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The US Treasury and IRS released final regulations defining the new reporting requirements for digital asset brokers on June 28.
Crypto brokers, including exchanges, will need to report gross proceeds for crypto sales starting from 2026. This will include crypto sales during 2025.
Furthermore, brokers will need to report information about the tax basis of some cryptos starting in 2027 for sales that occurred in 2026.
The new regulations establish rules for crypto brokers in line with those for traditional financial brokers but do not impact what taxpayers owe. The Treasury said:
“Owners of digital assets have always owed tax on the sale or exchange of digital assets.”
The Treasury said the rules are part of the Biden-Harris Administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), which did not impose new taxes on crypto but “simply created reporting requirements.”
The latest requirements primarily concern custodial brokers. The Treasury expects to issue rules for non-custodial brokers in accordance with statutory requirements before the end of the year.
Benefits to investors and IRS
Acting Assistant Secretary for Tax Policy Aviva Aron-Dine said crypto investors will have “better access to the documentation they need to easily file and review tax returns.”
Previously, investors had to use costly third-party services to calculate gains and losses from crypto sales. By contrast, the new requirements will provide investors with all necessary information in line with the bipartisan directive from Congress.
Meanwhile, the IRS will gain access to information it needs to address tax evasion risks related to crypto, including tax evasion by wealthy investors.
Earlier industry resistance
The Treasury and IRS said they conducted public hearings and considered more than 44,000 comments before finalizing the rules.
Reuters separately cited Treasury officials who said the final requirements have been modified from their earlier form. The final requirements reduce burdens on brokers, phase in requirements in stages, and set a $10,000 threshold for stablecoin transaction reporting.
Reuters noted that the sector had “waged a comment letter campaign” in 2023 focused on privacy concerns and the broadness of the requirements’ broker definition.
One company that expressed opposition was Coinbase, which complained in October 2023 that the regulations would impose “unprecedented, unchecked, and unlimited tracking” on users’ daily lives and create new and burdensome reporting requirements.