IRS proposes mandatory electronic crypto tax forms

The U.S. Internal Revenue Service has proposed new rules that would require cryptocurrency exchanges to deliver tax form 1099-DA electronically rather than providing paper copies to users.

Under the proposal, brokers and exchanges could terminate relationships with users who refuse electronic delivery of tax forms, and customers would no longer be able to retroactively revoke their consent for digital tax reporting.

The IRS said brokers must report identifying information such as the customer’s name, tax identification number, and gross proceeds from each crypto transaction.

The proposal is scheduled to be published Friday and would take effect on Jan. 1 of the calendar year following the release of the final rule if adopted.

Currently, exchanges must provide paper copies of form 1099-DA upon request, which documents cryptocurrency transactions conducted through centralised exchanges or brokers.

The reporting requirement forms part of broader IRS oversight of digital assets as the agency expands tax compliance measures across the crypto sector.