Refusing new IRS crypto tax forms could cost you your exchange account

The IRS has proposed a rule change allowing cryptocurrency exchanges to require customers to receive Form 1099-DA electronically, shifting tax reporting from mail to in-app or email delivery. Under this proposal, exchanges could terminate relationships with customers who decline electronic consent, effectively forcing users to accept digital-only forms with no guaranteed paper backup.

This change does not alter the information reported to the IRS, which still receives data electronically. The primary impact is on the consumer experience, moving tax reminders from physical mail to digital document centers, which could lead to missed deadlines for inattentive users. The proposal is part of a broader compliance buildout, including the mandatory filing of Form 1099-DA starting in 2025, aimed at closing the significant gap between reported crypto sales and estimated ownership, potentially raising $28 billion over ten years.

While the proposal creates permission, not a mandate for exchanges to adopt digital-only delivery, users should anticipate this becoming standard. Taxpayers must still maintain their own basis records, as initial forms may only report gross proceeds. The shift standardizes infrastructure for automated enforcement, making crypto compliance less informal and harder to ignore.

(Source：CryptoSlate)