Dear [CLIENT NAME],

The Infrastructure Investment and Jobs Act (IIJA) contains two virtual currency (aka cryptocurrency) reporting provisions that will soon require IRS reporting, such as 1099-Bs for virtual currency transactions.

The first provision will require virtual currency exchanges such as Coinbase and Robinhood, among others, to furnish Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, starting with the 2025 tax year. Currently, these exchanges may provide a year-end statement detailing your short-term and long-term gains to help you with your tax reporting requirements, but this information is not reported to the IRS — yet.

The second provision states that IRS Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business, will include virtual currency transactions for transactions that must be reported after December 31, 2023.

Currently, Form 8300 must be filed by any taxpayers engaged in a trade or business and who, in the course of the trade or business, receive more than $10,000 in cash in one transaction (or two or more related transactions). (IRC §6050I(a)) Any transactions conducted between the same two parties in a 24-hour period are automatically deemed to be related transactions. However, transactions that occur more than 24 hours apart can also be considered related transactions depending on the facts and circumstances — for example, multiple payments made for the sale of a single item.

Please contact our office if you would like to discuss how either of these new reporting provisions will affect you or your business.

Sincerely,

Your tax professional