Digital Nomad
Digital Asset Brokers and 1099-DA: New Proposed Electronic Furnishing Rules
IRS proposes changes to let digital asset brokers deliver 1099-DA statements electronically without offering a paper option, easing burden—set to take effect in 2027.
By NomadicTax Research Team • 5-8 min read • May 23, 2026
## What’s proposed?
The IRS issued **proposed regulations** in **March 2026** to allow digital asset brokers to **furnish Form 1099-DA (reporting digital asset proceeds)** electronically **without** needing to offer paper copies to customers—all starting for statements furnished on or after **January 1, 2027**.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-to-make-it-easier-for-digital-asset-brokers-to-provide-1099-da-statements-electronically?utm_source=openai)) The proposal aims to ease costs and streamline reporting, especially given the volume and digital nature of digital asset transactions.
## Key provisions in the proposal
- **Consent rules**: Brokers must obtain customer consent via enhanced electronic notice/delivery requirements. Withdrawals of consent may not be mandatory under the new process.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-to-make-it-easier-for-digital-asset-brokers-to-provide-1099-da-statements-electronically?utm_source=openai))
- **Access**: Even if consented electronically, customers must have continued, reliable access to their 1099-DA statements.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-to-make-it-easier-for-digital-asset-brokers-to-provide-1099-da-statements-electronically?utm_source=openai))
- **Effective date**: These rules are optional for statements furnished *on or after* **January 1, 2027**. Until finalized, broker may still need to offer paper versions.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-to-make-it-easier-for-digital-asset-brokers-to-provide-1099-da-statements-electronically?utm_source=openai))
## Implications for stakeholders
**Brokers**:
- Can reduce printing and mailing costs for 1099-DA statements.
- Must upgrade systems for electronic delivery, secure portal access, notices and consent tracking.
**Customers/taxpayers**:
- Easier receipt of statements. No paper required if electronic consent given.
- Need to monitor electronic portals or accounts; missing a notification could lead to missed statements.
**Compliance risk**:
- Non-consent or breaches in notice/delivery rules could lead to penalties.
- Brokering firms need to document consents and access.
## Practical advice for brokers and users
- Brokers should begin preparing infrastructure for electronic delivery: secure online portals, email/mobile notifications.
- Update consent forms / user agreements in advance, clarifying that paper versions may be omitted under new rules.
- Taxpayers with large digital asset transactions should check broker practices—switching to electronic can help speed receipt and filing.
- Keep records—consents, notices, portal access dates—to defend against any compliance scrutiny.
## Hypothetical example
CryptoBrokers Inc. maintains an online dashboard for clients. Under current rules, they mail paper 1099-DA unless clients consent. After adopting electronic furnishing rules starting Jan 1, 2027, they send notice to all clients via email and app push: “Consent to electronic 1099-DA.” Clients who agree (say 90%) will no longer receive paper statements. Those who don’t will continue to get both. All clients can access statements in dashboard.
**Bottom line**: If you’re involved with digital assets—whether broker or trader—this proposal signals a move toward full digitization of tax reporting. Embrace the upcoming changes now to ensure a smooth transition.