IRS Proposes Crypto Exchanges E-Forms Rule

IRS Proposes Electronic-Only Tax Form Delivery for Crypto Exchanges

• The IRS has proposed a rule allowing crypto exchanges to deliver tax forms exclusively through electronic channels, eliminating paper statements.
• Custodial crypto brokers could issue Form 1099-DA digitally, requiring users to accept this method to maintain accounts.
• Major US-regulated platforms like Coinbase and Kraken would distribute tax documents via online dashboards or email.
• The new rule is part of expanded IRS oversight of digital asset transactions, with reporting starting January 1, 2025.
• The Infrastructure Investment and Jobs Act of 2021 initiated these changes, aligning crypto transaction reporting with standards for stocks and securities.

The IRS’s proposal to allow electronic-only delivery of tax forms by crypto exchanges marks a shift in regulatory oversight. Platforms such as Coinbase and Kraken will be impacted by the new requirements beginning in 2025.