There’s been a lot of buzz lately around Form 1099-DA, and for good reason. The third-party filer deadline to furnish these forms has just passed, which means taxpayers who engaged in crypto and other digital asset transactions in 2025 should begin seeing these forms populate in IRS systems.
The cruel twist? Brokers aren't required to include a cost basis. For taxpayers and practitioners hoping these forms would simplify crypto reporting, that's a significant, and potentially costly, blind spot.
If you work with clients who have digital asset activity, now is the time to verify what the IRS is seeing and start marching quickly towards a solution on cost basis calculations.
Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is the IRS’s new information reporting form for certain digital asset transactions. It’s part of the broader regulatory push to increase transparency and compliance in the digital asset space.
Beginning this filing season, brokers are required to report qualifying digital asset transactions to both taxpayers and the IRS.
That means the IRS now has a clearer window into crypto activity, and mismatches are likely to trigger notices.
Taxpayers should expect Form 1099-DA to be available through the following means:
As with other 1099-series forms, the IRS receives a separate copy directly from the reporting broker and posts the information to a wage and income transcript. Even if a client doesn’t receive or forgets to provide their copy, the IRS version is what ultimately matters.
Hence, it’s highly recommended to pull client W&I transcripts on or shortly after March 30, particularly for clients with known digital asset activity.. Note, because the final deadline for electronic submission of Forms 1099-DA by the broker to the IRS is March 31, it may take some time for the forms to post to the transcript.
One major issue practitioners are already flagging: many 1099-DA forms do are not required to include cost basis information, and it is expected that most brokers will voluntarily omit such information.
That means:
That's easier said than done. Crypto investors frequently move assets across multiple wallets and exchanges, trade one token for another, and receive assets through airdrops or staking. Aside from the significant tracing exercise that may be required, if any exchange records are incomplete or lost, the IRS may treat the cost basis as zero, making the entire sale proceeds taxable."
Expect increased notice risk where substantial proceeds are reported, but no net gains are reported (similar to Sch C risk algorithms)
Note, for the 2026 tax year, basis reporting will be required, so this is potentially only a one-year hang-up.
Digital asset enforcement continues to evolve, and information reporting is the IRS’s primary compliance tool.
If 1099-DA forms are now flowing into IRS systems:
In short: if the IRS sees it, you should see it too.
With TaxNow, you can:
As digital asset reporting expands, visibility matters more than ever.
