US Treasury finalizes crypto rules to prevent tax evasion
New crypto rules by the US Treasury mandate transaction reporting to the IRS, targeting tax evasion.
The US Treasury Department has introduced a new rule obligating cryptocurrency platforms, such as exchanges and payment processors, to report their users' transactions to the Internal Revenue Service. This measure is designed to ensure that individuals accurately pay taxes on their crypto earnings, reducing the risk of tax evasion.
The rule will simplify the tax filing process for users, as brokers will now provide 1099 forms, specifically the 1099-DA form, created to track crypto transactions. This new regulation sets a $10,000 reporting threshold for transactions involving stablecoins, which are cryptocurrencies tied to fiat currencies like the US dollar.
However, this rule only applies to centralized platforms like Coinbase or Binance, with decentralized platforms expected to comply with a separate set of rules to be finalized later. Brokers will begin reporting digital asset sales proceeds in 2026 for transactions completed in 2025, meaning crypto traders will be responsible for their transactions in 2024. Aviva Aron-Dine from the Treasury emphasized that these regulations would help ease tax filing and curtail tax evasion by wealthy investors.