The Internal Revenue Service (IRS) is tightening oversight of the U.S. cryptocurrency market with the rollout of a new reporting form — Form 1099-DA.
Beginning in 2025, all crypto brokers and exchanges will be required to issue Form 1099-DA to customers and file copies with the IRS. The form will report gross proceeds from the sale or exchange of digital assets, similar to how Form 1099-B is used for securities transactions.
From 2026, reporting obligations will expand to include cost basis information, allowing the IRS to track not only proceeds but also calculate capital gains and losses. This is expected to eliminate major blind spots in crypto tax compliance and reduce opportunities for underreporting.
Regulators believe the new framework will provide more clarity for taxpayers, ensure consistent treatment of crypto transactions, and bring the digital asset sector closer to traditional financial markets in terms of compliance standards.
Implications:
- For investors: Taxpayers will need to ensure all digital asset trades are tracked accurately to avoid discrepancies when the IRS matches filings.
- For platforms: Exchanges, wallets, and brokers will face increased administrative and compliance costs as they adapt their infrastructure to support new reporting rules.
- For the market: The move underscores the government’s broader push to regulate digital assets under existing financial and tax laws.
As digital assets become more mainstream, tax authorities worldwide are adopting similar measures to ensure proper revenue collection and improve transparency. The U.S. approach could set a global standard for crypto taxation.
