Under a proposed U.S. Treasury Department rule announced on Friday, cryptocurrency brokers, including exchanges and payment processors, would be required to report new information on users’ sales and swaps of digital assets to the Internal Revenue Service (IRS).
The new rules proposed are part of an ongoing effort by Congress and regulatory authorities to crack down on crypto users who may be evading taxes.
The new tax reporting form called Form 1099-DA is meant to help taxpayers determine if they owe taxes. It intends to help crypto users avoid having to make complicated calculations to understand their gains.
According to the Treasury, it would also subject brokers of digital assets to the same information reporting rules as brokers of traditional financial instruments like bonds and stocks.
The proposal defines “broker” as both centralized and decentralized digital asset trading platforms, crypto payment processors, and certain online wallets where users store digital assets.
Brokers are required to send the forms to both the IRS and digital asset holders to assist with their tax preparation.
Brokers, in certain circumstances, would also be required to disclose gain or loss and basic information for sales that take place on or after Jan. 1, 2026, on these information returns and statements, so that customers have the information they need to prepare their tax returns.
The Treasury Department and the IRS are accepting feedback on the proposal until Oct. 30. They will also hold public hearings on the proposal on Nov. 7-8.
Also Read: Coin Center Advises Senators on Crypto Taxation Framework
