Regulation
US Treasury Department, IRS Finalize Cryptocurrency Broker Tax Reporting Rules
The U.S. Department of the Treasury and the IRS have released final regulations defining new reporting requirements for digital asset brokers on June 28.
Cryptocurrency brokers, including exchanges, will be required to report gross proceeds from cryptocurrency sales starting in 2026. This will include cryptocurrency sales during 2025.
Additionally, brokers will be required to report tax base information for certain cryptocurrencies starting in 2027 for sales that occurred in 2026.
The new regulations set rules for cryptocurrency brokers that are in line with those for traditional financial brokers, but have no impact on how much taxpayers owe. The Treasury said:
“Digital asset owners have always had to pay a tax on the sale or exchange of digital assets.”
Treasury said the rules were part of the Biden-Harris administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), which did not impose new taxes on cryptocurrencies but “simply created reporting requirements.”
The latest provisions mainly concern custodian intermediaries. Treasury expects to issue regulations for non-custodial intermediaries in accordance with statutory requirements later this year.
Benefits for investors and the IRS
Aviva Aron-Dine, acting deputy secretary for tax policy, said cryptocurrency investors will have “better access to the documentation they need to easily file and review tax returns.”
Previously, investors had to use expensive third-party services to calculate gains and losses from cryptocurrency sales. Instead, the new requirements will provide investors with all the necessary information in line with the bipartisan directive from Congress.
In the meantime, the IRS will have access to the information it needs to address tax evasion risks associated with cryptocurrencies, including tax evasion by wealthy investors.
Previous resistance of the industry
The Treasury and the IRS said they conducted public hearings and considered more than 44,000 comments before finalizing the rules.
News separately cited Treasury officials who said the final requirements had been changed from their previous form. The final requirements reduce burdens on brokers, phase in requirements, and establish a $10,000 threshold for reporting stablecoin transactions.
Reuters noted that the industry has “launched a comment letter campaign” in 2023 focused on privacy concerns and the broad definition of a broker in the requirements.
One company that expressed opposition was Monetary basewho lodged a complaint October 2023 that the regulations would impose “unprecedented, uncontrolled and unlimited tracking” on users’ daily lives and create burdensome new reporting obligations.