Over a year ago, Citrin Cooperman released an alert breaking down cryptocurrency reporting requirements that would go into effect for 2023. This included the filing of Internal Revenue Service (IRS) Form 8300 to report payments of $10,000 or more in cryptocurrency. Yet today, there are still unanswered questions pertaining to the intricacies of cryptocurrency transactions and how these kinds of payments should be reported on the existing form. Four key issues include:

Whether or not trades need to be reported

For example, if someone is receiving ETH for USD, or some other cryptocurrency, does this need to be reported? The exact wording of Form 8300’s instructions seem to indicate that it does. Although, in many cases, such as purchasing ETH from Coinbase, issuing Form 8300 to Coinbase does not seem logical.

How to complete Part 1 of Form 8300

Part 1 of Form 8300 is for listing the name, contact information, and taxpayer identification number of the individual(s) who provided the payment of $10,000 or more. This is most likely not available when dealing with a business paying electronically. In that case, “N/A” may be an appropriate response for the first name and last name box, but at this time, there has been no guidance from the IRS on this.

Bulk filing capability

It appears to be possible to bulk file Form 8300 with an XML file, but it takes some custom coding to build it. Some market participants may have over 100 of these transactions every month, so it may be helpful for those companies to start to build out processes for collecting data filing.

International considerations

There are many different permutations of companies with an international presence, particularly in the digital asset industry. Companies may be partially located in the U.S. due to the presence of revenue generated there, shareholders living there, intellectual property located there, employees living there, a parent or subsidiary located there, etc. The Treasury Department has yet to release any additional guidance on what might fall under the purview of Form 8300 from that perspective.

The Treasury Department and IRS recently announced that these requirements will not be enforced for digital asset transactions until they provide additional guidance, answering the questions above, among others. To read the full announcement, click here.

As always, Citrin Cooperman’s Digital Asset Industry Practice will continue to monitor for additional guidance and updates to these reporting requirements. If you have any questions, please contact your Citrin Cooperman tax professional, Mark DiMichael at mdimichael@citrincooperman.com, or our Digital Asset Committee at cryptocommittee@citrincooperman.com.