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) 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)
- Access: Even if consented electronically, customers must have continued, reliable access to their 1099-DA statements.(irs.gov)
- 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)
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.