Sometime in February, a tax form you had never seen before likely showed up in your Coinbase, Kraken, or Gemini account. Form 1099-DA, the IRS’s new information return for digital-asset transactions, went out to customers for the first time this year, covering every cryptocurrency sale or exchange completed through a broker during 2025. A copy went to you. An identical copy went to the IRS.
For a large number of U.S. digital-asset holders, this is the first tax cycle where crypto proceeds are reported to the government the same way stock sales have been for decades. And because the April 15 filing deadline has already passed, anyone who filed without accounting for a 1099-DA, or who has not yet filed at all, is now working against the clock on either an amended return or a late filing.
How Form 1099-DA works in its debut year
The Treasury Department’s final regulations, published in 2024, require brokers to report gross proceeds from digital-asset sales and exchanges starting with calendar-year 2025 transactions. The IRS built Form 1099-DA for exactly this purpose. It works much like the familiar 1099-B used for stocks and bonds, and it follows the same furnishing deadline laid out in IRS Publication 1099: generally February 15, adjusted for weekends and holidays.
There is one critical limitation in this first cycle: the form reports only gross proceeds, not cost basis. Under the final regulations, cost-basis reporting begins with tax year 2026 transactions (with forms arriving in early 2027), using a universal basis method with transitional relief provisions for assets acquired before the new rules took effect. That gap means the IRS can see how much you received from each sale but cannot see what you originally paid. You are responsible for calculating and reporting your own basis, holding period, and resulting gain or loss on Schedule D and Form 8949.
Consider a straightforward example. If you sold $40,000 worth of Bitcoin through Coinbase last year, the IRS now holds a 1099-DA showing $40,000 in proceeds. If your return does not account for that $40,000 somewhere, the agency’s automated matching systems will flag the discrepancy. Whether you owe tax on $2,000 of gain or $38,000 of gain depends entirely on the basis records you maintain yourself.
The IRS matching engine and the role of AI
The IRS has run automated document-matching programs for decades. Every W-2, 1099-INT, and 1099-B flows through systems that compare reported amounts against what appears on individual returns. Form 1099-DA now enters that same pipeline.
The agency has also been expanding its use of artificial intelligence in tax administration. Its internal governance framework, outlined in IRM 10.24.1, defines what qualifies as an AI model and sets rules for handling sensitive taxpayer data. Some reporting has cited a figure of 125 AI models operating within IRS systems. No publicly available Treasury or IRS document reviewed for this article confirms that exact count or describes a matching engine built specifically for 1099-DA data. What the public record does show: the IRS is investing heavily in technology to close the so-called “tax gap” on digital assets, and the addition of 1099-DA data gives those systems a significant new input. Whether the number is 125 or some other figure, the direction is unmistakable.
Broker relief does not extend to individual filers
First-year rollouts are messy, and the IRS acknowledged as much. Under Notice 2024-56, the agency waived certain penalties for brokers that made a good-faith effort to file and furnish 1099-DA forms correctly and on time for 2025 transactions. That notice also postponed backup-withholding requirements on digital-asset proceeds. Subsequent guidance published in Internal Revenue Bulletin 2025-27, which contained additional notices and procedural updates related to digital-asset reporting, extended or adjusted several of those transitional provisions.
None of that relief applies to you as a taxpayer. The obligation to report every taxable crypto transaction on your return exists whether or not you receive a 1099-DA. The IRS has held this position for years: your reporting duty does not depend on receiving a form. If you traded on a platform that has not yet sent a 1099-DA, or if the form you received contains errors, you still owe accurate reporting based on your own records.
Where the blind spots are
Not every crypto transaction triggers a 1099-DA. The final regulations define which entities qualify as brokers, and that definition covers centralized exchanges and hosted-wallet platforms that facilitate trades for customers. It generally does not cover decentralized protocols, peer-to-peer marketplaces, or transactions conducted entirely through self-hosted wallets.
A separate rule finalized in late 2024 attempted to extend broker reporting requirements to decentralized finance (DeFi) front-end service providers. That rule drew immediate legal challenges from blockchain industry groups and faced a Congressional Review Act resolution aimed at overturning it. As of June 2026, the scope of DeFi reporting obligations remains unsettled, and most decentralized platforms are not issuing 1099-DAs.
That creates a patchwork. A taxpayer who traded on Coinbase and also swapped tokens through a decentralized exchange might receive a 1099-DA for the Coinbase trades but nothing for the DeFi activity. Both sets of transactions are taxable, but only one is visible to the IRS through the information-return system. The temptation to underreport the unreported side is obvious, and it is exactly the kind of gap the agency has signaled it intends to close.
Broker readiness is another variable. Exchanges that rely on third-party wallet integrations face challenges reconciling on-chain data across multiple blockchains and custodial arrangements. If that fragmentation produces a wave of corrected 1099-DA forms, taxpayers who already filed may need to amend their returns.
One more wrinkle worth noting: staking rewards, airdrops, and mining income are generally taxed as ordinary income when received, not as proceeds from a sale. Those events may not appear on a 1099-DA at all, but they are still reportable. Do not assume that the absence of a form means the absence of a tax obligation.
What to do now that the April deadline has passed
If you sold, exchanged, or otherwise disposed of cryptocurrency through a broker in 2025, here is where things stand in June 2026:
- Check for your 1099-DA. Log into every exchange or platform you used in 2025. Look for the form in your tax-documents section. If you never received one, contact the broker directly. Also check whether a corrected form has been issued since your original was sent.
- Reconstruct your cost basis. Since the form shows only proceeds, you need records of what you paid for each asset and when you acquired it. Pull transaction histories, purchase confirmations, and transfer records. If you moved crypto between wallets before selling, trace the chain of custody so you can identify the correct tax lot and holding period.
- Account for DeFi and non-broker activity. Any taxable event that did not go through a covered broker still belongs on your return. Token swaps, liquidity-pool withdrawals, and NFT sales all count.
- File or amend promptly if something is missing. If you have not yet filed your 2025 return, do so as soon as possible; penalties and interest accrue from the original due date. If you filed but left out 1099-DA proceeds, file Form 1040-X to correct the return before the IRS contacts you. Voluntary corrections are treated far more favorably than responses to enforcement notices.
- Talk to a tax professional if the numbers are large or complicated. The first year of any new reporting regime produces confusion. A CPA or enrolled agent experienced with digital assets can help you avoid costly mismatches, especially if you have activity spread across centralized and decentralized platforms.
The reporting gray zone for crypto is gone
For years, cryptocurrency occupied a peculiar space in the tax system. The IRS knew people were trading digital assets. It added a yes-or-no question about crypto to the front page of Form 1040 starting in 2019. It served John Doe summonses on exchanges like Coinbase and, more recently, Kraken, demanding customer records. But without systematic third-party reporting, enforcement depended heavily on voluntary compliance and one-off legal actions.
Form 1099-DA changes the math. It puts crypto proceeds into the same automated infrastructure that has driven compliance rates for wages and traditional investment income for decades. Research from the IRS and academic economists has consistently shown that tax compliance rises sharply when income is subject to third-party reporting. The “tax gap” for income categories covered by information returns is a fraction of the gap for income that is self-reported without any matching document.
If a broker reported your 2025 crypto proceeds to the IRS, the agency will eventually notice when your return does not match. Fixing the mismatch now, voluntarily, is far cheaper and simpler than responding to a CP2000 notice a year from now.
