Compliance
The Move to Electronic Payee Statements: What Employers and Brokers Need to Know under Notice 2026-4
IRS Notice 2026-4 proposes changes to electronic furnishing of payee statements, affecting employers and brokers in how they deliver W-2s, 1099s, and digital asset statements.
By NomadicTax Research Team • 5-8 min read • April 5, 2026
## What is Notice 2026-4?
Notice 2026-4, published in **Internal Revenue Bulletin 2026-13** (March 23, 2026), is a **request for comments** from the Treasury Department and IRS. It asks whether current requirements for furnishing certain payee statements (like Forms 1099, W-2, and 1099-DA) electronically should be modified. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) It specifically addresses:
- Rules that brokers must follow to furnish payee statements electronically and still be considered “timely” under IRS rules. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- Whether others beyond brokers (e.g. employers, payers) should be allowed similar flexibility and updated consent procedures. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Key Provisions Under Consideration
- **Streamlining consent**: changing how and when payees consent to receive statements electronically, perhaps reducing verification burdens. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- **Format and notice requirements**: ensuring electronic statements contain the full required content, and that recipients are properly notified. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- **Access period obligations**: how long statements must remain available online. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- **Updating forms subject to electronic furnishing**: 1099-DA, 1099-B composite statements, tax-form statements may be impacted. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Implications for Employers, Brokers, and Taxpayers
- **Employers** who furnish W-2s and similar statements must monitor consent procedures and may need to adopt new systems to securely furnish statements electronically while complying with IRS rules.
- **Brokers** dealing with digital assets and other financial instruments may have to update their platforms to deliver electronic payee statements, handle consent and withdrawal, and manage statement corrections online. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
- **Taxpayers** should keep awareness of how they consent and where statements are delivered; missing or incorrect statements could lead to missed income reporting or tax issues.
## Actionable Steps for Compliance & Best Practices
1. **Audit your electronic consent processes**
- Are your consent forms E-SIGN Act compliant?
- Can people opt out / withdraw easily?
- Do they understand what software/hardware is needed to access statements? ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
2. **Maintain clear notice procedures**
- If posting statements online, notify recipients promptly;
- If statements are posted on websites or portals, ensure lasting access requirements (e.g., until October following the tax year). ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
3. **Ensure statement content and corrections are handled properly**
- Electronic statements must include all required fields;
- If issuing corrections, notify recipients within required timelines. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
4. **Track eligibility of forms and receipts**
- Determine if certain forms (W-2, 1099 variants, including 1099-DA) can be furnished electronically under new rules;
- Monitor proposed IRS guidance to see if more flexibility expands. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## Example
Suppose a brokerage issues 1099-DA statements to customers with whom they have digital relationships. Under current rules, they obtain explicit consent and ensure the format is accessible. Under proposed changes from Notice 2026-4, the brokerage might be able to use simpler consent (less verification of device compatibility) and keep statements accessible online with less notice burden. But until rules are finalized, existing obligations must be met.
## What’s Next
Notice 2026-4 is in the **request for comments** phase. Comments are due by **May 23, 2026**. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-04.pdf?utm_source=openai)) Because this is still proposed, the final requirements may evolve. Participants (employers, brokers, financial institutions) should monitor IRS bulletins and proposed regulations over the summer and fall 2026.
In short, Notice 2026-4 signals the IRS’s intent to modernize and simplify how payee statements are furnished, especially electronically—making processes more efficient, but raising new compliance considerations in the meantime.