News
Exchanges like Coinbase must report trading information to the IRS starting in 2026
Top line
The Treasury Department will require most cryptocurrency brokers to disclose user transaction proceeds to the Internal Revenue Service starting in the next two years, the agency said he said Fridaya reporting obligation introduced to brake tax evasion through the cryptocurrency market.
PARIS, FRANCE – APRIL 13: The obligation will come into force in 2026. (Photo by Chesnot/Getty … [+] Images)
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Main aspects
The rule, which goes into effect in 2026, requires cryptocurrency exchanges and payment processors like Coinbase to report user sales and trade information to the IRS, according to a declaration from the agency.
The IRS said the rule is not a new tax, noting that cryptocurrency investors have always had to pay taxes when selling their assets, and the new rules are “similar to those already applied to traditional financial services.
The rule is being touted as a way to prevent tax evasion on crypto platforms, which can lead to crimes more accessible thanks to the fact that transactions can be linked to public addresses that are difficult to link to individual traders.
The change also means that cryptocurrency traders will receive simple tax reporting forms every year like investors in stocks and other traditional assets the Wall Street Journalwhich points out that cryptocurrency investors have historically relied on expensive and inaccurate service providers to estimate their taxes.
The new rule has exceptions, including one that excludes decentralized exchanges, which emphasize peer-to-peer trading without the use of intermediaries, from having to report user transactions.
However, the Treasury Department has indicated that it will consider additional reporting requirements this year designated for decentralized cryptocurrency exchanges, according to declaration.
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Big number
$28 billion. That’s the estimated amount of money the reporting requirement will generate in tax revenue for the federal government, according to Deloitte.
Key background
Federal regulators have been trying to regulate cryptocurrency companies for about a decade. In recent years, the Securities and Exchange Commission has filed lawsuits, charges and sanctions against large cryptocurrency companies such as Binance, Monetary base AND FTX. The IRS has required cryptocurrency investors to report their transactions on their tax returns, but has not had the power of a regulatory net as wide-reaching as the tax reporting rule passed Friday. Instead, tax authorities like the IRS have reluctantly relied on subpoenas to correctly identify transactions that are of interest to them, according to Deloitte, which noted that the challenge of regulating cryptocurrencies is largely influenced by ongoing market changes .
Further reading
Cryptocurrencies will see stricter tax rules starting in 2026 (WSJ)
Tax returns in the age of cryptocurrencies (Deloitte)