[DigitalToday reporter Chi-kyu Hwang (황치규)] The U.S. Internal Revenue Service (IRS) has signalled a change in how cryptocurrency exchanges file tax reports, The Block reported on March 5 local time. If new rules are approved, cryptocurrency exchanges such as Coinbase and Kraken would be able to provide customers with tax forms electronically instead of on paper.
Under existing rules, exchanges can choose to provide customers with paper documents, but the revision would set electronic filing as the default option.
The Block said this is part of an IRS policy to strengthen monitoring of digital asset transactions.
From this year, cryptocurrency exchanges must report total transaction proceeds and costs through the 1099-DA form, allowing the IRS to automatically obtain investors' profit and loss information. This is seen as a step to reduce the possibility of tax evasion and tighten regulation of cryptocurrency holders.
The IRS plans to allow exchanges to end business relationships with customers who refuse electronic filing if the rule takes effect. The proposal has not yet been formally approved and is currently in a public comment period.
Chi-kyu Hwang
delight@d-today.co.kr