The IRS has finalized new rules that will transform digital asset taxation. Investors, founders, and professionals who act now will be prepared. Those who delay will face unnecessary risk.

The regulatory landscape for digital assets has shifted decisively. For years, crypto investors and companies operated in a space where tax rules were unclear and enforcement inconsistent. That era is ending. The IRS has issued final regulations that impose structured reporting requirements, and the days of casual compliance are over.

The first major development is the introduction of Form 1099-DA. Beginning January 1, 2025, brokers must report gross proceeds from digital asset sales. This brings crypto reporting closer to the standards long applied to stocks and securities. In 2026, the rules expand to require cost basis reporting, meaning the IRS will have both sides of the transaction. Without accurate records, taxpayers may find themselves exposed to tax on the full value of sales rather than just the gain.

Second, staking rewards are now clearly defined as taxable income when received. The IRS has confirmed that once a taxpayer has control over the tokens, the value must be recognized as ordinary income. This eliminates ambiguity and places the burden on taxpayers to track and report staking activity with precision.

Third, wallet-level cost basis tracking is no longer optional. Transfers between exchanges, self-custody, and complex DeFi activity create recordkeeping challenges. If basis cannot be substantiated, the IRS may default to treating assets as having zero basis, resulting in taxation on the entire amount received at disposition. Investors who fail to implement robust tracking systems will bear the cost of imprecision.

Finally, the digital asset disclosure question on the tax return is now universal. Any transaction involving the receipt, sale, or exchange of crypto requires a “Yes” response. The era of quietly ignoring smaller or more complex transactions has ended. Non-disclosure is a red flag and a clear compliance risk.

The implications are straightforward. The IRS is closing the reporting gap in digital assets, and enforcement will follow. Investors, founders, and companies that embrace this reality now will avoid future disputes, penalties, and unnecessary costs. Those who prepare early will also benefit from smoother fundraising and investor relations, as financial statements and compliance practices will withstand scrutiny.

Digital assets are no longer outside the reach of structured tax regulation. They are entering the same domain as equities, options, and cross-border investments, with all the complexity and reporting discipline that implies. The question is not whether compliance will be enforced, but whether participants in this space will be prepared when it is.