Current Rules

Under the current rules for furnishing payee statements electronically, which are based on the framework established for Form W-2 under IRC § 6051, a broker must obtain affirmative consent from a customer before sending a tax statement electronically. This framework guarantees customers several key rights, including the right to receive a paper copy of the statement if they do not consent and the right to withdraw their consent at any time, after which the broker must revert to providing paper statements.

The nature of digital asset trading, which is conducted almost exclusively online, means that some customers engage in an extremely high volume of transactions. According to the proposed regs, this could result in a single customer’s annual Form 1099-DA, Digital Asset Proceeds From Broker Transactions, being hundreds or even thousands of pages long. The associated costs and logistical burdens of printing and mailing such voluminous documents were cited as potentially unmanageable for brokers.

To dig deeper, visit the original article on the Thomson Reuters blog.