The IRS postpones tax rules for crypto to 2026: what changes for brokers and investors

The IRS (Internal Revenue Service) has announced the postponement of the new tax reporting rules for crypto to January 1, 2026, giving digital asset brokers more time to adapt to regulatory requirements. This delay represents a response to concerns about the current readiness of centralized platforms in handling the new standards.

New fiscal rules for crypto: the postponement of the IRS

The regulations originally planned for 2025 aim to improve tax transparency for crypto transactions. Brokers were supposed to determine and report the cost basis of digital assets held and sold on their platforms.

The cost basis is a key element for calculating the gain or loss resulting from the sale of crypto.

In the absence of an explicit choice by investors, 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:

1. Insufficient preparation of brokers: Many centralized platforms lack the infrastructure to support specific identification methods, which would allow investors to select which units of crypto to sell.
2. Complexity of technical requirements: Implementing systems to calculate and report the cost basis requires significant updates in technological platforms, with high development costs and time.
3. Greater regulatory clarity: The postponement allows the IRS to further work on the rules, addressing any regulatory ambiguities 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 that ensure compliance with the new tax requirements. This is particularly important for platforms that do not yet have the necessary technologies to accurately track the cost basis.

• For investors: more time to plan accounting strategies that optimize the tax treatment of crypto transactions. Investors can choose among 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 the tax regulation of crypto:

• June 2024: New tax regimes have been established for crypto transactions. The rules related to DeFi (decentralized finance) and non-custodial wallets have been temporarily postponed for further reviews.
• August 2024: The IRS has released an updated version of the tax form 1099-DA, simplifying the reporting of crypto transactions and enhancing privacy, for example by removing wallet addresses and transaction IDs.
• December 2024: The tax rules for DeFi brokers have been finalized, aligning them 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 compliance for investors and brokers of crypto.
With the growing attention of the IRS towards the sector, it is likely that further 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 the 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 crypto ecosystem, reducing tax evasion and harmonizing the treatment of digital transactions with other financial instruments.