Crypto exchanges now report to the IRS. Here is what that means for you.
Exchanges, brokers, and crypto payment platforms report your sales and trades to the IRS on Form 1099-DA, and the IRS matches those forms against your return. In the first years the forms often show proceeds with no cost basis, which can overstate your gain. If your records and the broker’s do not line up, the mismatch, not the trade, is what triggers the letter. Our attorneys and accountants reconcile the forms, fix prior years, and respond if the IRS has already written.