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US Treasury Finalizes New Crypto Tax Reporting Rules
By Hannah Lang
(Reuters) – The U.S. Treasury Department finalized a rule on Friday requiring cryptocurrency exchanges, including exchanges and payment processors, to report new information about users’ sales and exchanges of digital assets to the Internal Revenue Service.
The new requirements aim to crack down on cryptocurrency users who may be failing to pay their taxes and stem from the bipartisan $1 trillion Infrastructure Investment and Jobs Act of 2021. At the time the bill was passed, it was estimated that the new rules could raise close to $28 billion over a decade.
The rule, which would be phased in starting next year for the 2026 tax filing season, aligns tax requirements for cryptocurrencies with existing tax reporting requirements for brokers of other financial instruments such as bonds and stocks, the Treasury said.
The final rule was modified from the Treasury’s original proposal to limit some burdens on brokers and phase in the new requirements, Treasury officials said. It also includes a $10,000 threshold for reporting transactions involving stablecoins, a type of crypto token typically pegged to an asset such as the U.S. dollar.
The cryptocurrency industry waged a campaign of comment letters after the Treasury proposed the rule last year, arguing that the scope of the proposal’s brokerage definition was too broad and that the requirements violated the privacy of cryptocurrency owners.
Treasury said it reviewed more than 44,000 comments on the proposal. It also said it anticipates issuing additional rules later this year to establish tax reporting requirements for noncustodial brokers, including decentralized cryptocurrency exchanges.
In a statement, the Treasury emphasized that cryptocurrency owners “always owe taxes on the sale or exchange of digital assets” and that the new rule “simply created reporting requirements… to help taxpayers file accurate returns and pay taxes due under current law. “
The rule introduces a new tax reporting form called Form 1099-DA, intended to help taxpayers determine whether they owe taxes and would help cryptocurrency users avoid having to do complicated calculations to determine their earnings, according to the Treasury Department.
Brokers would need to submit the forms to the IRS and digital asset holders to assist with tax preparation.
The IRS currently requires cryptocurrency users to report many digital asset activities on their tax returns, regardless of whether the transactions resulted in a gain. Users are required to make this calculation themselves, and the platforms on which digital assets are traded do not provide this information to the IRS.
(Reporting by Hannah Lang in New York; Editing by Andrea Ricci)