On July 20, 2023, Jerry Brito, Executive Director of Coin Center, announced that "Coin Center's case challenging Congress’s expansion of Section 6050I of the tax code was dismissed as unripe by the district court", which means that at the beginning of 2024, "citizens who are recipients of crypto payments of $10,000 or more [will be required] to report to the government not just the transaction, but the PII of the sender as well – all without a warrant." This amendment was part of the Infrastructure Investment and Jobs Act that was passed in 2021. Coin Center plans to appeal to the Sixth Circuit as soon as possible.
In June 2022, Coin Center wrote a blog post outlining the consequences of this legislation and what is at stake:
...there is one provision in the infrastructure bill that is unconstitutional on its face and that simply can’t be fixed through regulation. It is the so-called 6050I amendment, and it will require individuals and businesses who receive $10,000 or more in crypto to report to the government not just the name of who sent them the funds, but that person’s date of birth and Social Security number as well.
Are you an artist who sells a painting or an NFT for $15K? You have to file a form informing the government on your client’s personal information. Are you a nonprofit who receives anonymous donations for your humanitarian work? No longer. You may have to give the government a list of your donors. This is an affront to our civil liberties that must be challenged the only way they can at this point: in court.
Our suit leads with two major claims: (1) forcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment; and (2) demanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment.
"The first claim is about privacy and our Fourth Amendment right to be secure from unreasonable searches and seizures." Under the “third-party doctrine”, if you give a third party (banks, social media, etc.) access to your private information, you lose your right to prevent warrantless searches of that information. The key point is that this 6050I provision expands the scope beyond third parties - peer-to-peer transactions that involve no third parties would still fall under these new requirements, which means individuals on both sides of the trade would be required to report transaction/KYC information about each other to the government.
"The second claim is about our freedom of association." The 6050I provision would require political advocacy groups to report their supporter information, which would enable various government agencies to more easily monitor such political activity. This is unconstitutional because such requirements would "chill" political association (as individuals would be more hesitant to contribute funding to politically controversial groups).