Compliance
How US Digital Asset Brokers Can Transition to Fully Electronic 1099-DA Statements
An upcoming IRS proposed regulation aims to ease burdens for brokers by allowing fully digital 1099-DA furnishing starting January 1, 2027 — here’s how to prepare.
By NomadicTax Research Team • 5-8 min read • April 7, 2026
## Overview of the Proposed Rule
The Treasury Department and IRS recently issued proposed regulations under **REG-105064-25** to simplify how digital asset brokers furnish 1099-DA statements. Under the current rules, brokers must provide a paper 1099-DA unless a customer **affirmatively consents** to electronic delivery. The new proposal would allow brokers to require that consent **without offering a paper alternative**, potentially eliminating the burden of printing and mailing statements to customers who transact entirely online. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Key Changes Under Proposed Regulations
- Consent can be obtained via **pop-ups or website/mobile app interfaces**, not just paper-based methods. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- Brokers must provide notice if hardware/software changes might prevent customers from accessing the statement. If so, *new consent* is required. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- For transactions happening on or after **January 1, 2027**, brokers will be able to opt into this electronic-furnished model if the proposed rule is finalized. ([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))
## Actionable Insights: What Brokers and Customers Should Do Now
### For Brokers:
- Audit your technical infrastructure: ensure website and app platforms can securely deliver 1099-DA statements, with user authentication and long-term access.
- Build consent flows: design clear, compliant consent prompts explaining that electronic delivery means customers may lose paper statements.
- Prepare for a longer retention period of electronic statements and mechanisms for customer access or requests.
### For Customers:
- If you trade digital assets, monitor communications from your broker for any consent request. Understand what you're signing up for.
- Keep copies of your 1099-DA statements, especially when your assets are in real property or when basis reporting applies.
- Pay attention to changes in hardware/software to ensure continued access. If something changes, you may need to reassert consent.
## Examples:
- **High-volume crypto trader**: It may no longer be worth having paper 1099-DA forms. A digital platform under the new rules could shift to all-electronic delivery if you agree.
- **Rare investor with spot-digital real estate transactions**: You’ll still get reporting on fair market value for real property paid in digital assets starting in 2026. ([irs.gov](https://www.irs.gov/filing/digital-assets?utm_source=openai))
## Caveats & Timeline
- These rules are **proposed**, not yet finalized. Comments were due by **May 5, 2026**, under the public rulemaking process. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- If not finalized, current paper/electronic hybrid rules continue.
- Must comply with enhanced consumer protection: consent, notice, access, withdrawal mechanisms.
## Takeaway
The proposed regulation is a major shift toward recognizing that digital asset transactions are primarily electronic. Both brokers and taxpayers should act now to understand how these changes will affect reporting, systems, and record-keeping. With proper planning, you’ll avoid surprises when the change goes live on Jan 1, 2027.