IRS Releases Draft of 2025 Digital Asset Reporting Form for US Taxpayers
The United States Internal Revenue Service (IRS) has recently released a draft of Form 1099-DA for reporting income derived from digital asset transactions.
Titled “Digital Asset Proceeds from Broker Transactions,” the form is expected to be implemented in 2025 for reporting purposes in 2026.
Under the new regulations, brokers, including kiosk operators, digital asset payment processors, hosted wallet providers, and unhosted wallet providers, will be responsible for preparing Form 1099-DA for customers engaged in selling or exchanging digital assets.
Copies of the form will be sent to both customers and the IRS, enabling the tax authority to verify reported information.
The draft form requires the inclusion of token codes, wallet addresses, and blockchain transaction locations.
According to a rule proposed in August 2023, cryptocurrencies, non-fungible tokens (NFTs), and stablecoins will be subject to reporting.
The rule aims to enhance the IRS’s ability to identify taxpayers involved in digital asset transactions, which are often challenging to detect without third-party reporting.
Upon the announcement of the proposed reporting requirements, the crypto community expressed mixed reactions.
The Blockchain Association criticized the rule, citing “fundamental misunderstandings about the nature of digital assets and decentralized technology.”
Similarly, Coinbase’s chief legal officer, Paul Grewal, warned that the rules could establish a concerning precedent of financial surveillance, as nearly all digital asset transactions, even minor ones like purchasing a cup of coffee, would need to be reported.
Tax experts have also raised concerns regarding the new reporting rule.
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