Digital Asset Brokers to Mandate Electronic Delivery of Tax Forms Starting 2027

According to new rules proposed by the U.S. Internal Revenue Service (IRS) and the Treasury Department, digital asset brokers can exclusively deliver Form 1099-DA tax forms to users electronically, starting January 1, 2027, eliminating the mandatory provision of paper versions. The proposal is currently in the public comment phase and aims to enhance tax compliance efficiency in line with the digital asset reporting system under Section 6045 established by the Infrastructure Investment and Jobs Act of 2021. Under the new rules, brokers are not required to offer an option to unsubscribe from electronic delivery, nor are they obligated to maintain paper mailing services. Instead, they must ensure that users can clearly receive electronic notifications and maintain securely stored, easily retrievable tax records on a stable online platform for the long term. This shift transforms operational processes that previously relied on printing and mailing into a service model centered on digital notifications and cloud-based access.

Industry feedback generally supports this direction. In its formal comment letter, Coinbase pointed out that a full transition to electronic delivery could significantly reduce environmental costs and the logistical burden of handling a large volume of small transactions. They also suggested simplifying non-essential fields in the forms to improve user experience. Additionally, the company urged regulators to provide an approximately 18-month transition period after the final rules are published to allow platforms to complete system upgrades and user notifications. This regulation primarily applies to centralized trading platforms, such as cryptocurrency exchanges, that provide tax forms to users. Although the definition boundaries of some market participants are still under discussion, the electronic delivery framework clearly focuses on institutions that already have the capability for digital delivery.

Regulatory agencies emphasize that this move is an important part of the overall effort to promote tax transparency for digital assets, which will not only help improve taxpayers' access to information but also strengthen the compliance responsibilities of intermediaries. Aviva Aron-Dine, Acting Assistant Secretary for Tax Policy at the U.S. Treasury Department, stated, "This measure will help taxpayers more easily fulfill their tax obligations while curbing tax avoidance by high-net-worth investors." For brokers, the core obligations include: sending electronic notifications in a timely manner, ensuring long-term access to historical reports, and guaranteeing that users can seamlessly retrieve their tax documents. For users, becoming familiar with the electronic tax receipt process and properly safeguarding account login information will be a crucial step for future tax compliance.