US Treasury

U.S. Treasury and IRS Enforce Tax Reporting Rules on Crypto Brokers

U.S. Treasury and IRS tighten the reins on crypto brokers, introducing stringent tax reporting rules to combat evasion and ensure transparency.
By
Jordan Tuwiner

Jordan discovered Bitcoin in 2013 and has been helping others learn about Bitcoin since through this site, which reaches 20,000+ readers daily.

Learn more about our editorial guidelines

      August 29, 2023

U.S. Treasury and IRS Enforce Tax Reporting Rules on Crypto Brokers

In a bid to tighten the grip on tax evasion and streamline digital asset transactions, the U.S. Department of the Treasury, in conjunction with the Internal Revenue Service (IRS), has announced new tax reporting regulations for crypto brokers.

Key Takeaways

  • The U.S. Department of the Treasury and the IRS have announced new tax reporting regulations for crypto brokers to combat tax evasion.
  • Brokers, including digital asset platforms and payment processors, are required to file returns and present payee statements on certain digital transactions, using the new Form 1099-DA.
  • Brokers' reporting is set to begin for the year 2025 in 2026, and it's projected that these measures will generate around $28 billion in revenue over the next decade.

Under the Infrastructure Investment and Jobs Act (IIJA) spearheaded by the Biden-Harris Administration, the recent regulations are a concerted effort “to close the tax gap, address the tax evasion risks posed by digital assets, and ensure everyone plays by the same rules.”

These newly enforced guidelines compel brokers, encompassing digital asset platforms and payment processors, to file returns and present payee statements on specified digital asset dealings. To augment this process and provide clarity, the authorities will introduce a new Form 1099-DA detailing tax obligations for digital asset transactions.

Looking ahead, brokers will be expected to start their reporting for the year 2025 in 2026. Government projections estimate the revenue generation from these stipulations to be around $28 billion over the upcoming decade. For those wishing to voice opinions or concerns, feedback channels will remain open until October 30, 2023. Furthermore, a public hearing is scheduled for November 7, 2023, offering an opportunity for in-depth discussions and queries related to the new guidelines.

Article Sources

BuyBitcoinWorldWide writers are subject-matter experts and base their articles on firsthand information, like interviews with experts, white papers or original studies and experience. We also use trusted research and studies from other well-known sources. You can learn more about our editorial guidelines.

  1. IRS.gov - Treasury and IRS issue proposed regulations on reporting by brokers for sales or exchanges of digital assets; new steps designed to end confusion, help taxpayers, aid high-income compliance work, https://www.irs.gov/newsroom/treasury-and-irs-issue-proposed-regulations-on-reporting-by-brokers-for-sales-or-exchanges-of-digital-assets-new-steps-designed-to-end-confusion-help-taxpayers-aid-high-income-compliance-work
  2. Treasury.gov - U.S. Department of the Treasury, IRS Release Proposed Regulations on Sales and Exchanges of Digital Assets by Brokers, https://home.treasury.gov/news/press-releases/jy1705
  3. CNBC - Treasury proposes crypto reporting rule to ‘close the tax gap.’ What it means for investors, https://www.cnbc.com/2023/08/29/treasury-proposes-crypto-tax-reporting-rule-what-it-means-for-investors.html

About the Author

jordan tuwiner

Jordan Tuwiner is the founder of BuyBitcoinWorldwide.com. He studied computer science at Towson University and holds an online degree in trading & cryptocurrency. Jordan has been writing about Bitcoin since 2015. His work has been featured in The Guardian, International Business Times, Forbes, VentureBeat, CoinDesk and many other top Bitcoin media outlets.


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