According to Techub News, as reported by The Block, the IRS has finalized tax regulations requiring 'DeFi brokers' to collect user transaction information.
The U.S. Department of the Treasury stated on Friday that under updated regulations, 'DeFi brokers' will be required to collect user transaction information and send them 1099 forms, just like traditional brokers handling securities. Brokers must send these 1099 forms to clients for reporting income that is typically not derived from employers. 'These regulations will help ensure that all taxpayers follow the same set of rules and have the information needed for accurate tax reporting,' said Aviva Aron-Dine, the Deputy Assistant Secretary for Tax Policy, in a statement. 'Aligning the tax reporting requirements for digital assets with those for other assets will make tax reporting easier and cheaper for compliant taxpayers while also helping to narrow the tax gap.'
The Ministry of Finance pointed out that the finalized rules apply to 'front-end service providers' that 'interact directly with customers', meaning entities operating the main websites used to access decentralized protocols, rather than the protocols themselves. According to the submitted documents, the rules are expected to take effect on or after January 1, 2027.