New Law Requiring US Citizens To Report Crypto Payments Worth $10,000 Coming Soon: Coin Center
A new US law requiring citizens to report crypto payments worth more than $10,000 is primed to take effect in January after a legal challenge to the requirement was swatted down in court last week.
The legal challenge began last year when the crypto advocacy group Coin Center and a handful of other plaintiffs sued the U.S. Treasury Department and the Internal Revenue Service (IRS) over a 2021 amendment to Section 6050I of the tax code.
The amendment will require citizens who receive crypto payments of $10,000 or more to report the transaction and the personally identifiable information (PII) of the sender to the government.
Coin Center argued in its lawsuit that the new requirement would force the disclosure of “intrusive details,” as well as reveal other transactions the person may have made due to the nature of crypto’s public ledgers.
“The reports required by the reporting mandate would therefore uncover a detailed picture of a person’s personal activities, including intimate and expressive activities far beyond the immediate scope of the mandate. The reports would give the government an unprecedented level of detail about transactions within a realm where users have taken a series of steps to protect their transactional privacy.”
The presiding US District Judge in Kentucky, however, dismissed the lawsuit last week, calling it “premature.”
“If the Court declines to reach Plaintiffs’ claim that Congress exceeded its enumerated powers, Plaintiffs are unlikely to face significant hardship as a result. The amended §6050I will not require Plaintiffs to disclose information until 2024, and regardless, Plaintiffs have not submitted any plausible allegation from which the Court can conclude that the Government will use the information disclosed to implement a surveillance regime to track their other unrelated transactions. This factor also weighs against judicial review and a finding of ripeness.”
Coin Center executive director Jerry Brito says on Twitter that they plan to appeal to the Sixth Circuit “right away.”
Chief policy officer of the Blockchain Association Jake Chervinsky says he isn’t too concerned about the judge’s recent dismissal.
“This is a small setback, but only a procedural one. The court isn’t saying Coin Center is wrong, only that it sued too soon.”
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