The IRS is Pausing 6050I (For Now)

Welcome back to another Triple Entry – assuming you’re still reading this thing as you ramp up for another busy season. For you non-accountants, that’s when we stock up on Costco snacks, tell our friends and families goodbye, and isolate ourselves from the outside world to spend four months straight in Excel spreadsheets.?

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Speaking of busy season, we’ve been thinking. ??

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When we started Triple Entry, we set out with aspirations of becoming the?Matt Levine ?of crypto, churning out witty, 3,000-word deep dives on relevant crypto finance topics every two weeks.?

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And judging by the growth of Triple Entry, a number of you appreciated that.?

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But let’s be honest. You’re insanely busy. Most weeks (especially Jan - Apr), you don’t have time to read an entire dissertation on crypto tax laws.

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So, we’re changing things up a bit.?

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Welcome to Triple Entry 2.0,?where we continue to dish up the crypto news that’s most relevant to finance and accounting professionals, but now,?in 5 minutes or less.

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We're still The Web3 Accounting and Finance Newsletter you know and love (or at least tolerate), but now with a sharper focus to help you cut through the crypto hype and stay current on crypto tax, accounting, and policy updates.

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In this entry, we’re covering:

• ?? The IRS pressing “pause” on 6050I (yay, no felonies for us!)
• ?? Some not-so-good news on the ETH ETFs (but a valid point)
• ???? Advice for those looking for a tax accountant (you’d be surprised)

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Let’s open the books!

The Main Entry: 6050I on Hold, Warships Return to Dock

Last entry, we devoted?significant?word-power to what we knew - and didn’t - about?6050I , aka “The $10K Crypto Reporting Rule,” initially set to kick in on January 1, 2024.

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Well, hold the phone (does anybody still say that?). The tax overlords at the IRS just threw us a curveball – and this time, it's actually a good one. In a plot twist that no one saw coming (and in the crypto world, that's saying something), the IRS is putting a pin in enforcing this onerous reporting requirement for digital asset transactions.

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Remember the chatter about the big, bad?6050I ?gearing up to rain on our crypto parade? That's the one where, if in the course of a trade or business, you receive $10k or more in crypto in a single transaction (or multiple related transactions), you're supposed to disclose who's sending and receiving, complete with all the juicy details like names, addresses, and those all-important Social Security or ITIN numbers. Oh, and you'd have to do it within 15 days or risk being the star of your very own felony charge drama.

Everyone was confused about how to report these transactions because the usual tax form (8300) only applies to $10k+ CASH transactions.

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But here comes the good news, like the?scene from "LOTR: The Two Towers" ?when Gandalf and the Riders of Rohan show up at Helm’s Deep (“AT DAWN, LOOK TO THE EAST!” ??).?The?IRS waved its magic wand ?and announced they're hitting pause on this whole reporting rigmarole until they can hash out the nitty-gritty in some upcoming regulations.

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And it sounds like they're going to give us the roadmap we've been crying out for. We're talking clear-cut regs on how 6050I and our beloved digital assets will - like the bumper sticker - coexist, complete with all the forms and instructions your heart could desire.

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So, for the moment, keyboard warriors and bean counters alike can stand down. The IRS is giving us a breather, and in the whirlwind world of crypto, that's as refreshing as a cold lemonade on a scorching summer day.

The Water Cooler ??

Things (STILL) worth talking about at the office water cooler…if you 1) talk to people, 2) still work in an office, and 3) have a water cooler.

Other Significant Findings 2.0

We haven’t included Other Significant Findings in every issue of Triple Entry up until now, but going forward you can expect more regular appearances of this section to help you stay abreast of what else is happening in crypto tax, policy, and markets that you should know about:

• Spot Ether ETF applications decisions delayed by SEC :?The SEC's playing the waiting game with those spot Ether ETF applications, hitting 'snooze' on making any big decisions. Gensler and his goons (minus Hester Peirce — she’s legit) delayed both Grayscale’s and BlackRock’s ETF applications. Big surprise. The filing raises some legitimate concerns though, like this one: "Are there particular features related to ETH and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ETH’s susceptibility to fraud and manipulation?" Something to chew on.
• IRS adds crypto question to more tax forms: ?The IRS is stepping up its game, tossing the “Got crypto?” question on a bunch more tax forms, including those for estates, trusts, partnerships, and C and S corporations. This is a big deal because it shows that crypto isn’t just about Joe and Jane Doe anymore; it's the big leagues now. Also, more folks in fancy suits might be knocking on tax pros' doors, looking for crypto tax help.
• US judge questions SEC limits during Coinbase hearing: ?Meanwhile, in the courtroom drama of the century, a U.S. judge is giving the SEC a bit of a side-eye over its crypto crackdown during a face-off with Coinbase. While the gavel hasn't dropped yet, the buzz is that Coinbase might just have the upper hand after the latest verbal sparring match. Why's this a headline-grabber? Well, it's about to draw some lines in the regulatory sandbox, potentially giving a bunch of tokens the green light and maybe, just maybe, cueing up the crypto bulls for a run.

Extraordinary Items 2.0 ??

We know you came for the industry deep dives but you stayed for the memes, so don’t worry: Triple Entry 2.0 is still keeping those fantastic Extraordinary Items on the balance sheet.? ___ “If you’re looking for an accountant to help you with your taxes this year, good luck. And if you’re looking for an accountant to help you with your crypto taxes this year, pray for deliverance.”?

What do you think of the new improved Triple Entry??Hit reply and let us know what you found most helpful this week—we’d love to hear from you!

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“Calc”-you-later, ???

Trevor