IRS Finalizes New Cryptocurrency Tax Reporting Rules

Crypto platforms will have to report transactions to the tax office starting in 2026. However, decentralized platforms that do not store assets themselves will be exempt.

Here are the key takeaways from new regulations that the IRS and the U.S. Treasury finalized Friday — essentially implementing provisions of the Biden administration’s Infrastructure Investment and Jobs Act, which was signed into law in 2021.

Gains from selling cryptocurrencies and other digital assets are taxable even without these new rules; however, there has been no real standardization in how these gains are reported to individual investors and the government. Starting in 2026 (covering transactions in 2025), cryptocurrency platforms must provide a standard Form 1099, similar to those sent by banks and traditional brokerages.

In addition to making it easier to pay taxes on cryptocurrencies, the IRS has also said it is trying to crack down on tax evasion.

“We must ensure that digital assets are not used to conceal taxable income and that the final regulations will improve the detection of noncompliance in the high-risk area of ​​digital assets,” IRS Commissioner Danny Werfel said in a statement.

But again, these regulations apply to “custodial” platforms (like Coinbase) that actually seize customer assets. Following lobbying from the cryptocurrency industry, decentralized brokers that do not seize assets are excluded from these regulations.

In fact, the Blockchain Association (an industry lobbying group) called the exclusion “a testament to the incredibly powerful voice of our industry and community.”

The Treasury Department and IRS have said they will address these decentralized brokers in a separate set of regulations.