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 TakeawaysUnder 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.
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