The U.S. Internal Revenue Service (IRS) has introduced a revised draft of its crypto tax form, the 1099-DA, which will be used to report proceeds from certain digital asset transactions starting with the 2025 tax year. The update is part of a broader initiative to streamline tax reporting for crypto transactions.
Effective from 2026, crypto investors utilizing brokers primarily centralized exchanges such as Coinbase and Kraken will receive the 1099-DA form from these brokers. This form will document taxable events related to crypto sales and exchanges.
The updated 1099-DA, released on Friday, features several notable changes from the initial draft presented in April. Key modifications include the removal of fields for investors to record their wallet addresses and transaction IDs, which had previously raised privacy concerns. Additionally, the updated form no longer requires the time of transactions, only the date.
The original version of the form also included a section for filers to categorize their brokers as “kiosk operator,” “digital asset payment processor,” “hosted wallet provider,” “unhosted wallet provider,” or “other.” This section has been eliminated in the latest draft.
Crypto lawyer Drew Hinkes, a partner at K&L Gates in Miami, praised the updated form as “massively improved” and “less burdensome,” noting that it requires significantly less data reporting compared to its predecessor.
The release of this draft follows the IRS’s recent finalization of regulations concerning crypto broker reporting requirements. The IRS has indicated that it will address decentralized and non-custodial brokers in a separate set of regulations expected later this year.
IRS Office of Digital Asset Initiative Directors Raj Mukherjee and Seth Wilks emphasized that the new Form 1099-DA is designed to simplify the tax reporting process for digital assets. “This is an important step forward in digital asset information reporting and will bring more ease and clarity to that process,” they said in an emailed statement.
The public now has 30 days to submit comments on the proposed 1099-DA, providing an opportunity for stakeholders to offer feedback before the form is finalized.
