IRS Officially Implements New Digital Asset Reporting Standards to Curb Tax Evasion

Odaily News The U.S. Internal Revenue Service (IRS) officially entered a new enforcement phase on April 15th. The mandatory cost basis reporting requirements for digital asset brokers have taken full effect for the 2026 tax year. Centralized exchanges, custodial wallet providers, and certain digital asset processors are required to issue Form 1099-DA to both the IRS and taxpayers, documenting every sale and transaction of digital assets. The IRS stated that this move aims to eliminate a long-standing "compliance gap" and align cryptocurrency reporting standards with those for traditional stocks and bonds.

The new rules require brokers to track the "cost basis" of each asset from acquisition to disposal. Taxpayers must be able to verify the specific purchase price and date for every token sold. The Treasury Department has introduced a simplified electronic consent process, allowing brokers to terminate relationships with clients who refuse to participate in the new reporting framework. Although the Trump administration has ordered the repeal of the "DeFi broker" rule that would treat front-end service providers like Uniswap as reporting entities, the IRS indicated it will trace on-chain activities through advanced forensic audits. Investors using self-custody wallets to "evade" reporting requirements face a heightened risk of audit. (FinanceFeeds)