The IRS has signaled clearly that cryptocurrency tax enforcement is a multi-year, expanding priority. Understanding what is coming allows you to prepare — whether that means getting compliant before the enforcement wave hits, or positioning your current situation for the best possible resolution.

Broker Reporting (Form 1099-DA)

The Infrastructure Investment and Jobs Act requires cryptocurrency brokers to report transactions on Form 1099-DA — similar to how stock brokers report on Form 1099-B. Cost basis reporting, transaction details, and taxpayer identification will be transmitted directly to the IRS. This closes the information gap that allowed many crypto taxpayers to avoid reporting. Implementation has begun and will expand to cover more types of transactions.

DeFi and Wallet Reporting

Proposed regulations extend broker reporting requirements to DeFi platforms and potentially to self-custody wallets that interact with broker-like services. The scope of who qualifies as a "broker" continues to expand. While implementation details are still being finalized, the direction is clear: the IRS wants visibility into all crypto transactions, not just those on centralized exchanges.

Increased Audit Staffing

The IRS received significant funding increases directed at enforcement. A portion of this funding is allocated to cryptocurrency-specific examination and investigation. More examiners trained in crypto taxation, more criminal investigators with blockchain forensics skills, and more resources devoted to matching exchange data against filed returns.

Blockchain Analytics Expansion

IRS contracts with blockchain analytics firms continue to grow in scope and sophistication. Tools that once tracked only Bitcoin and Ethereum now cover dozens of blockchains, DeFi protocols, and cross-chain bridges. Privacy technologies are not immune — research into tracing transactions through mixers and privacy chains is ongoing.

What This Means for You

The window for voluntary correction is narrowing. Every month brings more enforcement capability and more data into the IRS's hands. If you have unreported crypto income, unfiled returns, or unresolved crypto tax debt, acting now produces dramatically better outcomes than waiting. Attorney Darrin T. Mish. Thirty-two years. Free consultation.