Compliance
Compliance Spotlight: Navigating the Gross Proceeds Reporting Rule Rollback
Congress disapproved a rule that would have required brokers to report gross proceeds from digital asset sales—but compliance obligations still evolve, and tax professionals need clarity.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## Rule Revocation: What Happened
- The IRS’s Final Rule titled **“Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales”**, published December 30, 2024, was **revoked** by Congress using the Congressional Review Act. The rule would have required custodial brokers and others to report gross proceeds from digital asset transactions. It had an effective date of **February 28, 2025**. ([irs.gov](https://www.irs.gov/irb/2025-31_IRB?utm_source=openai))
- Because of this disapproval, the rule has **no legal force or effect**, and the regulations have been reverted to the text in place prior to that rule. ([irs.gov](https://www.irs.gov/irb/2025-31_IRB?utm_source=openai))
## Ongoing Requirements Despite the Revocation
The disallowed rule doesn’t cancel all reporting obligations related to digital assets. Key points remain:
- Final regulations under Section 6045 and Infrastructure Act still require brokers to issue Form 1099-DA for **gross proceeds** from certain digital asset sales for calendar years **on or after January 1, 2025**. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- Basis reporting: Brokers must report adjusted basis and gain/loss in certain circumstances beginning **January 1, 2026**. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- Identified transaction types (staking, wrapping, etc.) remain excluded from mandatory reporting until more guidance is issued. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- Backup withholding obligations and associated penalties are under transitional relief, depending on broker’s compliance, TIN matching, and transaction type. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
## What Tax Professionals Should Do Now
1. **Review clients’ transactional behavior**
- Determine which brokers are custodial vs non-custodial, whether clients engage in DeFi or excluded transaction types.
2. **Ensure clean TIN data**
- If brokers submit name-TIN combinations that match IRS records via TIN Matching, clients avoid backup withholding risk for many 2026-2027 transactions. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
3. **Communicate and coordinate with brokers**
- Clients should ask their brokers what kind of digital asset services are provided, how reporting will work for 2025 and beyond. Brokers need to be ready to issue statements by February 2026 reflecting 2025 transactions. ([irs.gov](https://www.irs.gov/newsroom/tax-professionals-can-prepare-now-to-assist-their-clients-with-reporting-proceeds-from-certain-digital-asset-transactions?utm_source=openai))
4. **Document basis and acquisition metadata carefully**
- For assets acquired over multiple venues or with complex histories, consider using tools or advisors to track cost basis and holding dates.
## Hypothetical Scenario
Adam holds cryptocurrency across multiple platforms and engages in staking. One of his exchanges is custodial and another provides hosted wallets. Also, he staked some coins, wrapped others. Under new rules:
- His custodial exchange must report gross proceeds for his 2025 trades via Form 1099-DA.
- Basis reporting begins in 2026 for eligible transactions held in same brokerage relationship. For his staking and wrapping, reporting may be delayed or excluded until further guidance.
- If Adam’s brokers did not provide accurate TIN matching or have mismatched name/TIN, backup withholding may apply in certain cases.
## Bottom Line
The revocation of one particular rule caused confusion—but key broker reporting obligations under TD 10000 and section 6045 remain in force. Compliance now means understanding what’s required, when it’s required, and making sure transactional and identity documentation is polished.