IRS proposes digital-only crypto tax forms

The IRS may require crypto brokers to issue tax forms only electronically, ending paper options. Platforms like Coinbase could close accounts for users refusing digital delivery. The rule targets the 2025 tax year.

The U.S. Internal Revenue Service (IRS) has proposed a rule requiring cryptocurrency brokers, including major platforms like Coinbase and Kraken, to deliver tax forms exclusively through electronic means. This would eliminate the option for paper copies. The proposal focuses on Form 1099-DA, a new document designed to report digital asset transaction proceeds and cost basis directly to the IRS. If enacted, exchanges could require electronic delivery as a condition for maintaining an account and may terminate relationships with customers who refuse digital documentation. Aimed at modernizing tax reporting and improving data accuracy, the rule would streamline compliance by allowing the IRS to automatically receive detailed information on crypto gains and losses. The proposal is open for public comment and would take effect for the 2025 tax year, reflecting the agency’s push to align tax infrastructure with the digital nature of crypto.