Updates on IRS Crypto Taxation Form 1099-DA

The United States Internal Revenue Service (IRS) has revised the draft of its crypto taxation form 1099-DA intended for crypto brokerage accounts.

As a refresher, this form will begin to be utilized by ‘brokers’ starting in 2025 to report digital asset transactions to customers. Ji Kim, Head of Global Policy, Digital Assets, and General Counsel at the Crypto Council for Innovation, noted on the social media platform X that the initial review of the draft form indicates significant changes, such as the removal of wallet addresses, transaction IDs, and time acquired. These elements are considered important.

Form 1099-DA is designed to track “digital asset proceeds from broker transactions” and is expected to take effect at least partially in 2025, according to the revised draft released on August 8.

The IRS, together with the U.S. Department of the Treasury, had proposed this crypto brokerage taxation form back in August 2023. The early drafts required filers to include a digital wallet address and indicate if assets are classified as a “non-covered security.” However, privacy concerns from industry members and the potential impact on decentralized finance have been raised regarding these taxation reporting requirements.