The reporting rule was included in a 2021 infrastructure law which also galvanized the industry over a separate broker rule.
AUSTIN, Texas — Crypto think tank Coin Center filed a suit against the U.S. Treasury Department and Internal Revenue Service on Friday, claiming a crypto tax reporting requirement enshrined in a 2021 infrastructure law is “unconstitutional.”
The requirement, which will take effect in 2024, requires U.S. taxpayers who receive over $10,000 in cryptocurrency to report the social security numbers and other personal information of the sender. The provision was one of several included in a 2021 infrastructure bill, which also included a controversial crypto tax reporting requirement which applied to brokers. That provision galvanized a massive industry backlash, though it was ultimately unsuccessful.
“The reporting mandate would force Americans using cryptocurrency to share intrusive details about themselves, both with each other and with the federal government,” the lawsuit said. “Under the terms of the mandate, everyday senders and receivers of cryptocurrency would be forced to reveal their names, Social Security numbers, home addresses another personal identifying information.”
According to the suit, Coin Center is concerned that these rules would require Americans to store sender information for up to a year in case any given set of transactions could be deemed “related,” if the total ultimately reaches $10,000 or more.
Treasury Secretary Janet Yellen and IRS head Charles Rettig are both named defendants in the suit.