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The U.S. Internal Revenue Service (IRS) has introduced Form 1099-DA, a tax reporting form dedicated to digital assets, activating a comprehensive regulatory monitoring system for cryptocurrency transactions.
According to cryptocurrency media outlet BeInCrypto, the IRS has officially launched Form 1099-DA, which requires digital asset brokers to report customers’ transaction details starting from trades conducted in 2025. As a result, major exchanges such as Coinbase and Kraken must issue the form to U.S. users, providing the IRS with a powerful channel to monitor individuals’ digital asset activities in near real time. The measure follows up on the Infrastructure Investment and Jobs Act passed in 2021 and reflects the government’s commitment to increasing transparency in the digital asset market and preventing tax evasion at its source.
Through Form 1099-DA, brokers must report not only the gross proceeds from digital asset sales but also detailed information such as transaction dates and asset types. Beginning with transactions in 2026, reporting of cost basis will become mandatory, making investors’ actual capital gains and losses clearly visible. Previously, reporting was conducted imperfectly through forms such as 1099-B, but the unification under a dedicated digital asset form is expected to significantly enhance the IRS’s data-matching accuracy.
The reporting requirement applies broadly, covering not only centralized exchanges but also digital asset payment processors and custodial wallet service providers. Transactions involving stablecoins and non-fungible tokens (NFTs) are also subject to reporting. Through these measures, the IRS is accelerating efforts to capture taxable income across the digital economy. Brokers must provide the relevant forms to customers by mid-February each year, after which the IRS will cross-check the information against taxpayers’ income tax filings to verify whether any taxable income has been omitted.
However, as the system is in its early stages, considerable confusion and growing pains persist in the field. Some major exchanges, including Coinbase, have announced delays in issuing the forms—from the usual February timeline to mid-March—due to technical challenges in building the new reporting infrastructure. Experts advise that investors who use multiple exchanges or transfer assets to personal wallets may receive incomplete data from brokers and should therefore maintain thorough records to substantiate accurate cost basis calculations on their own.
As the digital asset market becomes increasingly integrated into the institutional financial system, investors’ tax compliance obligations are growing heavier than ever. The introduction of Form 1099-DA by the IRS signals that digital assets can no longer remain in a regulatory gray area and is expected to significantly influence tax administration in other major economies worldwide. Under the IRS’s more sophisticated monitoring framework, investors now face the task of consulting tax professionals to ensure accurate reporting procedures and to prepare for potential audit risks.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The publisher is not responsible for any investment losses incurred based on this content.