The Internal Revenue Service has proposed a rule that would allow crypto exchanges to deliver tax forms exclusively through electronic channels, removing the long-standing requirement to provide paper statements to customers.
Under the proposal, custodial crypto brokers could issue Form 1099-DA digitally and require users to accept electronic delivery as a condition for maintaining an account. Exchanges would also be allowed to end relationships with customers who decline digital tax reporting.
The rule would apply to major US-regulated platforms, including Coinbase and Kraken, which would be able to distribute tax documents through online dashboards or email rather than traditional mail.
The change comes as the IRS expands oversight of digital asset transactions through new reporting requirements. Beginning with transactions on or after January 1, 2025, crypto brokers must report the gross proceeds from customer digital asset trades on new Form 1099-DA, which was created specifically for digital asset activity.
Additional reporting requirements will expand further this year when brokers begin submitting cost basis data, allowing the IRS to automatically track gains and losses from crypto trading.
The reporting framework stems from the Infrastructure Investment and Jobs Act passed in 2021, which brought crypto transactions under broker reporting standards similar to those used for stocks and other securities.
The IRS previously received tens of thousands of public comments during earlier consultations on the digital asset reporting rules, reflecting growing engagement from the industry and taxpayers as the agency develops its oversight of the crypto market.