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Biden administration unveils new crypto tax reporting rules

Bitcoins are seen in this illustration picture

Bitcoins are seen in this illustration picture taken September 27, 2017. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

Aug 25 (Reuters) - Cryptocurrency brokers, including exchanges and payment processors, would have to report new information on users' sales and exchanges of digital assets to the Internal Revenue Service (IRS) under a proposed U.S. Treasury Department rule published on Friday.

The rule is part of a broader push by Congress and regulatory authorities to crack down on crypto users who may be failing to pay their taxes.

A proposed new tax reporting form called Form 1099-DA is meant to help taxpayers determine if they owe taxes, and would help crypto users avoid having to make complicated calculations to determine their gains, the Treasury Department said.

It would also subject digital asset brokers to the same information reporting rules as brokers for other financial instruments, such as bonds and stocks, Treasury said.

Under the proposal, the definition of a "broker" would include both centralized and decentralized digital asset trading platforms, crypto payment processors and certain online wallets where users store digital assets. The rule would cover cryptocurrencies, like bitcoin and ether, as well as non-fungible tokens.

Brokers would need to send the forms to both the IRS and digital asset holders to assist with their tax preparation.