Trump Signs Crypto Reporting Repeal But Thorny Tax Issues Remain

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Since 2014, the IRS focus on the tax treatment and tax reporting issues for crypto has grown and become more intensity. The IRS has been forced to confront digital assets and has introduced a number of reporting requirements for holders, exchanges and others. Now, President Trump has taken a step off the required and looming reporting by signing H.J. Res. 25.
The new law repeals a set of regulations introduced by President Biden in 2024 that required decentralized finance brokers to report their gross proceeds from cryptocurrency sales to the IRS using a new variety of IRS Form 1099, the Form 1099-DA, “Digital Asset Proceeds From Broker Transactions.” The new form and requirements were controversial from the start, in part because the filing of this form would reveal the identity of the digital asset’s recipient to the IRS. Any Form 1099 reporting income—such as Form 1099-MISC and Form 1099-NEC—does just that, with the recipient’s Social Security Number so that the IRS computers can crosscheck against their tax returns.
Everyone must report their income, and that includes income from crypto transactions. However, many privacy-minded taxpayers are reluctant to disclose more information to the government. Some in the crypto community are particularly concerned about this issue. Brokers are still susceptible to an audit of their crypto sales, including via a John Doe Summons, which was widely used by the government with Coinbase, Kraken and other exchanges. The idea is to get account holder details from the exchanges directly.
A big advantage the government sought to reap from Form 1099 reporting is the ease with which reporting can be verified via computer matching. If amounts reported on Form 1099 don’t match amounts on tax returns, discrepancies can quickly be identified. The Congressional Joint Committee on Taxation estimated that the rollback of these regulations could add up to $3.9 billion to the federal deficit over ten years. It is possible that this long-discussed reporting requirement could be revisited in later administrations.
However, the bill was passed under the Congressional Review Act, which prevents the IRS from issuing a new, substantially similar rules to replace the repealed ones without first going through Congress. Until Congress moves away from its current deregulatory stance, it is unlikely we will see similar reporting requirements introduced.