The latest announcement from the U.S. Internal Revenue Service (IRS) states that the draft tax law on digital asset transactions (Form 1099-DA) has been updated and will no longer require taxpayers to provide details such as wallet addresses, transaction IDs, and transaction times. It is expected to be Implementation begins in tax year 2026.
(The U.S. Internal Revenue Service announces a new cryptocurrency tax system: it will take effect in 2025, and DEX and wallet vendors will not be involved for now)
IRS updates Form 1099-DA: No need to report wallet address and TxID
The IRS recently launched a revised Form 1099-DA, which has made major adjustments in response to past controversies about huge compliance costs and privacy concerns. It is expected that taxpayers will be required to report their tax returns starting in 2025 in the 2026 tax year. Digital asset trading information.
Specifically, the main changes include:
Eliminate the “type and specific scope of brokers” that require taxpayers (usually cryptocurrency brokers) to operate digital asset transactions.
Removal requires reporting the exact time a transaction occurred, providing only the date.
Reporting of wallet addresses and transaction IDs (TxIDs) is no longer required.
Previously, the old version of the draft was criticized as being too strict, requiring filers to report the wallet address and accurate transaction time of each transaction in a form, causing a burden on the public and exposing financial risks:
The privacy of wallet information is crucial to users and taxpayers entrusted with handling this information, which will increase the risk of this information being stolen by interested parties other than the government and taxpayers.
IRS: Will improve filing clarity and reduce burdens
IRS Commissioner Danny Werfel wrote in a statement that the updated forms will increase filing clarity and reduce burden for taxpayers:
Third-party reporting will improve compliance, and this step will help us ensure that digital assets are not used to hide or avoid taxable income among high-income groups.
He also said frankly, "Digital assets have greatly increased the complexity and difficulty of our tax system, but as part of our organizational transformation, we will continue to improve the tax system in this field."
It is reported that the IRS has opened a 30-day public comment period for the latest changes to the 1099-DA form, which means further adjustments may be made before the final version is released, and the time for the final version has not yet been determined:
This form is still a "draft" and taxpayers should not rely on the currently released Form 1099-DA examples for announcements, clarifications, or filings.
DEX and self-hosted wallets still await the introduction of special laws
In this regard, industry insiders generally believe that the new draft version is much improved compared to the versions in August last year, April and July this year. By significantly reducing the amount of information that needs to be reported, compliance costs for filers and review agencies are reduced.
Ji Kim, Chief of Legal Policy at the Council for Crypto Innovation (CCI), also emphasized:
Although we are still taking a closer look at the contents of the updated form, these changes appear to be welcome and are the result of joint advocacy by CCI and the industry.
Chain News previously reported that decentralized exchanges (DEX), self-hosted wallets, and decentralized network facility operators are currently not within the scope of the law, and taxation remains to be implemented in other special laws in the future.
This article IRS Crypto Tax Draft Update: No need to report wallet address, transaction ID and specific time first appeared on Chain News ABMedia.
