According to this article, they snuck in a provision called Internal Revenue Code Section 6050i into the Infrastructure bill that is on Biden’s desk.
Under the new rules, the transfer of digital assets above $10,000 in value will be treated like cash. And failure to report the identity of the person or business sending payment for the digital assets would be considered a felony offense. The penalty for noncompliance is up to five years in prison.
So if you buy an NFT of Dwayne Wade dunking, and you pay $15,000 for it, the IRS expects you to report:
- their name
- social security number
of the person who sold it to you. Is that stupid or what!?!
Clearly the powers at be are using this as a way to deter the move to a more decentralized economy. Let’s see how the blockchain community comes together with their investment in lobbyists to fight this in the years to come.