Regulation
US Treasury Department, IRS Complete New Crypto Tax Reporting Rules – DL News
- Digital asset custodians will be required to report crypto transactions to the IRS.
- The new rules will be implemented in 2026 and will report on the previous year.
- Decentralized or non-custodial brokers will be covered by different regulations.
The US Treasury has completed new rules requiring custodial cryptocurrency brokers, including exchanges and payment processors, to report sales and trades of digital assets to the Internal Revenue Service in a move aimed at curbing tax evasion on cryptocurrencies.
The final rules reflect consideration of more than 44,000 public comments received on the proposed rule, the IRS said in a statement. Press release.
According to the IRS, the reporting requirements should allow taxpayers to file accurate reports on digital asset transactions, which are already subject to tax under current law.
“These regulations are an important part of the broader high-income individual tax compliance effort,” said IRS Commissioner Danny Werfel. “We must ensure that digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets.”
Crypto transactions will be reported in two years on the soon-to-be-released Form 1099-DA, reflecting calendar year 2025.
The Digital Chamber of Commerce earlier this month mentioned a need to simplify the form and also highlighted individual privacy concerns.
The final regulations implement the reporting requirements under the Infrastructure Investment and Jobs Act, which took effect in 2021.
The rules do not include reporting requirements for decentralized or non-custodial brokers that do not take custody of digital assets; they will be governed by separate regulations, the IRS said.
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In addition to broker reporting rules, the regulations provide taxpayers with rules for determining basis, gains and losses from digital asset transactions.