Community members have expressed their frustration through social media posts and a song over new rules that require crypto users to report transactions worth more than $10,000 to the United States Internal Revenue Service (IRS).
The new crypto tax reporting obligations for U.S. citizens came into effect on Jan. 1. The rules oblige crypto brokers to send personal data to the IRS for transactions of over $10,000. This includes the sender’s name, address and social security number.
The law also set a deadline of 15 days to complete the report. However, requirements such as this may be challenging to meet due to the nature of on-chain transactions, according to Coin Center executive director Jerry Brito. He said many users “will find it difficult to comply,” as they could risk being found guilty of a felony.
Apart from Brito, members of the community were frustrated with the law. Adriano Feria called the law “stupid” and the officials that created it “idiotic.” In a post on X (formerly Twitter), Feria said that the IRS should be told that transactions are “push only” and cannot be rejected by the receiver.
Someone should tell the IRS that there is no such a thing as "accepting" a crypto payment. Transactions are push only and cannot be rejected by the receiver.
— AdrianoFeria.eth ️ (@AdrianoFeria) January 4, 2024
Anyone in the world could send the SEC's head, Danny Werfel, over $10k in crypto and he would inevitably become a felon.…
The community member stressed that there is “no such thing” as accepting a crypto payment. As an example, Feria said anyone can send the U.S. Commissioner of Internal Revenue Daniel Werfel $10,000 in crypto, and he would “inevitably become a felon.”
Ryan Adams, founder of investment firm Mythos Capital and author of the popular decentralized finance newsletter Bankless, shared similar sentiments and highlighted in an X post that there are no instructions for filing the report. On the other hand, some interpreted the law as a way to prevent people from selling their crypto.
Meanwhile, singer Jonathan Mann described the law as draconian and wrote a song about it. Within its lyrics, Mann described how one of his nonfungible token (NFT) songs sold for 5.3 Ether (ETH), worth over $10,000.
In response to the new draconian IRS law that makes receiving $10k or more in crypto a felony w/o KYC, I have made:
— 15 years of song a day (@songadaymann) January 3, 2024
"THIS SONG IS A FELONY"
collect for .001: https://t.co/SgCLiX3WOh pic.twitter.com/IbuspEbWcF
The singer explained in the song that apart from the buyer’s ENS name, their details are not available, showing that it’s impossible to provide the actual name, address and social security number of the crypto sender in this case. “There’s a law on the books now that says that what I did was criminal accepting that money in exchange for a song,” he sang.
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