause the IRS to lose roughly $50 billion in annual revenue. The IRS postponed new crypto tax reporting rules until the start of 2025 to allow brokers time to adapt to the new regulations.

What Does This Mean for Crypto Investors?

While the delay provides a temporary reprieve for crypto brokers, investors should remain vigilant about their tax obligations. It's crucial to accurately track all cryptocurrency transactions and understand the evolving tax landscape. Staying informed will help ensure compliance when the new regulations eventually take effect.