What US Crypto Accountants Must Know for 2025

As the IRS tightens its regulations around digital asset reporting, crypto accountants and tax professionals are facing significant changes that will directly impact how they handle client accounts. Two key regulations—the IRS 1099-DA and Rev Proc 2024-28—will come into effect between 2025 and 2026, reshaping reporting responsibilities for custodial brokers, non-custodial brokers, and taxpayers.

In our recent webinar, Nik Fahrer, Director at Forvis Mazar and leader of its Digital Asset Tax Team, broke down these new rules and provided actionable steps that professionals in the crypto space need to take to ensure compliance.

Below, we highlight the critical points from the discussion. If you want to watch the full conversation click here.

---

IRS 1099-DA Reporting Requirements: What Brokers Must Do

The first major regulatory update is the introduction of the IRS 1099-DA form, which will require custodial brokers to report digital asset transactions starting in 2025. This rule applies to brokers who hold assets on behalf of users, including major crypto exchanges.

In this clip, Nik explains the 1099-DA reporting rules in detail, focusing on how brokers must classify covered securities—digital assets bought and held in custodial accounts after January 1, 2026. These covered securities require more detailed reporting, including information on gross proceeds and sale dates, making it crucial for accountants to understand their obligations now.

For more details on the IRS 1099-DA regulations, refer to the official IRS publication here.

Don’t miss out on expert insights from the full conversation—sign up now to watch Nik Fahrer share actionable steps about getting your business reporting in order before these latest crypto regulations kick in.

How 1099-DA Changes Crypto Tax Compliance

Crypto accountants in the U.S. must prepare for a major shift in tax reporting with the rollout of Form 1099-DA. Replacing the inconsistent use of 1099-B for digital assets, 1099-DA standardizes how brokers report crypto transactions, including proceeds, cost basis, and wallet transfers. This change will impact how firms reconcile crypto holdings and report capital gains. Accountants should stay ahead by understanding the new form’s requirements and ensuring their clients receive and review their 1099-DA statements for accurate filing.

---

Rev Proc 2024-28: Eliminating the Universal Cost Basis Method

Another critical change is Rev Proc 2024-28, which eliminates the widely-used universal method for calculating cost basis across wallets or accounts. Starting January 1, 2025, taxpayers must use an account-by-account or wallet-by-wallet method for tracking cost basis.

Nik outlines how this change will significantly increase the administrative burden on crypto accountants. Rev Proc 2024-28 means that brokers and taxpayers can no longer aggregate cost basis across multiple accounts but must instead track cost basis separately for each wallet.

This shift demands that accountants and crypto professionals act quickly to ensure they have the systems in place to comply by the January 1, 2025 deadline.

For a complete overview of Rev Proc 2024-28, refer to the official IRS guidance here.

---

Safe Harbor Transition: Last Chance for Compliance

Taxpayers have until December 31, 2024, to take advantage of a one-time safe harbor transition. This allows them to allocate their cost basis on a wallet-by-wallet basis before the new rules fully kick in. Missing this deadline could expose crypto professionals to audits and penalties if their records are not in line with the new requirements.

In this clip, Nik explains the urgency of using the safe harbor provision, which offers a critical opportunity for taxpayers to make necessary adjustments before the reporting rules tighten.

Failing to act by the end of 2024 could result in significant compliance risks, especially if crypto accountants haven’t transitioned to the new cost-basis tracking method.

---

What Happens After January 1, 2025?

After January 1, 2025, the IRS will begin enforcing the new cost basis tracking requirements under Rev Proc 2024-28. Non-compliance could lead to increased scrutiny, audits, and penalties, making it essential for accountants to have systems in place for accurate reporting.

The key to avoiding these issues is preparing now—crypto professionals should ensure they are fully compliant before the deadlines hit.

Nik explains how the January 1, 2025, deadline will affect digital asset accounting, and what steps accountants must take to avoid falling behind on compliance.

---

Act Now to Avoid Penalties

The IRS 1099-DA and Rev Proc 2024-28 bring sweeping changes to how digital assets must be reported, and crypto accountants cannot afford to delay their preparations. The new rules impose significant reporting obligations, especially for brokers and custodians, and the penalties for non-compliance could be steep.

If you’re a crypto professional, now is the time to act. Sign up for our full webinar to hear all of Nik Fahrer’s insights and ensure that you’re fully prepared for the 2025 regulatory changes.

Don’t let these deadlines catch you off guard—take control of your reporting practices today.

About the Speaker

Nik Fahrer is the leader of Forvis Mazars‘ Digital Asset Tax Team, specializing in cryptocurrency, NFTs, and digital asset tax regulations. He provides sophisticated income tax compliance, consulting, and planning services to multistate businesses and has deep expertise in navigating complex IRS regulations, including the 1099-DA reporting rules and Rev Proc 2024-28.

Nik is a licensed CPA in Colorado, Indiana, and Texas, and is a member of the American Institute of CPAs. He holds B.S. degrees in accounting and management information systems from the University of Evansville, Indiana. Nik is passionate about helping crypto professionals stay compliant in an ever-evolving regulatory landscape.