• IRS allows crypto exchanges to deliver Form 1099-DA electronically only.
• Users may face account termination if they refuse e-consent.
• Tax compliance will rely on maintaining accurate digital transaction records.

IRS Crypto Form 1099-DA Proposal aims to streamline crypto tax reporting by allowing electronic-only delivery. By removing mandatory paper forms and integrating document access within exchange platforms.

IRS Shifts Crypto Tax Forms to Digital Channels

The IRS proposal introduces electronic delivery for Form 1099-DA, reporting digital asset transactions. This change focuses on how users receive forms rather than altering broker reporting obligations.

Brokers continue submitting identical information to the IRS. Under the proposal, exchanges may request consent for electronic delivery during account setup.

Customers who decline may face termination, creating a consistent digital workflow for all users. The consent process could appear as a pop-up with mandatory agreement.

Once consent is given, exchanges are not required to allow withdrawal while maintaining the account. The only fallback is a notice if email delivery fails.

Users will access forms through document centers or direct email attachments.

Compliance and Reporting Timeline

Crypto brokers’ Basis reporting will begin in 2026 for assets acquired and held with the same broker.

This phased approach will ensure users maintain accurate gain and loss calculations.

Up to 75% of taxpayers with digital assets are considered noncompliant. The IRS Automated Underreporter program has already identified over 1 million underreported cases in fiscal 2023.

This brings the total to $6.6 billion. Therefore, the Joint Committee on Taxation projects digital asset reporting could generate roughly $28 billion over ten years if there is compliance.

Electronic delivery streamlines compliance, making automated matching between reported and actual transactions more efficient.

User Experience and Platform Access

For retail users, electronic delivery changes tax season into a notification event rather than a mailed reminder. Users must ensure emails remain current and notifications are active to avoid missed deadlines.

Exchanges will integrate consent into onboarding or account settings. Document centers will store tax forms alongside trade confirmations and alerts.

Seven-year retention ensures historical access, but users need to locate forms proactively. CSV exports or API access may be required for multi-platform transactions.

Coinbase reported 9.2 million monthly transacting users in 2025 with $376 billion in assets. As platforms adopt mandatory electronic delivery, millions of users will shift to digital-only access for tax forms.

Users should back up trade histories regularly to ensure complete reporting.