- The IRS is increasing enforcement against crypto investors who are not properly reporting digital asset activity.
- New IRS guidance and forms clearly outline tax reporting requirements for cryptocurrency transactions starting from 2024.
- The upcoming Form 1099-DA will not include cost basis for crypto assets in the 2025 tax year, leading to potential overreporting of gains.
- Many taxpayers and CPAs lack systems to track and report correct crypto cost basis and income, risking higher taxation or audits.
- The IRS has started sending compliance letters to many crypto holders, signaling a crackdown on past tax evasion.
The Internal Revenue Service (IRS) is launching new compliance actions targeting taxpayers involved with cryptocurrency. A change in reporting requirements, introduced in Revenue Procedure 2024-28, now provides clear directives for individuals who buy, sell, or transfer digital assets in the United States.
Officials state that this new guidance establishes safe harbors—allowances for taxpayers to correct past reporting—while clearly setting expectations for future filings. The IRS is also rolling out the new Form 1099-DA for the 2025 tax year, which is intended to capture all crypto asset sales on exchanges. Crypto tax professionals have reported a spike in compliance letters, including 6174, 6174-A, and 6173 notices, urging taxpayers to get compliant or face penalties.
According to the article, the new Form 1099-DA will not include the original “cost basis”—the price paid for an asset—for the 2025 tax year. Instead, exchanges will default to reporting a $0 cost basis when the purchase price is unknown. This could result in the IRS viewing all revenue from crypto sales as straight gain, possibly increasing tax liability if taxpayers do not have their own records. “Say you buy 1 ETH for $2,200, move it to Coinbase, and sell it for $2,500. If Coinbase doesn’t have the cost basis, the form shows a $2,500 gain. Your actual gain was $300 — but unless you’ve tracked that basis yourself, the IRS won’t know. And they’ll assume the worst,” the article explains.
The IRS has sent out a high volume of compliance notices to crypto holders in recent weeks, a time normally considered slow for such actions. Crypto tax firms across the industry confirm that these enforcement steps are the result of widespread underreporting and confusion about digital asset tax rules over the last decade.
The new approach is expected to impact hundreds of thousands of Americans. Many CPAs and taxpayers struggle with the complexity of tracking crypto transactions, differentiating transfers from sales, and properly reporting staking rewards or DeFi activity. The IRS has made it clear that previous defenses—such as unclear guidance—will no longer be accepted. Error-prone reporting, missing cost basis information, and inaccurate income tracking could all result in excess tax owed or trigger audits in the upcoming tax years.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Sonic Launches Creator Program With 100,000 S Monthly Rewards
- LetsBonk Overtakes Pump.fun as Solana’s Top Memecoin Launcher
- BBVA Launches Crypto Trading for Retail Customers in Spain
- HMRC warns crypto holders of new tax reporting rules for 2026
- MicroStrategy STRF Order Delay Rumor False, Fueled by Social Media
