- The IRS released new Form 1099-DA guidance requiring taxpayers to document purchase prices when broker reports are incomplete.
- Transactions before twenty twenty-six require independent taxpayer records to establish cost basis and avoid overtaxation.
- Accurate crypto documentation is critical for USCIS reviews regarding lawful source of funds and moral character assessments.
The IRS released new guidance on Form 1099-DA on August 10, 2026, directing digital-asset taxpayers to document purchase prices when broker reports do not show them. The form is the first information return specifically for digital-asset transactions.
For tax year 2025, filed in 2026, brokers generally had to report gross proceeds but did not have to report purchase basis. Some taxpayers therefore received forms with the Cost Basis box blank or showing $0.
That gap can make a sale appear fully taxable. Taxpayers must use their own records to establish what they paid and calculate the actual gain or loss.
Free toolSubstantial Presence Test CalculatorThe paperwork may also affect immigrants and investors whose tax filings intersect with immigration applications. USCIS updated its source-of-funds policy on April 24, 2026, while DHS issued an enforcement statement on May 11, 2026, after an indictment involving a multi-million-dollar crypto fraud scheme.
The new guidance separates older transactions from purchases covered by mandatory broker reporting. Records still matter.
Older transactions require a taxpayer-built paper trail
The 2025 reporting rules left brokers responsible for proceeds, not necessarily the taxpayer’s acquisition information. That means a blank or zero entry does not establish that the asset cost nothing.
A taxpayer should assemble evidence showing when the asset entered the portfolio, how much was paid, and how it moved between exchanges or wallets before sale. The relevant trail can include the initial fiat purchase, transfers, later sales and final disposal.
USCIS made that chain explicit in its April policy update. The agency said:
“USCIS’s fraud detection efforts are increasingly focused on complex financial trails. We will continue to target those who misrepresent the origin of their wealth, including digital assets, to obtain status they do not deserve. Investors must provide an unbroken chain of documentation from the initial fiat purchase to the final disposal.”
The statement addresses lawful source of funds in investment-based cases such as EB-5. It also gives investors a clear recordkeeping standard when digital assets form part of their financial history.
A transaction export alone may not explain every movement. Multiple wallets, decentralized-finance activity and transfers between platforms can leave missing links unless the taxpayer preserves supporting records.
The reporting rules change for purchases made in 2026
For transactions occurring on or after January 1, 2026, brokers must report both gross proceeds and purchase basis for covered securities. The rule applies to assets purchased on or after that date and held at the same broker.
| Transaction period | Broker reporting described in the guidance | What the taxpayer must verify |
|---|---|---|
| 2025 tax year, filed in 2026 | Gross proceeds generally reported; purchase basis not mandatory | Acquisition evidence and the resulting gain or loss |
| On or after January 1, 2026 | Gross proceeds and purchase basis reported for covered securities | Whether the asset qualifies as covered and whether the broker’s figures match personal records |
The new reporting does not eliminate reconciliation. A broker may not have the complete history when assets moved from another platform or wallet. The taxpayer remains responsible for checking the form against transaction records.
The guide identifies covered securities as assets purchased on or after January 1, 2026, and held at the same broker. That limitation makes transfer histories particularly important.
Exchange delays narrowed the filing window
Major exchanges, including Coinbase and Kraken, reported delays in early 2026. Some forms did not arrive until mid-March, leaving taxpayers a narrow period to compare broker data with their own records before the April deadline.
The timing creates a practical risk. Waiting for a form can leave too little time to reconstruct transactions, investigate missing entries or correct an incorrect figure before filing.
Taxpayers with several platforms should preserve records from each account rather than relying on a consolidated statement. Wallet addresses, transaction histories and evidence of fiat purchases can help connect an acquisition to a later disposal.
The same documentation can support a response if the tax authority questions the reported result. Keep the records organized by asset and transaction.
Mismatched figures can produce notices or an audit
Automated matching systems compare reported gains with broker-reported information. When the figures do not align, the taxpayer may receive a CP2000 notice or face a full audit.
A CP2000 notice is not itself a finding that every transaction was reported incorrectly. It signals a mismatch requiring a response supported by records.
Investors with DeFi activity or multiple wallets face a higher risk of overpaying if they cannot establish acquisition prices. Without that evidence, a taxpayer may report an amount that treats too much of the sale proceeds as profit.
The key records should show the movement from the initial fiat purchase through transfers and sales. Screenshots, exchange exports and wallet histories can be assembled into a transaction-by-transaction file.
Immigration filings add another reason to reconcile the numbers
USCIS has tied source-of-funds review to complex financial trails, including digital assets, in investment-based cases. Accurate tax reporting also matters to people seeking naturalization or permanent residency because discrepancies can affect good-moral-character reviews.
The guidance describes automated red flags when IRS data from the form conflicts with information in immigration filings. Investors should therefore review tax figures and immigration financial records together.
DHS used a separate enforcement statement to address illicit activity involving digital assets. The department said:
“The Department of Homeland Security remains resolute in ridding the state of drug-related and illicit crimes, including those utilizing digital assets to bypass federal oversight.”
That statement followed an indictment involving a multi-million-dollar crypto fraud scheme. It does not replace the tax documentation required for ordinary sales, but it underscores the federal attention given to digital-asset financial trails.
The form’s official information page and the 2026 instructions provide the reporting material. Investors in source-of-funds cases can also review the USCIS Policy Manual, while DHS maintains its Newsroom.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
