Digital Nomad
Digital Assets Reporting: Preparing for Electronic 1099-DA and Guidance Removal of Basis-Shifting TOI Rules
New proposals may require digital asset brokers to furnish 1099-DA statements electronically and remove outdated basis-shifting regulations for reporting tax outcomes.
By NomadicTax Research Team • 6-7 min read • May 14, 2026
## Emerging Regulatory Changes for Digital Asset Stakeholders
- **Proposed regulations** from the U.S. Treasury and IRS would allow digital asset brokers to **provide Form 1099-DA** statements electronically, instead of mailing paper copies, beginning **January 1, 2027**, subject to enhanced notice and delivery standards. ([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))
- **Notice 2026-4** seeks public comment on modifying requirements for electronic furnishing of other payee statements (e.g. 1099-B) and possibly taking away the obligation to issue paper statements in many cases. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Removal of Basis-Shifting TOI Regulations
- Treasury and IRS have proposed removing the **Basis-Shifting Transfer or Importation of Income (TOI)** regulations, which previously limited how partnerships and material advisors shifted basis. The removal would apply retroactively to taxable years beginning **January 1, 2026**, if finalized. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Why These Developments Matter
- **Brokers and platforms** that handle digital asset transactions will experience lower costs and burdens from printing, mailing, and handling physical forms. Electronic delivery is aligned with the operating model of many crypto services.
- **Taxpayers** will benefit from quicker access to statements, especially if managing many small digital-asset trades.
- Removing outdated and complex basis-shifting restrictions may reduce compliance risk and retroactive exposure for certain partnership or material-advisor transactions.
## Strategic Steps to Take
- Digital asset platforms should begin implementing processes to allow secure electronic consent and electronic access portals for customers. Review whether current workflows meet heightened notice and access obligations required under the proposed regulation.
- Accessible recordkeeping: maintain logs of customer consent, delivery timestamps, and links to electronic statements, to document compliance.
- Monitor regulatory finalization: if the removal of basis-shifting TOI regulations goes through, adjust partnership agreements and reporting practices for years starting Jan 1, 2026.
## Example Scenario
A cryptocurrency exchange that currently mails paper 1099-DA statements to customers may transition in 2027 to emailing or posting these in user portals. If they secure proper electronic consent and deliver notice appropriately, they can stop printing large volumes and reduce mailing delays.
These changes reflect the U.S. IRS’s progress in adapting tax administration to digital asset realities—making electronic handling of information reporting a central compliance priority.