Wednesday, June 29, 2022
Congress Takes Its War On Cash To Digital Assets: Understanding Tax Code Section 6050I
Abraham Sutherland (Virginia; Google Scholar), Congress Takes Its War on Cash to Digital Assets: Understanding Tax Code Section 6050I:
The United States government really does not like Americans to make large cash transactions. Now, due to a new law, it really, really does not want Americans to use “digital assets,” either. My goal is to convince you that the first claim is true. The second claim will then be self-evident.
Of course, no one cares about cash anymore, except criminals. We’ve always known something better: bank accounts, paper checks, and wire transfers. Cash has been obsolete for meaningful commerce for a long time, and since 1984 we’ve had a law in place to make sure it stays that way. Cash, as a tool for large, non-criminal transactions in the modern economy, is dead. Cash is a relic.
This essay is about section 6050I of the tax code, the 1984 federal law that helped make cash obsolete. It’s important because the same law is now being aimed at digital assets, through an amendment to section 6050I that was signed into law on November 15. The new law subjects digital assets to the same reporting requirements as physical currency. The amendment, a mere eight words long, appeared on page 2,422 of the trillion-dollar Infrastructure Investment and Jobs Act.