The IRS plans to allow cryptocurrency exchanges like Coinbase to submit tax forms electronically.

The U.S. Internal Revenue Service (IRS) proposed new rules on Thursday to allow cryptocurrency exchanges such as Coinbase and Kraken to submit tax forms electronically, such as the 1099-DA form reporting total revenue from digital asset trading, whereas previously exchanges were required to offer paper forms. Under the new tax filing system implemented this year, cryptocurrency exchanges are required to report total revenue and cost basis. The IRS will automatically obtain detailed profit and loss data, thereby strengthening compliance oversight of cryptocurrency holders. The new rules also allow exchanges to terminate business relationships with customers who refuse to receive tax forms electronically. The proposal has not yet been finalized and is currently open for public comment. It is understood that cryptocurrency tax software platforms such as CoinLedger have reported a significant increase in the number of IRS warning letters received by U.S. users, reminding them that cryptocurrency transactions may be subject to taxation and required reporting. (The Block)