US IRS rolls out first crypto reporting regime for taxation… “Tax filing confusion could worsen this year”

The US Internal Revenue Service (IRS) is introducing a new reporting regime for virtual asset (cryptocurrency) transactions starting this year. This has raised concerns that crypto-related tax filings for US investors could become even more complicated.

According to The Block on the 14th (Korea time), the IRS has begun implementing Form 1099-DA, which requires virtual asset brokers (transaction intermediaries) to report investors’ transaction histories starting this year. Under the new rule, crypto exchanges such as Coinbase and Kraken must report virtual asset transactions that occur in 2025 to both investors and the IRS.

However, because the data provided by exchanges under this regime is limited to “gross proceeds,” concerns have been raised that confusion could arise during the actual tax calculation process. Lawrence Zlatkin, Coinbase’s vice president of tax, explained that “Form 1099-DA reports only the gross proceeds of transactions and does not provide cost-basis information to the IRS,” adding that “taxpayers must obtain cost-basis data themselves and calculate gains and losses on their tax returns.”

The burden is expected to grow especially for investors who use a range of crypto infrastructure, including multiple exchanges and personal wallets. Shehan Chandrasekera, head of tax strategy at CoinTracker, said, “For investors using DeFi or moving between multiple wallets and exchanges, manually calculating taxes is virtually impossible.”

Some believe that because this is the first year of implementation, the likelihood of the IRS launching aggressive enforcement will be limited. Miles Fuller, director at TaxBit, said, “Since this is the first year the IRS will receive 1099-DA data, it will need time to process the new dataset,” adding that “it is unlikely that large-scale audits or warning letters will follow in the short term.”

Meanwhile, the crypto reporting framework is expected to become clearer starting with 2026 tax filings. Under IRS rules, for virtual assets acquired in exchange accounts on or after January 1, 2026, brokers will be required to report not only proceeds but also cost-basis information.