Form 1099-DA is live. Every centralized exchange is now reporting your transactions directly to the IRS. One mismatched figure can trigger an audit reaching back years.
Think of it as the W-2 for your exchange account — except it only tells half the story, and the IRS is holding you responsible for the rest.
Starting tax year 2025, every centralized exchange (Coinbase, Kraken, Gemini, and 40+ others) is required to issue Form 1099-DA reporting your gross proceeds directly to the IRS — the same way Schwab reports your stock sales.
1099-DA reports what you sold, not what you paid. It doesn't account for cost basis transferred from other wallets or exchanges, DeFi activity, staking income, or any off-exchange transactions.
The IRS will compare the proceeds on your 1099-DA against what you report on Form 8949. Any discrepancy — even a single dollar or an incorrect checkbox — can flag your return for audit.
When triggered, one of the audit forms now surfacing requests all wallet addresses and CEX accounts going back through your history, under penalty of perjury. This year's filing can open the door to every year prior.
The stakes are highest for anyone who has previously under-reported, but even fully compliant filers face complexity they may not be prepared for.
If you didn't report crypto gains in 2021, 2022, or 2023, the 1099-DA gives the IRS a baseline to compare against. The audit door is now open backward.
1099-DA doesn't capture on-chain swaps, liquidity pool activity, staking, airdrops, or NFT trades. If your 8949 doesn't account for these, your numbers won't add up.
Cost basis doesn't transfer when you move assets between exchanges. Without proper tracking, the IRS will see proceeds with zero basis — triggering phantom gains.
All withdrawals to personal wallets appear as "proceeds" on the 1099-DA. Without reconciling those addresses, your return will show massive unexplained gaps.
Margin liquidations, funding payments, and derivatives settlement create complex tax events that standard DIY software handles poorly — and the IRS knows what you traded.
TurboTax and CoinTracker are fine for 1–2 simple accounts. If you have real complexity, automated tools routinely produce 8949 forms that won't survive a 1099-DA reconciliation.
Now that exchanges are reporting directly, filing incorrectly this year creates a documented discrepancy the IRS can reference permanently. The window to clean up prior years correctly — before an audit forces the issue — is closing fast.
We built our process around one principle: you should never have to hand over your keys, login credentials, or seed phrases to file your taxes correctly.
We work exclusively with CSV exports from your exchanges and public wallet addresses. No credentials. No API keys. No custody — ever. Your assets stay yours throughout the entire process.
We reconcile every line of your 1099-DA against your actual transaction history. Your Form 8949 will match your 1099-DAs — precisely. No unexplained discrepancies, no audit triggers.
Our custom BittyTax-powered pipeline handles DeFi, multi-wallet, multi-exchange, staking, margin, and NFT activity — the edge cases that break every off-the-shelf tool.
Every report we produce is built to withstand IRS scrutiny. If you're ever audited, you'll have complete, organized documentation of every cost basis decision we made and why.
We've built custom import procedures for 40+ exchanges including Coinbase, Kraken, Gemini, Binance, Hyperliquid, and more. We know what their CSV exports miss — and how to fill the gaps.
From Maryland-based CPAs with traditional accounting backgrounds to crypto-native engineers, our team understands both the tax code and the technology. Sleep well knowing your taxes are right.
Priced by transaction volume, not by how stressed the IRS makes you feel. Every tier includes full 1099-DA reconciliation and Form 8949 preparation.
Up to 2 wallets / 250 transactions
Up to 4 wallets / 1,000 transactions
High-volume or complex portfolios
Not sure which tier you need? Book a free consultation — we'll scope it out with you at no charge.
Every day you wait is another day the IRS has your 1099-DA data and you don't have a matching return. Don't be the person who finds out too late.
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