Sherman Reacts to Biden Admin Crypto Tax Reporting Rule Proposals

WASHINGTON, DC -- The Biden administration proposed new rules for cryptocurrency brokers as Congress and regulatory agencies are looking to crack down on crypto tax evasion. The new rules would requirecryptocurrency brokersto report information on digital asset sales and exchanges to the Internal Revenue Services (IRS) and taxpayers.

"Cryptocurrency means 'hidden money' - its goal is right there in the name," said Sherman in reaction to the propsed new rules. "Pleased to see the U.S. Treasury Department propose rules today that require crypto platforms to report its customers transactions to the IRS - a measure Rep. Stephen Lynch and I urged for earlier this summer."

"This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays by the same set of rules," the Treasury Department said in a statement.

A provision in the 2021 Infrastructure Investment and Jobs Act required additional tax reporting requirements for digital asset brokers, as well as clarification on the types of firms that qualify as crypto brokers.

Under the proposed rule, the term "broker" includes digital asset trading platforms, payment processors and certain wallet providers.

Crypto brokers would be required to provide a new Form 1099-DA to the IRS and digital asset holders to assist with tax preparation starting in 2026 — covering 2025 sales and exchanges.