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By Hannah Lang
(Reuters) – The U.S. Treasury Department finalized a rule on Friday that would require cryptocurrency brokers, including exchanges and payment processors, to report new information about user sales and exchanges of digital assets to the Internal Revenue Service.
The new requirements are aimed at cracking down on crypto users who may fail to pay their taxes, and stem from the $1 trillion Infrastructure Investment and Jobs Act of 2021. At the time of the bill’s passage, the new rules were estimated to generate nearly $28 billion over a decade.
The Treasury Department said the rule, which will be phased in starting next year for the 2026 tax filing season, will align cryptocurrency tax requirements with existing tax reporting requirements for intermediaries for other financial instruments, such as bonds and stocks.
The final rule was modified from the Treasury Department’s original proposal in order to reduce some of the burdens on brokers and implement the new requirements in phases, Treasury officials said. It also includes a $10,000 minimum for reporting transactions involving stablecoins, a type of cryptocurrency typically tied to assets like the US dollar.
The crypto industry launched a campaign of comment letters after the Treasury Department proposed the rule last year, arguing that the scope of the proposal’s definition of an intermediary was too broad and that the requirements violated the privacy of cryptocurrency holders.
The Treasury Department said it reviewed more than 44,000 comments on the proposal. It also said it expects to issue additional rules later this year to set tax reporting requirements for non-custodial intermediaries, including decentralized cryptocurrency exchanges.
In a statement, the Treasury Department stressed that cryptocurrency owners “have always been subject to 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, which is intended to help taxpayers determine whether they owe taxes, and will help crypto users avoid having to do complex calculations to determine their gains, according to the Treasury Department.
Brokers will have to submit forms to both the IRS and digital asset holders to help prepare their taxes.
The IRS currently requires cryptocurrency users to report many digital asset activities on their tax returns, regardless of whether the transactions resulted in a profit. Users are required to do these calculations themselves, and the platforms on which digital assets are traded do not provide this information to the IRS.
