Tell HN: Cryptocurrency transactions >$10k require filing Form 8300 with the IRS | Hacker News Reader

Tell HN: Cryptocurrency transactions >$10k require filing Form 8300 with the IRS

40 pointsbidandanswer13 comments

To paraphrase, historically, all cash transactions worth more than $10k that occurred in the US or by a US-based business must be reported on IRS Form 8300. Failure to report within 15 days could result in a felony charge.

Wires, ACH transfers, and certain types of checks do not count as cash in this context.

In 2021, congress passed the Infrastructure Investment and Jobs Act. Snuck into this act was a line that expanded the definition of cash to include "digital assets" [1]. This new definition applies to all forms filed after December 31, 2023.

This means, as of yesterday, all cryptocurrency transactions worth >$10k must be reported via Form 8300.

However, Form 8300 is woefully incompatible with the nature of such transactions. This is some of the information you must attempt to gather for the form:

Payer's

- First & Last Name

- Address

- Social Security Number

Other

- "Digital Asset" is not one of the options for the type of cash received

- If paid by a DAO or protocol, it is unclear who, if anyone, can be specified as the person or business that paid you. They do not have a name, address, or social security number.

The IRS will soon be inundated by hundreds of thousands (I may be off on the low side by many orders of magnitude) of half-completed forms.

Whether or not the form is constitutional is a related legal question, the answer to which seems to be leaning "yes," unfortunately.

It is disheartening that opaque, incomplete reporting infrastructure is coupled with severe financial and criminal penalties.

Please, reach out to your congressperson and urge them to force the IRS to provide more clarity and guidance on this issue. Preferably with haste!

1. https://www.congress.gov/bill/117th-congress/house-bill/3684/text

> Please, reach out to your congressperson and urge them to force the IRS to provide more clarity and guidance on this issue.

Good luck with that, considering that the vagueness and uncertainty is almost surely the purpose of such measures, rather than an unintended consequence.

Today's regulatory landscape operates not by prohibiting things (which would be open to legal and social challenges), but by making compliance prohibitively expensive, or outright impossible.

> Today's regulatory landscape operates not by prohibiting things (which would be open to legal and social challenges), but by making compliance prohibitively expensive, or outright impossible.

This is a weird view and absolutely inapplicable to most things. It's basically a fantasy pushed by some politicians to get votes.

The form is just out of date.

This is incorrect. The IRS only requires the filing of form 8300 if, and only if, you've received a transaction in excess of $10k _during the course of your trade or business_[1]. It does not apply to private citizens engaging in personal activities, such as trading digital currency.

This is also not a new thing; it's the same reporting you've always had to do when you engage in transactions outside of the banking system (e.g., in cash).

[1]: 26 USC §6050I, "Any person who: (1) is engaged in a trade or business, and (2) who, in the course of such trade or business, receives more than $10,000 in [cash, including digital assets]..."

Are you a lawyer?

The OP law link clearly amends the section to add ‘digital asset’, so someone somewhere thought this section didn’t always apply to crypto transactions.

The trade or business caveat does seem important, but who says ‘trading digital currency’ is always a ‘personal activity’? I’d bet good money the IRS has a different opinion.

Personally, my takeaway is that if someone is regularly getting $10k transactions in crypto, they can probably hire good accountants and lawyers to figure this out for them, so I’m not too worried. Can wait for the clarifying court opinion to come out.

You must be mistaken about "all transactions". Cause that would apply to every single movement of money between your own regular bank accounts too. And every mortgage and loan payment of >$10k.

If it's a big problem, can you ask the DAO to mail you a check instead?

It's a DAO; it doesn't necessarily have a bank account.

Reply on news.ycombinator.com