Reporting of digital assets as cash delayed until IRS issues regs.

Businesses do not have to report the receipt of digital assets as cash in determining whether cash received in a single transaction is over the $10,000 threshold for purposes of reporting under Sec. 6050I until the IRS issues final regulations, the Service said Tuesday in Announcement 2024-4.

The Infrastructure Investment and Jobs Act, P.L. 117-58, revised the rules in Sec. 6050I to require taxpayers engaged in a trade or business to consider digital assets to be cash as defined in Sec. 6050I(d). The change was to be effective for filings made after Dec. 31, 2023.

The IRS plans to propose regulations that will provide more information and procedures for reporting the receipt of digital assets, allowing for comments in writing and, if requested, a public hearing.

The announcement does not change the rules for reporting cash received that were in effect before the enactment of the Infrastructure Act, which became law in November 2021. Cash payments over the $10,000 threshold must still be reported on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, within 15 days of receiving the cash.

AICPA advocacy

In a letter sent in November 2023 to IRS and Treasury officials, the AICPA called for, among other things, a delay in the effective date of the changes to Sec. 6050I (including the change to treating digital assets as cash for purposes of the Sec. 6050I reporting requirements) made by the Infrastructure Act until final regulations are issued. The AICPA also requested guidance on other aspects of Sec. 6050I in an October 2022 letter.

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