The Internal Revenue Service (IRS) has published an updated draft version of Form 1099-DA, a tax reporting document for cryptocurrency brokers and investors to report gains from certain transactions. This revision follows industry consultation and provides a 30-day public comment period.
Key Improvements in the Updated Form
IRS officials emphasized that the new crypto Form 1099 will bring "greater convenience and clarity" for taxpayers complying with U.S. cryptocurrency tax obligations.
Notable enhancements in the August 2024 draft include:
- Simplified structure compared to April's initial proposal
- Removed wallet address and transaction ID requirements (previously criticized as privacy-invasive)
- Streamlined time reporting (now requiring only transaction dates instead of timestamps)
👉 Crypto tax professionals are praising these changes as significantly reducing reporting burdens while maintaining compliance standards.
Industry Response
Drew Hinkes, Miami-based cryptocurrency attorney and partner at K&L Gates, noted on social media platform X:
"The revised form shows substantial improvement—it lightens the compliance load while dramatically reducing required data reporting."
Public Participation Process
Stakeholders may submit comments regarding:
- Implementation challenges
- Suggested refinements
- Technical considerations
- Burden estimates
👉 The full draft form and instructions are available through IRS.gov (Docket No. IRS-2024-0019).
Frequently Asked Questions
Q: When will Form 1099-DA become mandatory?
A: While currently in draft form, the IRS anticipates implementation for tax year 2025 filings.
Q: Who must file 1099-DA forms?
A: Cryptocurrency brokers and certain trading platforms—similar to stock brokerage 1099-B requirements.
Q: What transactions require 1099-DA reporting?
A: The form covers crypto-to-fiat conversions and potentially crypto-to-crypto trades, though final scope remains subject to IRS clarification.
Q: How does this affect individual taxpayers?
A: Most cryptocurrency investors will receive these forms from their exchanges/brokers rather than completing them directly.
The IRS continues refining cryptocurrency tax guidance as digital asset adoption grows. This draft represents their most taxpayer-friendly approach yet, balancing compliance needs with practical implementation concerns.