A survey of 1,000 US crypto investors conducted by Awaken Tax in August revealed significant concerns about the accuracy of 2025 crypto tax forms. According to the survey findings, 41% of respondents face missing or incomplete 1099-DA forms, with 21% still waiting for information from exchanges or crypto platforms. The findings are particularly concerning as this represents the first filing season for Form 1099-DA, which brokers use to report certain digital asset transactions to the Internal Revenue Service. Additionally, about 20% of respondents said their 1099-DA form information was incomplete, or they were unsure whether it accurately reflected their transactions. This season marks the inaugural implementation of the IRS's new reporting rules, with the extension deadline set for October 15.
The IRS requires brokers to report gross proceeds from covered 2025 transactions, showing what customers received in sales, but most forms do not include the original purchase price. As reported by the IRS, taxpayers must calculate their own cost basis and report digital asset income, gains, and losses even if no 1099-DA arrives. Chris Herbst, managing director of CountDeFi tax reporting, explained that gross proceeds can be many times an active trader's actual gain because the form counts each sale at full value without subtracting the asset's cost. For an active trader, gross proceeds reported can be several times higher than the actual gain, since every sale is listed without accounting for the original purchase price. The IRS also emphasized that even if taxpayers do not receive a 1099-DA, they must still report digital asset-related income and gains or losses. Taxpayers with extensions have until October 15 to file their federal returns, with any balance due generally payable by the original deadline.
Exchange forms are proving particularly difficult to reconcile with actual transactions due to the current reporting limitations. According to Crypto Tax Advisors founder Sharon Yip, her firm has found differences between clients' 1099-DAs and tax reports prepared from transaction histories. One client's exchange activity included more than $300,000 in stablecoin trades during 2025, while the exchange's 1099-DA listed less than $100,000 in total stablecoin proceeds. Andrew Duca from Awaken Tax noted that some customers received forms late in the filing season, with Kraken sending forms roughly two weeks before the April 15 tax deadline. Andrew Gordon, executive director of Digital Asset Tax Action, points out that missing or inconsistent documentation further increases complexity, particularly as some platforms utilize different reporting formats and may omit key data. It is very confusing for taxpayers to reconcile the 1099-DAs they receive with the crypto tax reports they must submit, given inconsistent and incomplete information across different exchanges and forms.
Crypto tax software faces significant compatibility challenges with the new form requirements. According to Digital Asset Tax Action executive director Andrew Gordon, most crypto tax software cannot import and reconcile the new form, while tools that can still require manual input due to brokers not supplying machine-readable 2025 forms. For active traders, this means entering hundreds of transactions. The IRS has mandated that basis reporting is mandatory for certain covered assets bought in custodial broker accounts after 2025 and held until sale, while reporting basis for noncovered assets remains voluntary. Starting in 2026, brokers will be required to report cost basis for eligible digital assets, which should improve the accuracy of tax forms. Gordon suggests brokers should accompany each form with a compatible digital file and maintain complete transaction histories, including acquisition details, fees, and transfers. Tax professionals recommend comparing 1099-DAs against complete personal records to ensure accuracy, as taxpayers should not rely solely on the figures in their 1099-DAs when filing.
Crypto tax recordkeeping has drawn attention in Congress, with House crypto tax legislation including a proposed exemption for certain network transaction fees of up to $10. During a House Ways and Means hearing, Coinbase tax executive Lawrence Zlatkin told lawmakers that calculating gains and losses on routine stablecoin payments and blockchain fees creates substantial compliance work. The IRS extension guidance gives taxpayers until October 15 to file their 2025 federal return, with any balance due generally payable by the original deadline. The congressional action suggests potential legislative relief for crypto taxpayers in future filing seasons. Looking ahead, brokers will need to begin reporting cost basis for covered digital assets starting in 2026, which is expected to help taxpayers calculate their gains and losses more effectively, although assets transferred from other platforms may still remain outside mandatory reporting requirements.
