Crypto Exchange Broker Reporting Cancelled
In March of 2025, the Congress passed bipartisan legislation blocking enforcement of the exchange reporting requirement. The reporting measure, which the IRS delayed multiple times in response to industry criticism, became ripe for legislative challenge under a procedural rule that grants the Congress sixty days to overturn final government regulations.
The remainder of this post is retained for context, but is now moot. ____________________________________________________________________________________________________________In late 2022, the IRS announced that brokers will not be required to report or furnish additional information with respect to dispositions of digital assets, issue additional statements, or file any returns with the IRS on transfers of digital assets, until the IRS issues applicable final regulations. In the meantime, a broker may report gross proceeds and basis as required under existing law and regulations as of 12/23/2022 (i.e. regulations that create a reporting obligation but don’t apply specifically to cryptocurrencies).
The Infrastructure Investment and Jobs Act, enacted in 2021, amended provisions in Internal Revenue Code Sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers. The reporting rules for digital assets were originally scheduled to come into effect for returns or statements required to be filed or furnished after 12/31/2023. This means the first time taxpayers would have expected to see 1099-B statements with virtual currency activity notated is early 2024.
The IRS frequently delays implementation of proposed regulations or scraps them entirely for technical or policy reasons. Under current law, proposed regulations issued since 1988 must undergo a notice and comment period and expire not later than three years after issuance. The delay in implementing crypto reporting by brokers does not impact individual taxpayer reporting requirements imposed by other Code sections or otherwise impact the taxability of virtual currency gains.
If you have questions about cryptocurrency reporting, contact us!
