Log into Coinbase next tax season and your tax documents may no longer arrive in the mail.
Under a new IRS proposal, crypto exchanges could be required to file Form 1099-DA electronically. This form reports transactions in digital assets and may refuse to do business with customers who refuse to provide it.
The comment period closes on May 5 and if this rule is finalized, crypto tax reporting would move from the mailbox to the platform.
This is not a tax cut or a rollback of reporting requirements. Brokers still send identical information to the IRS regardless of how they deliver forms to clients. The proposal allows exchanges to mandate app-based delivery.
The result: millions of crypto users would receive tax forms exclusively via email and in-app document centers, with no paper backup and no right to switch back.
The twist: crypto taxes aren’t getting lighter. They become quieter.
What actually changes
The IRS proposal creates an alternative electronic delivery process for Form 1099-DA.
Current rules require brokers to offer customers paper forms. The proposal would allow exchanges to use streamlined consent, where customers agree to electronic delivery during account setup, and exchanges could end relationships with anyone who refuses.
Consent would likely appear as a pop-up with an “I agree” button, with language indicating that the broker may not continue to serve customers who decline.
Once customers consent, exchanges are not required to let them withdraw that consent while they remain customers. The only guaranteed paper fallback would be a notice if email delivery fails, not the entire tax document.
Delivery would be via posting forms to an online document center with email notification or via a direct email attachment.
Exchanges must maintain access until October 15 of the following year and keep previous statements for seven years. For undeliverable email, a physical notification will be sent within 30 days, but that is procedural and not a replacement for the email many users expect.
| Subject | What changes versus what doesn’t |
|---|---|
| Broker reports to the government | No change — IRS is still receiving the data |
| Delivery method for the customer | Changes – can only be app/email |
| Paper option required | Can disappear — no mandatory paper alternative |
| Reject electronic delivery | Possible account termination |
| Withdraw the electronic consent later | Not required to be allowed |
| Where to find the form | Document Center / Email Attachment |
| Access window | Until October 15 of the following year |
| Conservation | 7 years available on request |
| If email fails | Paper notice within 30 days (note, not the complete form) |
The bigger enforcement shift
This proposal is part of a larger compliance expansion.
Beginning with transactions on or after January 1, 2025, crypto brokers must file Form 1099-DA reporting gross proceeds.
Basic reporting, cost information needed to calculate gains and losses, phased in for certain transactions from January 1, 2026, only for covered assets obtained from and held with the same broker.
The enforcement math is significant. A report from the Government Accountability Office shows that the IRS Automated Underreporter program identified potentially underreported income in more than 1 million cases in fiscal year 2023, totaling $6.6 billion.
Form 1099-DA feeds that match the matching engine. An IRS research paper found that 6.5% of individuals, 17.4 million people, reported cryptocurrency sales from 2013 through 2021, while outside surveys suggested that 12% to 21% of US adults owned crypto.
The gap implies that many holders never appear in the sales report.
The Joint Committee on Taxation estimated that digital asset reporting provisions would generate approximately $28 billion over the next decade. The IRS cites an internal study showing that up to 75% of taxpayers with digital assets are out of compliance.
The electronic delivery proposal is not about easing burdens. It’s about standardizing the infrastructure for automated compliance.
What retail users would notice
The user experience shifts from annual paper envelopes to persistent digital workflows. Tax season becomes a notification in the document center instead of a mailbox event.
For users accustomed to physical forms as reminders of their submissions, the shift creates new ways to miss deadlines.
Exchanges would integrate consent into onboarding or account settings, presented as routine platform terms. Email delivery depends on users maintaining current contact information and checking spam filters.
In-app document centers combine tax forms into notification flows that process trade confirmations, security alerts, and promotions. The seven-year retention requirement means that historical forms remain accessible, but only if users know to look for them.
Coinbase’s 2025 10-K reports 9.2 million monthly transaction users and $376 billion in assets on the platform. Other major fairs have a similar size.
If even a fraction of tax documents implement mandatory electronic consent, the volume of tax documents sent exclusively through digital channels will become significant.
Enforcement becomes more invisible
The crucial distinction: This proposal changes how customers receive forms, not whether the IRS receives them.
Real estate agents’ reporting to the government remains unchanged. An exchange that switches to app-only delivery still submits identical information to the IRS.
The IRS explicitly states that taxpayers must report digital asset transactions regardless of whether they receive Form 1099-DA. The agency emphasizes record keeping: Taxpayers must maintain their own basic information to calculate gains and losses, especially during the phase-in, when many forms do not include basic information.
For transactions in 2025, brokers generally report only gross revenues. Basic reporting will begin in 2026 for certain assets held with the same broker since the acquisition.
This creates a compliance gap where users require their own trade history export even if they receive a form. The electronic delivery proposal makes access to historical data more dependent on platform tools, such as document centers, CSV exports and API access, rather than mailed statements.
From an enforcement perspective, the shift is efficient. Information returns are submitted digitally to the tax authorities, regardless of the customer’s delivery method. Automated matching compares registrations to broker reports without manual intervention.
Users who miss app-based notifications will still face potential under-reporting notices, penalties and interest. The system becomes less visible to unwary users, while remaining fully visible to the IRS.
What happens next
The proposal is open for public comment through May 5, 2026. If finalized, it would apply to forms filed on or after January 1 of the calendar year following publication, meaning the earliest impact would be tax season 2027 or later.
Whether exchanges implement mandatory electronic delivery is a business decision. The proposal creates permission, not a mandate. Some brokers keep paper options as customer service, while others consider digital-only as operationally easier.
The adoption rate will determine how many users face the choice of ‘consent or lose access’.
Users should assume that electronic delivery will become standard on the major platforms as soon as it is permitted.
Treat exchange email settings as critical tax infrastructure. Please ensure that contact details are kept up to date. Enable document notifications. Please check spam filters before February 15, when forms are due. Download and backup trading history regularly, especially for multi-platform trades where no broker has complete basic information.
The broader context is the global convergence towards standardized crypto tax reporting.
The OECD Crypto-Asset Reporting Framework is being adopted in all jurisdictions. The EU’s DAC8 directive extends reporting to crypto assets. The US proposal for electronic delivery fits within a multi-year build-up in which crypto’s informality premium shrinks towards the information returns of traditional securities.
Crypto tax reporting isn’t disappearing into apps to make compliance lighter. It moves within the digital rails to make enforcement more automatic and harder to ignore.
The IRS doesn’t cut the paper trail. It leaves the trail from the mailbox to the platform, where broker copies still flow to the government, while customer copies become just one notification in a busy interface.