The IRS has posted an early draft of updated Form 1099-DA, the form for brokers to use to report certain sale and exchange transactions of digital assets that take place beginning in calendar year 2025. Generally, brokers will send these forms to both taxpayers and the IRS in early 2026.

The new draft reflects the the final regulations for custodial broker reporting and includes the transitional relief described in Notice 2024-56, Notice 2024-57 and Revenue Procedure 2024-28. Those who are interested in commenting can send their comments using the forms and publications comments page.

“This new form will provide more clarity for taxpayers and give them another tool to help them accurately report their digital assets transactions,” said IRS Commissioner Danny Werfel. “We know third-party reporting greatly improves compliance with the nation’s tax law. This step will also help us make sure digital assets are not used to hide taxable income, including in high-income categories, while providing taxpayers who play by the rules more information to accurately report their income.”

“Digital assets greatly increase the complexity of our tax system, and the IRS continues to work to make improvements in this area as part of our larger efforts to transform the agency,” he added. “We will continue working this area to help ensure the tax laws are met while working to reduce burden wherever possible to help taxpayers in this challenging area.”

The IRS issued a news release at the end on June 28, announcing the final regulations on the reporting requirements for custodial brokers regarding digital assets, while informing the public that the agency would soon release an updated form.

The Journal of Accountancy reported that the IRS made a few changes to the form, including the removal of the boxes on the initial draft relating to wallet addresses and hashes. Brokers are still required to collect this information, but they are not required to include it on the form, said Miles Fuller, senior director of government solutions at TaxBit, a cryptocurrency tax software company, and a former attorney at the IRS. The box to designate broker type has also been removed.

"The initial draft released in April included this box with a reference to unhosted wallet providers," Fuller said in an email to the Journal. "However, Treasury's final regulations did not include rules for noncustodial brokers, and they will issue a separate set of rules in the future."

He also noted that the form's approach to asset identification in boxes 1a through 1c has not changed.