1099-DA & 2025: How the IRS Will Track Every Crypto Move You Make

Key Takeaways:

• 1099-DA reporting begins in January 2026, with detailed transaction-level data submitted to the IRS.
  
• Every swap, sale, and transfer will be reported, not just annual totals.
  
• Wallet addresses will be linked to your identity and could be traced using blockchain analysis.
  
• Now is the time to fix reporting issues before the IRS builds your complete activity profile. 

What Is the IRS 1099-DA and Why Does It Matter in 2025?

The 1099-DA is a new IRS information return that U.S. exchanges and brokerages will use to report digital asset transactions.

Starting in January 2026, it will capture:

That’s a huge leap from current reporting rules. Instead of only seeing annual totals, the IRS will see every trade, swap, or transfer you make on covered platforms. 📄 Official IRS Digital Assets Page

How Will the IRS Track Every Wallet You Use?

Once your exchange reports wallet addresses, the IRS could link them to other wallets you control using blockchain “subgraphing” analysis.

They look for patterns:

This isn’t theory, it’s exactly what the IRS did in the Roger Ver indictment to map his Bitcoin holdings. 

In another case, IRS Criminal Investigation agents traced $3.6 billion in stolen Bitcoin by following its flow across hundreds of wallets before seizing it.

When Will Exchanges Start Sending 1099-DA Forms?

The official implementation date is January 1, 2026. Forms will be issued for the 2025 tax year, meaning the first wave of data will reach the IRS in early 2026.

Even though the EU’s MiCA regulations and the OECD’s Crypto-Asset Reporting Framework (CARF) follow similar ideas, the U.S. 1099-DA is laser-focused on American taxpayers.

Can You Hide Crypto Activity Once 1099-DA Reporting Begins?

Short answer: No, at least not for long.

Even if you move assets off-exchange into a hardware wallet, once that address is linked to your identity, it could be traced. 

The IRS can map transactions across chains and between wallets, even for multiple coins.

A real example: In 2022, IRS Criminal Investigation agents worked with the DOJ to trace $3.6 billion in stolen Bitcoin from the 2016 Bitfinex hack. 

The funds had been moved through multiple wallets, converted into other digital assets, and routed through DeFi platforms in an attempt to obscure their origins, but blockchain analysis still led investigators back to the suspects.

These capabilities will only grow once exchanges start providing uniform, detailed data under 1099-DA rules.

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What Should You Do Now to Be Ready for the 1099-DA?

If your records aren’t complete or your cost basis is a mess, 2025 is the year to fix it.

• Rebuild your transaction history so your records match what the IRS will see.
• Set aside funds for taxes on gains from 2025 trades.
• Get professional help from a team that understands crypto tax law and IRS enforcement.
  
  

📖 Related: IRS 1099-DA Reporting Starts in 2026 — What Crypto Traders Must Report and Why It Matters

Frequently Asked Questions About Crypto Taxes

Q: What exactly will the 1099-DA report?
A: It will include transaction dates, amounts, asset types, and wallet addresses for your crypto activity on U.S. exchanges and brokerages.

Q: Can the IRS see my private wallet transactions?
A: Yes. Once an address is linked to you, blockchain analysis can reveal balances and movements across wallets, even without exchange involvement.

Q: How can CryptoTaxAudit help me prepare for 1099-DA reporting?
A: We specialize in crypto gain calculations, compliance, and IRS defense. Our team can fix past reporting, calculate your holdings accurately, and stand between you and the IRS if your numbers are challenged. Visit CryptoTaxAudit.com to get started.

Don’t Let the IRS Write Your Story for You

The IRS is about to get a complete map of your crypto activity. The smartest move you can make in 2025 is to take control before they do.

At CryptoTaxAudit, we:

• Rebuild your transaction history accurately.
• Make sure your reporting is IRS-proof.
  Defend you if the IRS challenges your numbers.
  
  

Don’t wait until a 1099-DA lands in your mailbox.
👉 Book your CryptoTaxAudit consultation now and step into 2026 fully protected.