US Treasury Finalizes New Crypto Tax Reporting Rules, According to Reuters

By Hannah Lang

The U.S. Treasury Department has announced the finalization of a rule requiring cryptocurrency brokers, including exchanges and payment processors, to report new information regarding users’ sales and exchanges of digital assets to the Internal Revenue Service (IRS).

This initiative aims to address potential tax evasion among cryptocurrency users and is a result of the bipartisan 2021 Infrastructure Investment and Jobs Act, which was estimated to generate nearly $28 billion in tax revenue over ten years.

The new reporting requirements will be implemented starting next year for the 2026 tax filing season. The Treasury stated that this aligns cryptocurrency tax obligations with existing reporting requirements for other financial instruments like bonds and stocks.

The final rule underwent modifications from the initial proposal to alleviate some burdens on brokers and introduce the requirements gradually. A reporting threshold of $10,000 has been set for transactions involving stablecoins, which are digital tokens typically linked to assets such as the U.S. dollar.

In response to the Treasury’s proposal last year, the cryptocurrency industry launched a campaign expressing concerns that the definition of a broker was overly broad and that the proposed requirements could infringe on user privacy. The Treasury reviewed over 44,000 comments on the proposal and plans to introduce further rules later this year to establish tax reporting requirements for non-custodial brokers, including decentralized exchanges.

In an official statement, the Treasury emphasized that crypto investors have always been obligated to pay taxes on their digital asset transactions. The new rule is intended to streamline reporting obligations to help taxpayers file accurate returns and meet their tax obligations.

To assist taxpayers, the rule introduces a new tax reporting form designated as Form 1099-DA, which will help cryptocurrency users determine any taxes owed without the need for complex calculations. Brokers will be required to send these forms to both the IRS and digital asset holders to facilitate tax preparation.

Currently, the IRS mandates that cryptocurrency users report a variety of digital asset activities on tax returns regardless of whether these transactions yielded a profit. Users are responsible for calculating their tax obligations, as the trading platforms do not provide this information to the IRS.