Biden administration unveils new crypto tax reporting rules
By Hannah Lang
(Reuters) -Cryptocurrency brokers, including exchanges and payment processors, would have to report new information on users' sales and exchanges of digital assets to the Internal Revenue Service (IRS) under a proposed U.S. Treasury Department rule published on Friday.
The rule is part of a broader push by Congress and regulatory authorities to crack down on crypto users who may be failing to pay their taxes.
A proposed new tax reporting form called Form 1099-DA is meant to help taxpayers determine if they owe taxes, and would help crypto users avoid having to make complicated calculations to determine their gains, the Treasury Department said.
It would also subject digital asset brokers to the same information reporting rules as brokers for other financial instruments, such as bonds and stocks, Treasury said.
Under the proposal, the definition of a «broker» would include both centralized and decentralized digital asset trading platforms, crypto payment processors and certain online wallets where users store digital assets. The rule would cover cryptocurrencies, like bitcoin and ether, as well as non-fungible tokens.
Brokers would need to send the forms to both the IRS and digital asset holders to assist with their tax preparation.
The new requirements stem from the $1 trillion 2021 Infrastructure Investment and Jobs Act, which included a provision that aimed to increase tax reporting requirements for digital asset brokers. It instructed the IRS to define what firms qualified as crypto brokers and provide forms and instructions for reporting.
It also extended reporting requirements for certain cash transactions of more than $10,000 to digital assets.
At the time the bill was passed, it was estimated
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