Tax Tip #211

The IRS is on the hunt for taxpayers who sell, receive, trade, or otherwise deal in Bitcoin or other virtual currency or digital assets. Not reporting the sale of virtual currency, if it is large enough, could extend the time the IRS has to audit a tax return from the standard statute of limitations of 3 years to 6 years (refer to Tax Tip #88).

To combat the nonreporting in this area, the new IRS tax form 1099-DA will be provided to taxpayers in 2026 for calendar year 2025 to report digital asset sales. Calendar year 2024 will be the last year for taxpayers to self-report virtual currency transactions.