- Mon-Fri 10 am-5pm
- +1 954-737-3383
- info@nationaltaxpreparersofamerica.com
The Treasury Department and Internal Revenue Service have unveiled proposed regulations that would modernize how cryptocurrency and digital asset brokers deliver tax documents to customers—potentially eliminating the need for paper statements entirely.
Key Changes for Digital Asset Brokers
The proposed rules introduce an alternative consent process specifically designed for the digital asset industry. Under the new framework, brokers could obtain customer consent to receive Form 1099-DA statements electronically without being required to offer a paper alternative. Additionally, customers would not have the ability to withdraw their consent once given—a departure from standard electronic disclosure rules.
Â
This approach recognizes a fundamental reality of the cryptocurrency ecosystem: digital asset transactions occur almost exclusively online, making paper statements an anachronism rather than a convenience.
Enhanced Safeguards Required
While the regulations reduce administrative burdens, they don’t eliminate accountability. Brokers must satisfy stricter electronic notice and delivery standards, including:
- Proactive notifications alerting customers when tax documents become available electronically
- Guaranteed access ensuring customers can retrieve their 1099-DA statements when needed
- Clear communication about the importance of these documents for tax filing purposes
Timeline and Scope
Brokers may begin utilizing these streamlined procedures for statements required on or after January 1, 2027. The regulations cover all digital assets as defined by the IRS, including convertible virtual currencies, cryptocurrency, stablecoins, and non-fungible tokens (NFTs).
Rationale Behind the Change
The Treasury Department cited the disproportionate cost of paper processing for an industry built on digital infrastructure. With many customers conducting hundreds or thousands of transactions annually, printing and mailing individual statements creates unnecessary expense and environmental waste for an audience that operates entirely in the digital realm.
Broader Review Underway
In conjunction with the proposed regulations, the IRS issued Notice 2026-4 seeking public input on expanding similar electronic delivery options for Form 1099-B (traditional broker transactions) and other payee statements. This suggests the digital asset regulations may serve as a pilot for broader tax document modernization efforts.
Â
The proposed regulations are open for public comment, with stakeholders encouraged to review Notice 2026-4 for submission guidelines.
Form 1099-DA, introduced as part of the Infrastructure Investment and Jobs Act, requires digital asset brokers to report proceeds from customer transactions to both the IRS and taxpayers, bringing cryptocurrency reporting in line with traditional securities reporting.
