IRS Crypto Reporting Rules Create Tax Headache for US Investors

IRS crypto reporting — New IRS reporting requirements for cryptocurrency brokers are creating significant confusion and administrative burdens for U.S. taxpayers during the 2025 tax filing season.

A survey by Awaken Tax found 21% of crypto investors were still waiting for necessary information from exchanges, while one in five reported their 1099-DA tax forms were incomplete or potentially inaccurate. For the 2025 tax year, brokers were required to report gross proceeds from sales but not the cost basis, forcing investors to calculate gains and losses themselves using often complex personal records.

Tax professionals report widespread discrepancies, with forms omitting trades or using inconsistent formats. Sharon Yip of Crypto Tax Advisors cited a case where a client’s 1099-DA showed less than $100,000 in stablecoin proceeds despite over $300,000 in trades. Delays in form issuance also compounded problems, with some exchanges like Kraken reportedly sending documents just two weeks before the April deadline.

The situation highlights a significant gap between the IRS’s visibility into crypto sales and taxpayers’ ability to accurately report their net gains, turning the new reporting regime into a logistical challenge for active traders and infrequent investors alike.