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The IRS earlier this month issued proposed regulations (REG-105064-25) to make it easier for digital asset brokers to obtain customer consent to deliver Form 1099-DA statements electronically.
The proposed regulations would apply to Form 1099-DA statements required to be furnished on or after Jan. 1 of the calendar year following publication of the final regulations.
Under Section 6045, a broker is required to file an information return with the IRS and furnish payee statements related to Form 1099-DA to identify customers with their name, address, tax identification number, gross proceeds from the digital asset transaction and, in certain circumstances, the customer’s adjusted basis in the assets sold.
Under existing guidance, brokers are required to obtain consent from each customer to provide the electronic payee statement; if a customer does not consent to electronic delivery or withdraws consent, the Form 1099-DA statements are required to be furnished on paper.
The proposed regulations would allow a broker to terminate a business relationship with a customer if they do not consent to receiving electronic Form 1099-DAs.
The rules for obtaining consent would mirror those under Section 6051 for furnishing Form W-2 payee statements; brokers would still need to obtain “positive consent” to receive Form 1099-DA statements electronically. Positive consent is treated as obtained if the customer performs an explicit action to provide consent, such as checking a box, clicking a button, or completing a fill-in screen. However, the broker would no longer be required to give the customer the option of receiving the statements on paper or the option to withdraw previously provided consent.
The consent procedures in the proposed regulations are specific to Forms 1099-DA and would not include other payee statements such as Form 1099-B.
The proposed regulations provide options for a broker to deliver the Form 1099-DA electronically, either by posting to a specified location that is electronically accessible such as the broker’s website, mobile device application, other online platform, or by attaching them to an email.
Brokers that choose to furnish the Form 1099-DA statements by posting to a specified location that is electronically accessible are required to provide proper notice by email that the statements are available. If a broker’s email is returned undeliverable, they may be required to send the Form 1099-DA to the customer by mail within 30 days of the undeliverable response.
Since the due date for Forms 1099-DA statements is Feb. 15 of the calendar year following the year of the digital asset sale transaction, the proposed regulations would require brokers to retain and make available to customers previously furnished Form 1099-DA statements for seven years from the date the Form 1099-DA statements are required to be furnished or, if later, the date the Form 1099-DAs were actually furnished.
Coinciding with the proposed regulations, the IRS also released Notice 2026-4 (PDF - 129.24KB) requesting comments on whether the IRS should modify the electronic furnishing requirements applicable to any persons other than brokers required to furnish payee statements.
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