New Form 1099-DA will give the tax agency greater visibility into digital asset sales as gross-proceeds reporting begins in 2025, with cost-basis reporting for qualifying transactions scheduled to follow in 2026.
Crypto investors in the United States are facing closer tax scrutiny as the IRS begins requiring digital asset brokers to collect data for Form 1099-DA on transactions occurring on or after Jan. 1, 2025. The form will report gross proceeds from broker transactions, with many 2025 forms due by Feb. 17, 2026, a shift that could make crypto activity much easier for the federal government to detect. The reporting framework stems from the Infrastructure Investment and Jobs Act of 2021, with final Treasury and IRS regulations released in July 2024. The rollout is phased: brokers must report gross proceeds for 2025 transactions, while cost basis reporting will not become mandatory until qualifying 2026 transactions. That means taxpayers will still need to calculate and reconcile their own cost basis during the 2026 filing season. The change matters because the IRS has treated digital assets as property since Notice 2014-21, making every sale, swap or exchange a taxable event, while crypto tax compliance has lagged. A March research paper published in the Review of Accounting Studies estimated that only 32% to 56% of U.S. taxpayers with crypto holdings report their transactions. Erin Collins, the IRS' National Taxpayer Advocate, told Congress in June that many taxpayers may be out of compliance, often because of confusion and limited guidance rather than intentional evasion. Experts say the new system will make crypto oversight look more like traditional securities reporting because the IRS will be able to compare broker-reported proceeds with taxpayer filings. The IRS has indicated it will send reminders early in the year and offer penalty relief for brokers making good-faith efforts to report accurate figures for 2025 transactions, though that relief does not apply to individual taxpayers who underreport income. Decentralized brokers are currently exempt from the reporting requirement, but trades executed through decentralized platforms may still be taxable.