IRS Proposes Allowing Crypto Exchanges Like Coinbase to Require Customers to Receive Tax Forms Electronically

Odaily News The U.S. Internal Revenue Service (IRS) proposed new rules on Thursday, aiming to allow cryptocurrency exchanges such as Coinbase and Kraken to require customers to receive tax forms electronically, such as the 1099‑DA form which reports total proceeds from digital asset transactions. Previously, exchanges were required to offer a paper form option. Under the new tax reporting system implemented this year, crypto exchanges must report total proceeds and cost basis for transactions. The IRS will automatically obtain detailed profit and loss data, thereby strengthening compliance oversight of crypto asset holders. The new rules also permit exchanges to terminate business relationships with customers who refuse to receive tax documents electronically. The proposal has not yet been finalized and is currently open for public comment.

It is reported that crypto tax software platforms like CoinLedger have noted a significant increase in the number of U.S. users receiving warning letters from the IRS, reminding them that crypto transactions may be taxable and must be reported as required. (The Block)