IRS enhances tracking of unreported crypto taxes

The IRS can now more easily track cryptocurrency investors' transactions, increasing the likelihood of detecting unreported tax filings. Starting with 2025 tax returns filed this year, crypto brokers must issue Form 1099-DA, which shows gross proceeds from investors' disposals, including sales and exchanges. This information will also be sent to the IRS, improving the agency's ability to identify discrepancies between reported figures and actual trading records. However, unlike stocks, crypto is not yet covered by a reporting system that requires brokers to report cost basis and holding periods. Consequently, investors must still manage their own transaction records, especially when assets are moved across multiple exchanges, private wallets, or involve staking, mining, airdrops, or DeFi transactions, complicating cost-basis calculations. A study published in the Review of Accounting Studies in March estimated that 32% to 56% of U.S. taxpayers holding crypto report their transactions to the federal government. Erin Collins, the IRS taxpayer advocate, noted that a significant portion of nonreporting appears to result from confusion over the rules or a lack of guidance rather than intent.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.