By Hannah Lang
(Reuters) – The U.S. Treasury Department on Friday finalized a rule requiring cryptocurrency brokers, including exchanges and payment processors, to report new information about users' sales and trades of digital assets to the IRS. Internal.
The new requirements are intended to crack down on cryptocurrency users who may not pay their taxes and stem from the bipartisan $1 trillion Infrastructure Investment and Jobs Act of 2021. At the time the bill was passed, it was estimated that the new rules could generate close to $28 billion over a decade.
The rule, which would be phased in starting next year for the 2026 tax filing season, would align tax requirements for cryptocurrencies with existing tax reporting requirements for dealers in other financial instruments, such as bonds and stocks, the Treasury said.
The final rule was modified from the Treasury’s original proposal to limit some burdens on brokers and implement the new requirements in stages, Treasury officials said. It also includes a $10,000 threshold for reporting transactions involving stablecoins, a type of crypto token typically pegged to an asset such as the U.S. dollar.
The cryptocurrency industry had undertaken a comment letter campaign after the Treasury proposed the rule last year, arguing that the scope of the proposal's broker definition was too broad and that the requirements violated the privacy of owners. of cryptocurrencies.
The Treasury said it reviewed more than 44,000 comments on the proposal. It also said it anticipates issuing additional rules later this year to establish tax reporting requirements for non-custodial brokers, including decentralized crypto exchanges.
In a statement, the Treasury emphasized that cryptocurrency owners “have always owed taxes on the sale or exchange of digital assets” and that the new rule “simply created reporting requirements… to help taxpayers file accurate returns and pay taxes due under current law.”
The rule introduces a new tax filing form called Form 1099-DA, intended to help taxpayers determine whether they owe taxes and would help cryptocurrency users avoid having to do complicated calculations to determine their earnings, according to the Treasury Department.
Brokers would need to submit the forms to both the IRS and digital asset holders to assist them with tax preparation.
Currently, the IRS requires cryptocurrency users to report many digital asset activities on their tax returns, regardless of whether the transactions generated a profit. Users must do that calculation themselves, and the platforms on which digital assets are traded do not provide that information to the IRS.
