THE IRS (Internal Revenue Service) announced the postponement of the new tax reporting rules for crypto has January 1, 2026giving digital asset brokers more time to adapt to regulatory requirements. This delay represents a response to concerns about the current preparedness of centralized platforms to handle the new standards.
New tax rules for cryptos: IRS postponement
The regulations initially planned for 2025 aim to improve the tax transparency of crypto transactions. Brokers were supposed to determine and report the cost basis digital assets held and sold on their platforms.
The cost basis is a key element in calculating the gain or loss from the sale of crypto. In the absence of explicit investor choice, the default accounting method would have been FIFO (first in, first out)which considers the first unit purchased as the first sold.
The postponement to 2026 was motivated by the following reasons:
- Insufficient preparation of brokers: Many centralized platforms do not have the infrastructure to support specific identification methods, which would allow investors to select which units of crypto sell.
- Complexity of technical requirements: Implementing cost base calculation and reporting systems requires significant updates to technology platforms, with high development costs and lead times.
- Greater regulatory clarity: The postponement allows the IRS continue work on the rules, eliminating any regulatory ambiguity and simplifying the process for brokers and taxpayers.
Implications for brokers and investors
The delay offers advantages to both brokers and investors:
- For brokers: an additional year to develop systems to ensure compliance with the new tax requirements. This is especially important for platforms that do not yet have the technologies necessary to accurately track cost basis.
- For investors: more time to plan accounting strategies that optimize the tax treatment of crypto transactions. Investors can choose from alternative accounting methods (e.g. LIFO – Last-In, First Out), if supported by brokers.
In recent months, the IRS has introduced additional measures to strengthen tax regulations for crypto:
- June 2024: New tax regimes have been established for crypto transactions. Rules related to DeFi (decentralized finance) and non-custodial wallets have been temporarily postponed for further reviews.
- August 2024: The IRS released an updated version of the tax form 1099-DAsimplifying the declaration of crypto transactions and improving privacy, for example by removing wallet addresses and transaction identifiers.
- December 2024: Tax rules for DeFi brokers have been finalized, bringing them in line with traditional standards for assets. This change aims to make tax compliance easier for taxpayers.
What to expect for the future
The postponement of fiscal rules to 2026 does not reduce the importance of their compliance for investors and brokers of crypto.
With the IRS’s increasing focus on this sector, it is likely that additional measures will be introduced to ensure that digital transactions are fully traceable and taxed appropriately.
Investors are encouraged to closely monitor regulatory developments and consult tax advisors to prepare for upcoming changes. Meanwhile, brokers should take advantage of 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 crypto ecosystem, reducing tax evasion and harmonizing the processing of digital transactions with other financial instruments.
