Compliance

Digital Asset Brokers May Go Paperless: IRS Proposes New Rules for 1099-DA Statements

New IRS proposed regulations aim to allow digital asset brokers to provide 1099-DA tax statements electronically without requiring paper unless requested, reducing burden for buyers and sellers alike.

By NomadicTax Research Team • 5-8 min read • June 17, 2026

## What’s Changing & Why It Matters Digital asset transactions generate massive volumes of Form 1099-DA filings. Under existing IRS rules, brokers must send these statements on paper unless a customer **opts-in**, and even then, they must offer a paper version. The proposed rule under Notice 2026-29 (March 5, 2026) seeks to shift that.([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)) Starting **January 1, 2027**, brokers may follow new rules: they can obtain consent for electronic delivery without having to offer paper statements to unconsenting customers—provided enhanced notices and continued access to statements are ensured.([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)) This reduces printing and mailing costs, especially for high-volume digital asset brokers. It also adds convenience for customers who already engage online. --- ## What the Proposed Regulations Say - **Electronic consent** can be obtained through a streamlined process without offering paper alternatives, as long as customers are aware that the document has been furnished electronically.([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)) - Brokers must provide **continuing access** to statements—archived access even after consent changes. - Enhanced notice and delivery requirements to ensure customers aren’t left uninformed. - These rules are optional: brokers **may** follow them starting with statements furnished on or after **January 1, 2027**. Until then, current paper or electronic rules apply.([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)) --- ## Practical Tips for Brokers & Taxpayers **For brokers and providers:** - Audit current processes for 1099-DA statements: how you collect consent, how you store it, and how customers receive notices. - Update systems now to enable full electronic delivery—including web portals, email notifications, and customer dashboards. - Plan for January 1, 2027 as a key rollout date. Decide whether to opt in early. For those who don’t choose the new rules, continue providing paper statements or offer paper choices. **For taxpayers:** - Keep track of whether you receive statements electronically; ensure you have reliable access (e.g. email, portal). - If you prefer paper, check whether the broker must still offer that under the default process. Under new rules, paper may be phased out unless you opt in or haven’t given consent. - Maintain all statements for your tax purposes. Digital versions must be preserved just like paper ones. --- ## Illustrative Example Imagine Alice, who trades NFTs and other digital assets through a broker. Under current rules, she receives 1099-DA statements by mail or email based on earlier consents, and brokers must offer paper if she doesn’t opt in. Under the new rule from Jan 1, 2027, her broker may send statements electronically by default once she consents—no need to offer paper alternatives—and ensure she has access online. If she moves and loses access, she must proactively inform broker or re-opt in. Bob, on the other hand, never agreed to digital delivery; his broker must follow current rules until he provides consent. --- ## What to Do Now - Review your broker’s statement delivery policy. If you prefer electronic, confirm consent processes. If you prefer paper, ensure you have paper delivery enabled. - Brokers should look at infrastructure—secure websites, archiving, email systems—and plan systems to comply with enhanced notice & access requirements. - Tax professionals should evaluate client portfolios: digital asset investors need to track basis, holding periods, and ensure they receive and retain correct documentation. --- ## Implications & Challenges - **Electronic archiving** becomes crucial; taxpayers must ensure they can access past statements for audit or income reporting. - **Privacy & cybersecurity risks** grow with electronic notices—brokers must secure transmission and storage. - **Customer awareness** is essential: loss of physical paper might mean people miss notices, so communication must be clear. This change reduces costs for both brokers and IRS while modernizing document exchange. But proper implementation and notice will be the needle movers.