DeFi Tax urges regulators, policymakers, and journalists to closely examine the crypto tax software ecosystem. This all happens as the IRS prepares to start enforcing new 1099-DA rules. The 1099-DA form is about to be rolled out but involves the use of billions of taxpayer dollars. Yet worries are flying around about the precision and dependability of existing crypto tax reporting services.

DeFi Tax researchers undertook a comprehensive, multi-year study of the crypto tax reporting ecosystem. The researchers manually reviewed hundreds of transactions using raw blockchain data and IRS cost accounting rules from 2021 to 2024. What their investigation uncovered was shocking – widespread and systemic failure to protect the most vulnerable in our communities.

The IRS requires replacement 1099-B and new 1099-DA forms starting in 2025. Now, these platforms are gearing up to distribute billions of these documents. All of these forms are likely to be highly deficient, putting hardworking taxpayers at risk.

Third-party advocacy group DeFi Tax released a scathing report predicting disastrous outcomes for traders, investors and miners alike. Our analysis This report digs into that potential fallout as the IRS takes its first tentative steps to enforce the new 1099-DA regulations.

As noted by DeFi Tax, not one of the tested platforms was able to generate audit-ready reports every time with consistently accurate results. Janna Scott, Head of DeFi Tax, reiterated that “This is a huge problem.

"None of the platforms we reviewed could produce audit-ready reports with consistent accuracy." - Janna Scott

Our inquiry found that most of these solutions were already adjusting their algorithms based on the criticism. But even with these deregulatory tweaks, the changes didn’t address the underlying mistakes.

Users of exchanges will be sorely disappointed by the lack of support. And they will be met with no obvious ways to rectify it, as well as minimal issuer accountability, when they receive an incorrect 1099-DA. This would leave taxpayers completely at the mercy of billions of error-prone 1099-DA’s.

DeFi Tax provides the right solution, one that was made for transparency, security and accountability to tackle these challenges head on. The award-winning company wants to offer a trustworthy replacement in a world of misinformation.

Scott posted a message to users describing the issue. He stated that these shortcomings need to be fixed in order to safeguard taxpayers.