File 8300

01.

What is going on?

If you spend significant time and effort on crypto, in order to make a profit, a new Biden-era law is going to require you to report any crypto transaction you receive greater than $10,000. The new rule has been paused for now, but when it becomes active, you will have 15 days to file before facing penalties. Sign up to hear when the final reporting rules are released, and to hear about our service to file them automatically for you.

02.

Does this matter to me?

It depends! Do you put time and effort into your crypto portfolio? Do you expect it to make a profit from the appreciation of assets?If "the time and effort you put into" an activity "indicate you intend to make it profitable" and you "expect to make a future profit from the appreciation of the assets used in the activity", the IRS can determine that you are doing that activity as a trade or business (IRS Pub. 535).If that applies to you, and you receive $10,000 or more in "cash" in the course of that trade or business, you are required to report it to the IRS on Form 8300 (26 USC § 6050I). Biden's Infrastructure Investments and Jobs Act of 2021 adds an amendment that says crypto "digital assets" are treated as cash and have to be reported this way (135 Stat. 429 § 80603(b)(3)), as of January 1, 2024. And you're required to report whether the $10,000 was in one transaction or multiple related transactions (26 USC § 6050I(a)(2)). This isn't a tax on those crypto transfers, but you still have to report them to the IRS. (The reason is basically, they are trying to catch money launderers, and they already have all of the info on fiat wire transfers from banks.)You have just 15 days after the transaction to file Form 8300 before penalties start to kick in. And if you don't file, the penalty is $310 per transaction up to an annual maximum of $3,783,000 (26 USC § 6721(a)(1)). If the IRS determines that you have an "intentional disregard of the filing requirement", then the penalty is raised to between $31,520 and $126,000 per transaction, with no annual maximum (26 USC § 6721(e)(2)(C)).

03.

Obviously I can't file that for crypto!

Of course, in the world of crypto, there are all sorts of things that will make it difficult to fill out Form 8300. If someone sends you coins without any KYC, if you collect an airdrop, or receive a staking yield, you obviously won't have an address and tax ID number for every transaction. Fortunately, it is possible to avoid a penalty for incomplete information if you can show that it was due to "reasonable cause" and events outside your control. Still, you'll have extra paperwork to do to prove that you had reasonable cause, that the events were outside your control, and to prove that you tried and failed to get the info for the form. There are forms and procedures you have to follow (IRS Pub. 1586). It can all get pretty annoying.For now, the Treasury Department has said that the requirement will not become effective until they make a further announcement about how to file (6th Cir. 23-5662 Docket #21). But rather than having to follow that yourself, leave it to us!Sign up for our email list below, and we'll send you an email when the reporting requirement goes into effect. We'll also let you know about our service to file Form 8300 and satisfy the reasonable-cause procedures for transactions where you receive tokens from a protocol, smart contract, DAO, or something else that can't give you the normally-required information.

Navigate New Crypto Reporting Rules with Ease

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Facing the complexities of the new IRS crypto reporting requirements? We simplify the process for you. Sign up to receive updates on the latest rules and access our seamless Form 8300 filing service. Ensure compliance, avoid penalties, and keep your focus on your crypto investments.