the IRS The Internal Revenue Service announced the postponement of new tax reporting rules for encryption to January 1, 2026This gives digital asset brokers more time to adapt to regulatory requirements. This delay represents a response to concerns about the current readiness of centralized platforms to handle the new standards.
New financial rules for cryptocurrencies: IRS postponement
The regulations originally scheduled for 2025 are intended to improve tax transparency encryption Transactions. Mediators were supposed to identify and report Cost basis of digital assets that are held and sold on their platforms.
Cost basis is an essential element for calculating the profit or loss resulting from a sale encryption. In the absence of an explicit choice by investors, the default accounting method would have been the one that would have been followed FIFO (first in first out)in which the first unit purchased is considered the first unit sold.
The postponement to 2026 was motivated by the following reasons:
- Inadequate preparation of mediators: Many centralized platforms lack the infrastructure needed to support specific identification methods, which would allow investors to select units encryption For sale.
- Complexity of technical requirements: Implementing systems to calculate and report cost basis requires significant updates in technology platforms, with high development costs and time.
- Greater organizational clarity: Postponement is allowed IRS To continue working on the rules, address any regulatory ambiguities and simplify the process for brokers and taxpayers.
Implications for brokers and investors
Delay provides advantages for both brokers and investors:
- For brokers: An additional year to develop systems that ensure compliance with new tax requirements. This is especially important for platforms that do not yet have the technologies to accurately track cost basis.
- For investors: More time to plan accounting strategies that improve tax treatment encryption Transactions. Investors can choose from alternative accounting methods (e.g., LIFO – Last-In, First-Out), if they are supported by brokers.
In recent months, the IRS has introduced additional measures to strengthen tax regulation encryption:
- June 2024: New tax systems were created encryption Transactions. Rules regarding DeFi (decentralized finance) and non-custodial wallets have been temporarily postponed for further review.
- August 2024: The IRS has released an updated version of the tax form 1099-DAAnd simplify reporting encryption transactions and enhance privacy, for example by removing wallet addresses and transaction identifiers.
- December 2024: Tax rules for DeFi brokers have been finalized, in line with traditional asset standards. This change is intended to make tax compliance easier for taxpayers.
What to expect for the future
Postponing the financial rules to 2026 does not diminish the importance of compliance for investors and brokers encryption.
As the IRS becomes more interested in this sector, it is likely that more measures will be taken to ensure that digital transactions are fully traceable and taxed appropriately.
Investors are encouraged to closely monitor regulatory developments and consult their tax advisors to prepare for upcoming changes. Meanwhile, brokers should use the extra time to update their systems and ensure they are ready to comply with the new standards by 2026.
With these new rules, the IRS aims to build a more transparent and compliant system encryption ecosystem, reducing tax evasion and harmonizing digital transaction processing with other financial instruments.