IRS Revamps Crypto Reporting Form
- PHPzOriginal
- 2024-08-11 06:34:29788browse
The U.S. Internal Revenue Service (IRS) has unveiled an updated Form 1099-DA for reporting digital asset transactions, introducing key changes that may address past criticism and privacy issues.
The U.S. Internal Revenue Service (IRS) has unveiled an updated Form 1099-DA for reporting digital asset transactions, introducing key changes that may address past criticism and privacy issues. This new version, reportedly set to be partially implemented in 2025, removes several contentious elements from earlier drafts.
IRS Revamps Crypto Reporting Form
On Aug. 8, 2024, the IRS rolled out the revised Form 1099-DA, marking another significant shift in how digital asset transactions will be reported to tax authorities. Starting with the 2025 tax year, this updated form will no longer require filers to include their crypto wallet addresses and transaction IDs.
This prior element sparked substantial privacy concerns voiced by the crypto community following the release of an initial draft in April 2024. The first draft of Form 1099-DA ignited controversy due to its extensive data collection requirements, which demanded not just transaction specifics but also wallet addresses linked to those transactions.
At the time, critics argued that such detailed reporting could expose digital asset holders to heightened security risks and threaten the pseudo-anonymity that many in the crypto space cherish. The inclusion of unhosted wallet providers among those required to report this information was especially alarming to privacy advocates.
The IRS’s latest revision also no longer requires crypto brokers to identify the type of brokerage they operate, making the reporting process smoother. While some have welcomed these changes, there is still skepticism about the overall impact of the new reporting requirements as the IRS continues to refine its approach to taxing digital assets.
The IRS has opened a 30-day public comment period on the latest draft of Form 1099-DA, indicating that further adjustments might be made before the final version is released. However, the timing for the form’s final release is still uncertain. The update cautions that Form 1099-DA is still a “draft” and taxpayers should not “file draft forms” or “rely on draft forms, instructions, and pubs for filing.”
What do you think about the IRS’s new digital currency tax form? Share your thoughts and opinions about this subject in the comments section below.
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