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The Internal Revenue Service has simplified the reporting requirements in the latest iteration of Form 1099-DA, which crypto brokers and taxpayers will use to report digital asset transactions. According to the Aug. 9 update, the new draft has removed several requirements that were part of the April version when the IRS first introduced the form.  Taxpayers are no longer required to provide information about wallet addresses and transaction IDs, along with the exact time of day for each transaction, requiring only the date. This revision comes in response to feedback from the cryptocurrency industry. In April, the IRS first unveiled the draft Form 1099-DA, which not only required detailed transaction information but also mandated that brokers disclose whether they were kiosk operators, digital asset payment processors, hosted wallet providers, unhosted wallet providers, or “others.” The draft was met with criticism, particularly for listing unhosted wallet providers as brokers. Critics pointed out that these providers do not have access to the nature of transactions or the identities of the parties involved. I don’t think crypto will be pseudo-anonymous or privacy-preserving anymore, at least in the US. Yesterday, the IRS issued the long-awaited draft Form 1099-DA, the first tax form specifically designed to collect your ID and detailed transaction data at scale from “brokers”.… pic.twitter.com/H4aTtm5fp9 — Shehan (@TheCryptoCPA) April 19, 2024 The latest update eliminates the requirement for taxpayers to specify the “broker type,” along with the other changes, to better align with the realities of the digital asset industry. The crypto community welcomed the change, with some calling it a step in the right direction. Attorney Drew Hinkes from the law firm K&L Gates described the updated form as “massively improved” because it requires “considerably less” data reporting.  The Blockchain Association, an industry advocacy group, had previously warned that the earlier…

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Filed under: News - @ August 11, 2024 4:16 am