This notice provides transitional relief from penalties for any broker who fails to timely and correctly file and furnish information returns and payee statements under section 6045 for sales of digital assets effected in calendar year 2025, if that broker makes a good faith effort to so file and furnish the information returns and payee statements accurately. This notice also provides transitional relief from backup withholding tax liability and associated penalties for any broker that fails to withhold and pay the backup withholding tax for certain sales effected in 2025 and 2026. This notice also provides transitional relief from penalties for brokers who fail to backup withhold and pay the full backup withholding tax due, if such failure is due to a decrease in the value of withheld digital assets in a sale of digital assets in return for different digital assets effected on or before December 31, 2026, and the broker immediately liquidates the withheld digital assets for cash. Finally, this notice sets forth when a broker may treat a customer as a U.S. digital asset broker, the sales effected for whom are exempt from information reporting from information, prior to the publication of a revised Form W-9, Request for Taxpayer Identification Number and Certification, providing for the certification of U.S. digital asset broker status.

This notice provides that brokers are not required under section 6045 to file information returns and furnish payee statements with respect to certain identified transactions and that the IRS will not impose penalties for failure to file correct information returns or failure to furnish correct payee statements with respect to these identified transactions. The identified transactions are described in the notice as: (1) Wrapping and unwrapping transactions; (2) Liquidity provider transactions; (3) Staking transactions; (4) transactions described by DA market participants as lending of DAs; (5) transactions described by DA market participants as short sales of DAs ; and (6) Notional principal contracts. The notice states that the inclusion of the described transactions in the notice does not constitute or reflect a substantive analysis for Federal income tax purposes of any of the identified transactions or their component steps, and no inference is intended as to how an identified transaction, or its component steps, is treated for substantive Federal income tax purposes. Additionally, the inclusion of the described transactions in the notice is not intended to create an inference that the identified transaction is or is not a sale of a digital asset or that it would be required to be reported under section 6045 but for this notice.

Section 10201 of Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly referred to as the Inflation Reduction Act of 2022, enacted section 4501 of the Internal Revenue Code. Section 4501 imposes a one percent excise tax on repurchases of stock of a publicly traded corporation. These final regulations under subpart B of part 58 contain procedural rules that provide further clarity regarding the reporting, payment, and other procedural obligations of corporations subject to section 4501.

Revocation of IRC 501(c)(3) Organizations for failure to meet the code section requirements. Contributions made to the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A).