Crypto: Irs Proposes Mandating Electronic Delivery Of Tax Forms For Crypto

If adopted, the proposal will take effect on Jan. 1 of the calendar year following the publication of the final IRS rules.

The US Internal Revenue Service (IRS) is seeking to require electronic delivery of tax forms to crypto exchange users.

Under the current rules, exchanges are required to provide paper copies of tax form 1099-DA, the IRS tax form used to document crypto transactions from a centralized exchange or broker, if users request paper forms.

The proposed new rules, slated to be published on Friday, remove this requirement and allow brokers to “terminate” their relationships with existing clients if they refuse electronic delivery of tax forms.

Additionally, the IRS proposal would also prohibit users from retroactively revoking consent for electronic forms.

The IRS requires all broker-dealers, platforms providing crypto services to users like exchanges, to report user proceeds from each transaction and to provide users with Form 1099-DA, detailing their transaction history for the tax season.

However, the exchanges are not required to track cost basis for the 2025 tax year; tracking cost basis, or the price paid for each investment purchase, is the investor’s responsibility. The IRS outlined the reporting requirements for brokers:

One in five Americans, or about 55 million individuals, hold digital assets in the US, according to the National Cryptocurrency Association (NCA), a crypto advocacy group.

Tax compliance was one of the biggest impediments to adopting crypto, with 10% of the 54,000 respondents in the NCA survey citing digital asset taxes as an issue.

More than one-third of the respondents indicated that they wanted more education on the tax implications of digital assets, according to the NCA.

Source: CoinTelegraph