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The IRS just proposed a new rule. Crypto exchanges must deliver Form 1099-DA electronically. Paper forms? Gone.
Here&#x27;s the kicker. Brokers can terminate your account if you refuse electronic delivery. That&#x27;s according to IRS Notice 2023-61. It&#x27;s a major shift in crypto tax reporting.
The agency says it&#x27;s about standardization. The digital asset sector is growing fast. &quot;The proposed rules would further ensure that taxpayers receive the information they need to accurately report their tax liability,&quot; according to <a href="https://public-inspection.federalregister.gov/2026-04431.pdf" target="_blank" rel="noopener">IRS Notice 2023-61</a>.
Brokers must report customer identity info. They must report gross proceeds from crypto transactions. Cost basis reporting won&#x27;t be required for 2025.
The IRS wants to streamline tax compliance. Crypto adoption is expanding. Survey data shows roughly 55 million Americans hold cryptocurrency. About 10% cite tax compliance as a barrier.
The proposal raises real concerns. Some users have limited digital access. Others prefer paper documentation. They&#x27;ll face a choice: accept electronic forms or lose exchange access entirely.
That&#x27;s a disadvantage for certain demographics. Especially those less comfortable with digital-only communication.
This isn&#x27;t the IRS&#x27;s first move. The agency has tried to bring crypto platforms under traditional financial reporting frameworks before. They&#x27;ve pushed to classify DeFi platforms as broker-dealers. The industry pushed back.
The rule represents another step. The government wants to close the tax reporting gap in crypto markets. Digital asset transactions have grown in volume. They&#x27;ve grown in complexity. Regulators want compliance tools comparable to traditional securities markets.
The electronic-only approach would improve efficiency. It&#x27;d reduce administrative costs for brokers and the agency. Theoretically.
But there&#x27;s friction. Exchanges are working to expand user bases. They&#x27;re trying to improve accessibility. Service termination over form delivery preferences adds a new compliance dimension. It extends beyond actual tax obligations.
The relationship between platforms and customers just got more complicated.

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IRS Proposes Electronic-Only Tax Forms for Crypto

IRS proposes mandatory electronic delivery of Form 1099-DA for crypto exchanges. Paper forms eliminated. Refusal could terminate your account.