IRS tightens crackdown on unreported crypto taxes

The U.S. Internal Revenue Service is stepping up enforcement against unreported crypto taxes as it can now more easily track investors’ transactions than before, CNBC reported. Starting with 2025 tax returns filed this year, crypto brokers must issue Form 1099-DA showing gross proceeds from investor disposals such as sales and exchanges. As the same information is also sent to the IRS, discrepancies between what investors report and their actual transaction records are more likely to be detected. Unlike stocks, however, crypto still lacks a reporting system in which brokers disclose cost basis and holding periods. That makes it harder to determine acquisition costs when assets have moved across multiple exchanges and private wallets or involve staking, mining, airdrops, or DeFi transactions, leaving investors to organize their own records. According to a study published in Review of Accounting Studies in March, an estimated 32% to 56% of U.S. taxpayers who hold crypto report their transactions to the federal government. IRS National Taxpayer Advocate Erin Collins said much of the underreporting appears to stem not from intent, but from confusion over the rules or a lack of guidance.