Feb 11, 2026

The IRS Is About to See Every Crypto Transaction You Make: Here's What That Means for You

Approximately 75% of US crypto traders fail to report all their cryptocurrency income to the IRS.

If that's you, the window to fix this is closing fast.

With Form 1099-DA now in effect, U.S. exchanges report every sale, swap, and transfer you make to the IRS. Every single transaction. No minimum threshold. Every wallet address your exchange touched.

By 2027, at least 90 countries are expected to implement the Crypto Asset Reporting Framework (CARF) - which is an international equivalent to the 1099-DA.

Think you can hide on foreign exchanges? That escape route is about to slam shut.

Key Takeaways

Form 1099-DA is now in effect – U.S. exchanges report sales, exchanges, and transfers to the IRS
CARF kicks in 2027 – 90+ countries will require foreign exchanges to collect KYC and report your transactions
No minimum threshold – Even $1 transactions get reported
Wallet addresses are tracked – Transfer reports reveal which wallets you control
Criminal prosecution is easier than audits – The IRS is shifting to criminal indictments for non-compliance
They can go back 10 years – Look at the Roger Ver case

What Form 1099-DA Actually Does

Until now, the IRS has struggled to track your crypto trading.

That changed in January 2026 with the rollout of Form 1099-DA.

Every US-based centralized exchange will report three things to the IRS:

Every sale you make
Every exchange (crypto-to-crypto swap)
Every transfer in or out

No minimum threshold exists. Transfer $1 worth of Bitcoin, and it gets reported.

The transfer reporting is what matters most. The IRS will see exactly which wallet addresses you sent crypto to and which addresses sent crypto to you.

That's how they map your entire portfolio.

Why Foreign Exchanges Won’t Save You

Some traders think they can avoid 1099-DA reporting by using foreign exchanges. They're already planning their exit strategy, opening accounts on platforms with loose KYC, moving coins offshore, and staying under the radar.

It won't work.

The Crypto Asset Reporting Framework (CARF) launches in 2027. At least 90 countries have already signed on.

Here's what CARF will require:

Full KYC on every user
Tax residency verification
Tax ID numbers
Automatic reporting to home countries

Take Malta as an example. They're part of the EU and signed CARF. Binance is headquartered in Malta.

What the Roger Ver Case Teaches Us

Imagine federal agents showing up at your door with a 10-year-old transaction history printed out. Every wallet. Every transfer. Every coin you thought was private.

The Roger Ver indictment shows exactly what the IRS can do once they get your wallet addresses.

Once the IRS gets a few of your wallet addresses from exchange reports, they can:

Find your other addresses through blockchain tracing
Go back to prior years
Calculate whether you reported everything accurately
Build a criminal case if you didn't

Why Criminal Prosecution Is the New Normal

I've been warning about this shift for years. Now I'm watching it happen in real time. The IRS discovered something: criminal indictments are faster and easier than audits.

Why an audit is hard for the IRS	Why a criminal indictment is easy
Takes years to complete	Just prove you had income
Requires calculating exact gains	Just prove you didn’t report it
Requires calculating the exact tax owed	Just prove you knew what you were doing
Limited by statute of limitations (usually 3 years)	Can go back as far as they want (Roger Ver: 10 years)

Who Is Actually Safe Right Now?

Almost nobody who's been trading crypto for years is fully compliant. If you're reading this and your heart rate just spiked, you have a limited window to fix it. Get a crypto tax consultation now.

Key Questions About CARF and Form 1099-DA

What is Form 1099-DA and when does it start?

Form 1099-DA is a new IRS reporting form that requires US-based crypto exchanges to report all sales, exchanges, and transfers to the IRS. It starts in January 2026.

What is CARF and which countries are included?

The Crypto Asset Reporting Framework (CARF) is an international agreement that will require crypto exchanges to collect KYC information. At least 90 countries have signed on, including Malta and Singapore.

Do small transactions get reported under CARF and 1099-DA?

Yes. There is no de minimis threshold. Even if you transfer $1 worth of crypto, it gets reported. This is a major change from previous reporting rules.

Can the IRS really go back 10 years for crypto tax cases?

Yes. In criminal tax evasion cases, there is no statute of limitations the way there is for audits. The Roger Ver case shows the IRS can charge you for unreported crypto income from 10 years ago.