IRS Proposes Mandatory E-Delivery of 1099-DA for Crypto Users
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The U.S. Internal Revenue Service (IRS) has proposed requiring cryptocurrency brokers and exchanges to deliver Form 1099-DA to users electronically. The proposal is scheduled for publication on Friday and, if finalized, would take effect on Jan. 1 of the calendar year following the release of the final rules.
Under current regulations, exchanges must provide paper copies of Form 1099-DA upon request. The new proposal would remove that obligation and permit brokers to terminate relationships with existing customers who refuse electronic delivery. It would also prevent users from retroactively withdrawing consent for electronic forms.
The IRS proposal would shift to mandated electronic tax forms. Source: Federal Register
The IRS requires brokers, including platforms offering crypto services, to report user proceeds from each transaction and to furnish Form 1099-DA detailing transaction activity for the tax year. For the 2025 tax year, exchanges are not required to track cost basis; investors remain responsible for determining their own cost basis.
According to the IRS, brokers must include customer identifying details—such as name and taxpayer identification number (TIN)—and other relevant information, including the gross proceeds from each transaction, when making these returns.
One in five Americans—approximately 55 million people—hold digital assets in the United States, according to the National Cryptocurrency Association (NCA). In an NCA survey of 54,000 respondents, 10% cited digital asset taxation as a barrier to adoption. More than one-third of participants indicated they want additional education on digital asset tax obligations, and 39% said they want a better understanding of the tax implications of crypto.
Common barriers to entry cited by respondents. Source: NCA
Concerns resurface after Trump rescinded the controversial “DeFi broker rule”
In December 2024, the IRS issued a rule that classified front-end services—including decentralized exchanges (DEXs) and decentralized finance (DeFi) platforms—as broker-dealers subject to tax reporting. The designation would have required DeFi platforms to collect know-your-customer (KYC) information and report user sale proceeds to the IRS.
In April 2025, U.S. President Donald Trump signed a resolution overturning the DeFi broker rule, a move broadly welcomed by the crypto industry.
Industry executives have since warned that ambiguous language in the stalled CLARITY market structure bill could still impose KYC reporting obligations on DeFi platforms and constrain activity in the sector.
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