IRS Cracks Down on Crypto Tax Reporting with New Form Requirement

The Internal Revenue Service (IRS) has announced new reporting requirements for digital asset brokers in the US. Starting from January 1, 2025, brokers will be required to issue Form 1099-DA for crypto transactions, giving the IRS greater visibility into gross proceeds from broker-handled crypto activity.

A March study published in the Review of Accounting Studies estimated that only 32% to 56% of US taxpayers with crypto holdings currently report their transactions. This highlights underreporting risks and raises concerns about compliance.

Tax specialists say that digital asset taxation remains far more complex than traditional assets like stocks and bonds, partly due to the lack of automatic cost basis and holding period reporting in crypto.