The Internal Revenue Service (IRS) has announced a postponement of new cryptocurrency tax reporting requirements until January 2026, allowing digital asset brokers more time to set up necessary systems.
Background on Crypto Tax Reporting
The revised tax reporting regulations primarily focus on determining the cost basis for cryptocurrency assets held on centralized platforms. Under these guidelines, if investors do not specify their transaction accounting method, the IRS defaults to a First-In, First-Out (FIFO) approach, impacting overall tax liability, according to Crypto Briefing.
Addressing Industry Concerns
This delay addresses widespread concerns from tax professionals about the preparedness of digital asset brokers to implement these changes. Many brokers currently lack necessary infrastructure to support specific identification methods required for accurate tax reporting. Initially set for 2025, these requirements would mandate brokers to report the cost basis for sold crypto assets on centralized platforms.
Broader Implications for Crypto Taxation
In June, the IRS introduced a framework for taxing cryptocurrency transactions, including delays for decentralized finance (DeFi) and unhosted wallet rules. In August, a revised 1099-DA tax form excluded sensitive information, and in December, tax reporting rules for DeFi brokers aligned with traditional standards.
The IRS's decision to delay crypto tax reporting requirements to 2026 provides brokers and investors more time for preparation, playing a critical role in shaping the future of digital asset taxation in the U.S.
