IRS Proposes Electronic-Only Delivery of Crypto Tax Forms

The US Internal Revenue Service (IRS) has proposed a rule change that would allow cryptocurrency exchanges, such as Coinbase and Kraken, to deliver tax forms electronically only, without offering paper copies. This proposal is part of the agency's efforts to modernize financial reporting systems as digital asset markets grow.

The IRS has released a regulatory filing outlining the proposed rule change, which would permit exchanges to require customers to receive Form 1099-DA statements electronically. This means that instead of providing both electronic and paper copies of tax forms, brokers could rely solely on electronic delivery, reducing administrative costs and simplifying distribution.

The proposal is part of a broader effort by regulators to modernize financial reporting systems as digital asset markets grow. With most crypto investors already accessing trading records through online dashboards and exchange portals, electronic delivery has become the primary method for distributing financial statements across many digital platforms.