IRS Introduces New Reporting System for Cryptocurrency Transactions

The IRS has introduced a new Form 1099-DA, which requires digital asset brokers to report cryptocurrency transaction proceeds to the agency. This enhanced reporting system will provide the IRS with a comprehensive record of every sale, including cost basis and wallet-specific information.

The implementation of this new system is causing delays for major exchanges, such as Coinbase and Kraken, which are struggling to distribute the forms on time. As a result, taxpayers have limited time to reconcile their trading records before the tax deadline, increasing the risk of mistakes and potential audits.