IRS proposes mandatory digital delivery of Form 1099-DA for crypto users. Exchanges may require electronic tax forms under new rule.
The United States Internal Revenue Service proposed a major change for crypto tax reporting. The agency proposed mandatory digital delivery for form 1099-DA through crypto exchanges. If approved, millions of users could only receive tax forms via apps/email. However, the rule is still being opened for public consultation until May 5, 2026.
IRS Proposal Could Move Crypto Tax Forms Fully Online
The proposal allows crypto exchanges to ask customers to accept electronic tax forms. Presently, brokers are asked to provide paper copies to users. However, the new rule could mean that platforms no longer carry out paper delivery at all. Instead, users would be sent documents via email notification or online account centers.
The U.S. Internal Revenue Service (IRS) has proposed allowing crypto exchanges to require users to accept electronic delivery of Form 1099-DA, the tax form used to report digital asset transactions. Under the proposal, exchanges could integrate consent into account onboarding and…
— Wu Blockchain (@WuBlockchain) March 8, 2026
Form 1099-DA reports transactions in the form of digital assets to the Internal Revenue Service. The form will record gross proceeds from crypto trades from 2025 onwards. These forms will be the first to reach taxpayers during a tax year, 2026. Therefore, exchanges have to prepare systems in advance of the start of the next reporting period.
Related Reading: Ripple, Coinbase Back 14-Point Crypto Tax Plan
According to the proposal, exchanges are allowed to add digital consent during account onboarding. Users could receive a pop-up that asked them to agree to electronic delivery. If there is a refusal of consent, exchanges can terminate their accounts.
The Internal Revenue Service made it clear that the proposal does not lower tax obligations. Brokers are still required to report the same transaction information to the government. However, the method of delivery may change completely. Instead of mailboxes, most users will probably receive forms from secure app document centers.
The rule makes consent requirements simpler. Previously, customers had to demonstrate that they had access to digital files. Now, crypto users are assumed by regulators to already possess such a capability.
Crypto Exchanges May Require App-Based Tax Reporting Access
Under the proposal, electronic consent may be hard to revoke. Once users agree to digital delivery, brokers may not be able to allow withdrawal while keeping accounts. Therefore, switching back to paper forms may not be possible for the vast majority of customers.
The rule also comprises certain record retention requirements. Exchanges must continue to make electronic forms available until October 15 of the following year. In addition, brokers must keep records of prior statements for 7 years.
Another compliance rule is for failed email delivery. If the email is not able to reach a customer, the broker will have to send a physical notice. This notice must come within the time period of 30 days. However, the notice will not include the entire tax form itself.
The timeline indicates implementation can start in the 2027 tax season. That timeline is subject to final approval upon the completion of the comment period. The consultation stage is still open until May 5, 2026. After that date, regulators are allowed to finalize the rule.
The proposal also relates to upcoming changes in the reporting of digital assets. Cost-basis reporting for certain crypto assets starts in 2026. These records will be recorded in file forms filed for 2027.
Overall, the proposal marks the move towards platform-based crypto tax communication. Exchanges may control documents directly through applications and email systems. As a result, crypto users need to be very careful when monitoring digital accounts during tax season. The change could make actual reporting much easier, but also open up regulatory oversight of digital assets.
