Updated IRS transparency rules have alarmed American crypto investors. Now, tax regulations require exchanges to disclose client information.
The form titled "Income from Digital Assets from Brokerage Transactions" (1099-DA) will take effect for the 2026 tax year.
Brokerages will send this document to both the IRS and the taxpayer. It will account for transactions involving digital assets, including the amount invested and any profits or losses incurred.
All licensed U.S. crypto exchanges, such as Coinbase, are required to complete this form for each client.
Taxpayer Reactions
According to a survey by Awaken Tax of 1,000 crypto investors, most expressed concern over the drastic shift from self-reporting to automatic transaction reporting.
Andrew Duka, the company's founder, described the new tax rules as a "blunt instrument" created by lawmakers who know little about cryptocurrencies.
"This means that cryptocurrencies are treated like stocks, even though they are a different class of assets. Real crypto users move funds between multiple wallets and interact with DeFi protocols using quite complex trading strategies," Duka noted.
Platforms like Coinbase only provide information about sales income and cannot report the tax basis for specific digital assets, which typically includes the purchase price and acquisition costs.
Duka added that the responsibility for "filling in" the missing information falls on the holder through the updated Form 8949. Reddit users have already started sharing tips on how to better account for data from trading platforms.
"The document is poorly thought out and inconvenient for cryptocurrency users. But this is what they managed to do — faster and simpler," the Awaken Tax founder added.
It’s worth noting that in December 2025, American lawmakers introduced a proposal for taxing digital assets that considers small transactions with stablecoins and provides a grace period for staking.