Coin Center, a crypto-related think tank is suing the US Department of Treasury and the IRS. Information related to the lawsuit released on Friday says that an item to do with a requirement related to crypto tax reporting is unconstitutional. This requirement is part of the infrastructure law that was written and adopted in 2021.
The tax reporting requirement will be effective as of 2024. It requires all US taxpayers who get more than $10,000 in crypto to report Social Security numbers and other essential sender information. This provision is one among many of the infrastructure bill. According to Coin Center, it also contains a controversial reporting requirement and applies to brokers. This specific inclusion resulted in big protests and a massive backlash in the industry and was unsuccessful.
According to Coin Center, such a mandate requires American taxpayers to share very personal details with each other and the government. Coin Center is worried that this rule will make all Americans dealing in crypto to store sender information for at least a year. This, in case of “related” transactions which amount to $10,000 or more.
The lawsuit specifically names Charles Rettig who heads the IRS and Janet Yellen, the current Treasury Secretary. Industry watchers, investors and analysts are watching closely to see what the fallout of this lawsuit would be. The clause in question is Section 6050I and challenges a person’s freedom to associate. Coin Center also quoted a ruling made by the Supreme Court which prohibits the government from needing organizations to maintain and report member lists.