On August 8, 2024, the IRS released a new draft of Form 1099-DA, which will be used for reporting digital asset transactions starting in 2026. The updated form is designed to simplify the tax reporting process for crypto investors.
Simplified Reporting
The revised form makes several significant changes from the earlier draft that was shared in April. Taxpayers will no longer need to record the exact time of their transactions—just the date will be enough. The form also removes the need to provide information about the “broker type” and does not require details like wallet addresses or transaction IDs.
IRS Commissioner Danny Werfel explained that these updates aim to help taxpayers report their digital asset transactions more accurately. The changes reflect the IRS’s efforts to keep up with the growing use of digital assets and ensure that tax rules are followed correctly.
Attorney Drew Hinkes from K&L Gates praised the new form, calling it “massively improved” and “less burdensome.” He pointed out that the revised form requires less data reporting, making it easier to use. Ji Kim, Chief Legal and Policy Officer for the Crypto Council for Innovation, agreed with the changes, stating that they meet the needs of the industry.
The IRS is now asking for public comments on the draft form. There is a 30-day period for stakeholders to submit their feedback. This feedback process is part of the IRS’s broader effort to modernize its approach to the expanding digital economy and to make tax reporting for digital assets simpler and more efficient.
