US Treasury Department issues proposed regulations for reporting digital asset transactions.

The U.S. Treasury Department and IRS issued proposed regulations to implement new tax reporting rules for digital asset transactions, as required by the 2021 Infrastructure Investment and Jobs Act (IIJA). The proposal would treat many intermediaries in the crypto ecosystem as “brokers” and require them to report customers’ digital asset sales and certain exchanges to the IRS on new information returns, similar to existing 1099 reporting for securities. The rules are aimed at improving tax compliance for crypto and related assets without creating new taxes, by standardizing how gains, losses, and basis are reported. Under the proposed framework, the definition of a digital asset broker would extend beyond traditional centralized exchanges to cover a broad range of entities that facilitate transfers of digital assets for customers, including some wallet providers, payment processors, and trading platforms, depending on how they interact with users. The regulations specify what qualifies as a “digital asset,” set detailed rules for calculating gain/loss and basis, and outline backup withholding requirements, mirroring information-reporting concepts already used in traditional finance. Industry analyses note that the rules would introduce new operational and data-collection obligations for affected firms, which must be able to identify customers, track cost basis, and issue proper tax forms on a defined timeline once the rules take effect. The proposal is significant because it operationalizes Congress’s directive to close the tax reporting gap in the fast‑growing crypto and digital asset market by aligning it with long‑standing broker reporting standards applicable to stocks and bonds. Policymakers view enhanced information reporting as a way to reduce underreporting of income from digital assets, improve taxpayer compliance, and give both investors and the IRS clearer, standardized information about taxable events, while also raising questions within the industry about the scope of the “broker” definition and the treatment of more decentralized or non‑custodial business models.

✨ AI-generated background, compiled from web sources — not editorial content.

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