New rules come into place in 2023 that anyone in the course of business or trade who receives $10k (in virtual currency) in a transaction or series of transactions in a year from a party must file a form 8300.
Since Dfinity foundation is the developer of the code that mints the new coins one can argue that it is the foundation who is the sending party and the staker is the receiver. The nns software appears to also have been developed by the foundation.
As the foundation is based on Switzerland it normally would not have a USA tax id number but as there appear to be staff in the USA is there in fact a TIN we can use when filing form 8300 in 2023 when we go over the $10k threshold? Is the foundation open to being cooperative and enabling to USA based stakers and get a handle on this situation? Or is the advise to should we start unstaking as we will not be supported in our compliance obligations?
Has the foundation or associated entities here in the USA thought about the new obligations set out in the infrastructure bill passed at the end of 2021.
Besides the new form 8300 requirement there is also new requirements for 1099s for brokering transactions for example when icp is turned into cycles.
What if any advise can the foundation provide to alleviate the issues this creates?
And how do you manage this new requirement with proposal 48623 where the goal is to screw IRS by mixing the reward value with a unknow 5% modulation system?
I really hope they hold on that proposal 48623 until a clear picture of the situation. That was voted completely blind. Advice from a professionnal tax firm advisor maybe?
It is a matter of time to get many NNS investors in trouble if this proposal is implemented.
Since the genesis, all reward receivers need to calculate the value of all rewards, daily, and report, regardless the form (minting or maturity). Sorry, it is not fun to hear and not fun for me to write. This is not FUD , this is a reality the community will have to face, sooner or later.
Right now, this is something the community prefer ignoring and hoping for the best.
Starting January 1, 2024, a crypto transaction may trigger a Form 8300 filing when any “person” (including an individual, company, corporation, partnership, association, trust or estate) receives digital assets in the course of a trade or business with a value exceeding $10,000. Valuation is done on the day of receipt, and as with all things crypto, valuation matters a lot. Again, structuring transactions into smaller receipts to avoid reporting is a felony. And since receipts must be aggregated if they are related in a series of connected transactions, virtually any receipt of digital assets is potentially reportable, regardless of dollar value.
Plainly, the IRS being interested in crypto is nothing new. Everyone is already required to report crypto gains to the IRS. There’s even a “do you crypto” question on every IRS Form 1040, the individual income tax return. It’s often compared to the “do you have a foreign bank account” question that appears on Schedule B to tax returns, a question that has led to many criminal convictions for the IRS, and big civil penalties. The new requirements are sweeping. And although there is a grace period until 12/31/23, there will be many changes needed to adapt. The new law mandates that a recipient of more than $10,000 in crypto who is in business must collect, verify, and report a sender’s personally identifiable information within 15 days. If you don’t, you can face fines and even criminal liability.
Proposal 48623 is very strange. It is completely incomprehensible why change something that works well. Especially since less than 25% of the voting power voted for it.