IRS proposal eases provision of 1099-DA statements by digital asset brokers

The IRS issued proposed regulations (REG-105064-25) on Thursday that would shift digital-asset reporting to electronic-only delivery by loosening requirements that apply to digital asset brokers for obtaining consent from customers for electronic delivery of 1099-DA statements.

Under the proposed regulations, brokers would not have to offer a paper alternative when obtaining customer consent to receive 1099-DA, Digital Asset Proceeds From Broker Transactions, statements electronically. The proposed regulations also would not require brokers to give their customers the ability to withdraw a previously provided consent.

Digital asset brokers could end their relationship with any customer who insists on paper statements, the preamble to the proposed regulations says.

The current rules require digital asset brokers to provide Forms 1099-DA on paper to any customer who does not affirmatively consent to receiving them electronically. Beginning with statements required to be furnished on or after Jan. 1, 2027, brokers are permitted to follow these new proposed rules when furnishing 1099-DA statements for transactions, the IRS said.

Under the proposed regulations, brokers would be required to obtain the customer’s consent to receive the 1099-DA statement in an electronic format. Brokers obtaining that consent would be required to furnish 1099-DA statements by posting them to a specified location that is electronically accessible, such as the broker’s website, mobile device application, or other online platform, or by attaching them to an email.

Brokers that furnish 1099-DA statements to an online location also would have to email customers that the statements are available and, if requested by the customer, send another notice using a communication method other than email.

Brokers also would have to provide continuing access to the 1099-DA documents.

Because some customers engage in a large number of digital asset transactions each year, the cost of mailing and printing 1099-DA statements could be “unnecessarily burdensome,” the IRS said in a news release. The proposed regulations are feasible because digital asset customers almost exclusively buy and sell electronically, the IRS said.

Digital assets include certain convertible virtual currencies and cryptocurrency, as well as stablecoins and nonfungible tokens.

The IRS on Thursday also issued Notice 2026-4, requesting comments from the public on the issues involved with electronic furnishing of 1099-B, Proceeds From Broker and Barter Exchange Transactions,statements and other payee statements.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.