| What to Know: – Proposal allows brokers to require electronic 1099-DA delivery starting 2027. – Add enhanced notice-and-access; remove required paper and e-consent withdrawal rights. – Debate centers on costs, privacy risks, and environmental savings from paperless. |
The Treasury-IRS proposal REG-105064-25 would shift how crypto tax statements reach users by centering on electronic furnishing of the new Form 1099‑DA. It is a proposal, not a final rule, and could change after the public comment process.
Backers argue online delivery reflects how digital asset markets operate, while critics warn about compliance costs and potential over-collection of user data. The change intersects with parallel debates on who is a “broker” in crypto and what information belongs on tax statements.
According to the U.S. Department of the Treasury, the draft regulations under REG-105064-25 would let digital asset brokers furnish Form 1099‑DA electronically without being required to also offer paper delivery, add enhanced electronic notice‑and‑access standards, and remove the rule that customers must be allowed to withdraw prior e‑consent; the effective date is for statements furnished on or after January 1, 2027 (source: irs.gov/newsroom release, Mar. 5, 2026). In practice, that means a platform could require e‑delivery and still comply, though it could voluntarily provide paper.
Supporters frame the change as aligning costs and operations with a market that’s already digital. According to Coinbase’s October 2024 comment letter, eliminating paper avoids large printing and mailing outlays across potentially massive statement volumes and reduces environmental impact.
Concerns persist about reporting burdens. As reported by Cointelegraph, the Blockchain Association has argued total compliance costs could run in the hundreds of billions annually and raised Paperwork Reduction Act objections. Separately, industry groups have flagged privacy risks if the form includes granular fields. As reported by DLNews, the Chamber of Digital Commerce urged limiting sensitive elements such as transaction IDs and wallet addresses to only what’s needed for tax calculation.
Beyond exchanges, the proposal’s scope matters because “broker” definitions determine who must issue 1099‑DA statements. As reported by The Block, Consensys contends coverage could extend to kiosk operators, payment processors, and both hosted and unhosted wallet providers, entities that may lack full visibility into user identity or transaction details. The company has also asked for more time and clarity to prevent duplicate reporting when multiple parties touch the same transaction.
Supporters say clarifying these roles is essential as tax enforcement modernizes. “The proposal aims to make it easier for digital asset brokers to provide 1099‑DA statements electronically,” said the Internal Revenue Service in a March 5, 2026 public release.
At the time of this writing, Bitcoin trades near $71,196 with medium volatility around 3.86% and a neutral RSI reading near 55.7, based on data from TradingView. These market conditions do not change filing obligations but offer context for how frequently users may receive taxable transaction statements.
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