The U.S. Internal Revenue Service (IRS) has announced a major update to Form 1099-DA, the document used for reporting digital asset transactions. This revision introduces key changes aimed at addressing past criticisms and privacy concerns. The new form is scheduled for partial implementation starting with the 2025 tax year.
On August 8, 2024, the IRS unveiled the revised Form 1099-DA, reflecting a significant shift in how digital asset transactions will be reported. Notably, the updated form will no longer require filers to disclose their crypto wallet addresses and transaction IDs—elements that had previously raised substantial privacy concerns.
The initial draft released in April 2024 faced criticism for potentially exposing digital asset holders to security risks and undermining the pseudo-anonymity that many in the crypto community value.
Additionally, the revised form removes the requirement for crypto brokers to categorize their type of brokerage, streamlining the reporting process. While these changes have been met with some approval, there remains skepticism about the overall impact as the IRS continues to refine its approach to digital asset taxation.
The IRS has opened a 30-day public comment period for the latest draft of Form 1099-DA, indicating that further revisions may be made before the final version is issued. The timeline for the final release remains uncertain. The IRS has cautioned taxpayers that Form 1099-DA is still in “draft” status and advised against using or filing the draft forms for tax reporting purposes.
Raj Mukherjee and Seth Wilks, Directors of the IRS Office of Digital Asset Initiative, have highlighted that the new Form 1099-DA is designed to help taxpayers navigate the complexities of digital asset transactions. They noted that the form aligns with the recently released broker reporting regulations, aiming to provide a clearer and more manageable reporting process.
Crypto attorney Hink, a partner at K&L Gates, praised the update on X, describing the revised form as “massively improved, less burdensome, and requiring significantly less data reporting.” This perspective is shared by many in the crypto community, who view the IRS’s efforts as a step toward more streamlined tax reporting for digital assets.
Beginning in 2026, cryptocurrency investors working with brokers—primarily centralized exchanges like Coinbase and Kraken—will receive the updated 1099-DA form from these brokers. This represents a significant move towards more standardized reporting practices within the cryptocurrency industry.
