Cryptocurrency exchanges and payment processors in the US will soon be mandated to report user transaction information to the Internal Revenue Service (IRS) under a new Treasury proposal.
The new regulations aim to tackle the tax evasion risks associated with digital assets and are projected to generate nearly $28 billion in revenue over the next decade, according to the Joint Committee on Taxation.
Under this proposal, crypto brokers—encompassing centralized and decentralized exchanges, payment processors, and some hosted wallets—will be required to submit a new tax reporting form, known as Form 1099-DA. This form will assist taxpayers in determining their tax liabilities related to cryptocurrencies like Bitcoin and Ether, as well as non-fungible tokens (NFTs).
The Form 1099-DA will include details about customers’ capital gains and losses and will be provided to both the customers and the IRS. This initiative aligns cryptocurrency reporting with existing information reporting rules for securities and other financial instruments.
Brokers will begin reporting transactions involving digital assets starting in 2026.