# IRS broker reporting

> IRS broker reporting (US Internal Revenue Service): Tax · live at the custodial perimeter, dead beyond it. Region: Americas. Restricts anonymity: Anonymity-enhancing assets or unattributed transfers are barred outright, or barred for regulated firms.

Part of the Soda Labs Privacy Hub regulation map, which reads the instruments
themselves rather than summarising the summaries: https://www.sodalabs.xyz/privacy-hub/regulation

## Key facts

- Entry type: Regulator or standard-setter
- Region: Americas
- Subject: Tax · live at the custodial perimeter, dead beyond it
- Authority: US Internal Revenue Service
- Stance on on-chain confidentiality: Restricts anonymity. Anonymity-enhancing assets or unattributed transfers are barred outright, or barred for regulated firms.
- Tags: 1099-DA, broker reporting, DeFi rule repealed, Section 6050I pending
- Canonical page: https://www.sodalabs.xyz/privacy-hub/regulation/reg-irs-broker-reporting

## What it actually says

The clearest illustration of the US perimeter split. Custodial reporting arrived exactly as planned and is now in its first year of cost-basis reporting, which means identity, proceeds and acquisition history all flow to the tax authority for anyone using an intermediary. The attempt to extend the same duty to non-custodial software went the other way entirely: Congress nullified the DeFi broker rule by joint resolution in April 2025, and because it used the Congressional Review Act, no substantially similar rule can be issued without fresh legislation. That is a stronger form of repeal than a withdrawal, and it is the single most durable win for non-custodial software in US law so far.

## The instruments that matter

- **Form 1099-DA**: custodial brokers report customer identity and gross proceeds; the regime went live on schedule with 2025-transaction forms filed in early 2026, and basis reporting began for 2026 transactions
- **The DeFi rule was repealed**: the trading front-end broker rule was nullified by joint resolution enacted 10 April 2025, and the Congressional Review Act now bars any substantially similar rule without new legislation
- **Current IRS position**: the final regulations do not include reporting requirements for brokers commonly known as decentralized or non-custodial brokers
- **Section 6050I still unimplemented**: the reporting of digital assets received in a trade or business, where officials have acknowledged concerns that it may reveal personal information the IRS would not otherwise have

## Sources

- [IRS digital assets](https://www.irs.gov/filing/digital-assets)
- [Public Law 119-5, repealing the DeFi broker rule](https://www.govinfo.gov/content/pkg/PLAW-119publ5/html/PLAW-119publ5.htm)

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