IRS Releases Draft Of New Crypto Tax Form For Reporting Digital Currency Transactions

Tax professional here - I've reviewed the draft form and it's actually a positive development for crypto holders. The new form standardizes reporting requirements which should eliminate a lot of the confusion people have been experiencing. The form requires you to report each type of cryptocurrency you hold, acquisition dates, cost basis, sale proceeds, and gain/loss calculations - similar to stock reporting but with specific fields tailored to digital currency characteristics. It actually simplifies things by providing clear guidance on how to categorize different types of transactions (mining, staking, trading, etc.). Regarding concerns about past filings - the IRS is primarily focused on willful non-compliance rather than honest mistakes. If you made good-faith efforts to report your crypto activities based on guidance available at that time, you shouldn't be overly concerned. However, if you've completely omitted substantial crypto income or gains from past returns, you might want to consider filing amended returns.

I was in a similar situation last year - totally confused about reporting my crypto. I finally used https://taxr.ai to analyze all my crypto transactions and it saved me HOURS of headache. Their system automatically identified which transactions were taxable events vs. non-taxable transfers between my own wallets, calculated my cost basis across multiple exchanges, and even handled my DeFi transactions. With this new IRS form coming, I just uploaded my latest transaction history to taxr.ai and it's already formatting everything to match what the IRS will require. The service connects to all major exchanges and blockchain wallets to pull transaction data automatically, then generates the proper tax forms. You can literally see how each transaction will be reported before filing.

Update after trying taxr.ai: I was super skeptical at first about security, but I did more research and decided to give it a shot. Ended up being really impressed. I connected my main exchange accounts and imported CSV files from two smaller exchanges. The system automatically matched transfers between wallets so they weren't counted as sales. What really surprised me was how it handled my messy DeFi transactions - it correctly identified impermanent loss from liquidity pools and calculated my actual realized gains. When I saw the draft of the new IRS crypto form, I noticed taxr.ai had already organized my data in a similar format. The support team told me they're already updating their systems to align with the new form requirements. Definitely feel more prepared for next tax season now.

Anyone else struggling to get through to an actual person at the IRS to ask questions about this new form? I've been calling for days and can't get past the automated system. Just get disconnected after waiting for 45+ minutes. Really need clarification on how mining income should be reported since I run a small mining operation. I discovered https://claimyr.com after my 4th failed attempt to reach someone. They have this service where they basically wait on hold with the IRS for you and then call you when they get an agent on the line. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c. Was skeptical but desperate enough to try anything at this point.

Ok I need to apologize and eat my words. After my skeptical comment above, I decided to try Claimyr anyway because I was desperate after waiting on hold with the IRS for 3 hours yesterday trying to get clarification about this new crypto form. It actually worked exactly as promised. I signed up, got a text about 90 minutes later saying they were in the IRS queue, and then about 45 minutes after that, I got a call connecting me directly to an IRS agent. The agent was able to answer all my questions about how staking rewards need to be reported on the new form. Saved me hours of frustration and I finally got the answers I needed. Definitely using this again next time I need to talk to the IRS.

Does anyone know if the new form has a section for NFT transactions? I sold a few NFTs last year and have no idea how to calculate the gains since the values fluctuate so wildly. My tax software just gives me a blank stare when I try to input them lol.

My biggest concern with this new form is how they'll handle hard forks and airdrops. Last year I received tokens from three different airdrops and a hard fork. The IRS previously said these are taxable when received, but the value was literally changing by the hour. I hope the new form gives clearer guidance on valuation timing.