As the digital asset tax landscape rapidly evolves, clarity is both urgent and elusive. In June 2025, a timely and insightful webinar brought together experts from KPMG, Ledgible, and Thomson Reuters to unpack what’s known, what’s changing, and where the industry needs to focus. The conversation was led by Philip Garlett, Managing Director of Information Reporting & Withholding Tax at KPMG US; Jessalyn Dean, VP of Tax Information Reporting at Ledgible; and Tomer Siegal, Sr. Product Manager for ONESOURCE Tax Information Reporting at Thomson Reuters.
Together, these industry leaders walked attendees through the complex regulatory environment shaping the future of digital asset reporting—and offered practical guidance for navigating what lies ahead.
🎥 This blog summarizes the insights shared in that session. To watch the full webinar recording, click here.
Navigating the July 2024 Regulations
Much of the current framework is anchored in the July 9, 2024 regulations, which were published in the Federal Register. These rules define new expectations for brokers dealing with digital assets—primarily focusing on entities that hold custody of assets being sold on behalf of customers. But, as the panel emphasized, the language also stretches to a broader concept: the “digital asset middleman.” This leaves space for interpretation and broad application.
The effective date for sales covered by these rules is January 1, 2025. To ease the industry into compliance, transitional relief was introduced, particularly around penalty enforcement and backup withholding. Meanwhile, cost basis reporting requirements won’t kick in until 2026, and only for assets acquired and held by the same broker from that point forward. As the panel explained, that nuance will require firms to not only upgrade systems but also pay close attention to asset acquisition dates.
Drawing the Lines: Scope and Exemptions
One of the most complex parts of the digital asset reporting environment is determining which transactions are in-scope and which are not. As discussed during the session, the July 2024 regulations cover a wide range of digital assets, including certain NFTs and stablecoins, as well as situations involving multiple brokers. However, large areas of activity—like decentralized finance (DeFi) platforms and non-U.S. brokers—remain temporarily excluded, or “reserved,” pending further rulemaking.
This ambiguity means that while institutions must prepare their infrastructure to handle broad reporting, there’s still considerable gray area. The speakers noted that certain transactions—such as staking, wrapping/unwrapping, and notional principal contracts—are specifically called out as not reportable at this time. Nonetheless, firms are required to collect and retain supporting data for seven years, even if that data isn't included on Form 1099-DA.
Political and Enforcement Context
The discussion also explored the broader political environment shaping these regulations. As Jessalyn Dean and Philip Garlett pointed out, the IRS’s internal capacity is in flux. A number of key personnel involved in digital asset regulation have resigned, and federal workforce reductions have cast doubt on enforcement consistency. Despite this, enforcement isn’t off the table—IRS audits continue, and the agency has invested in blockchain analytics tools to detect evasion and trace digital transactions.
Notably, the panel touched on the April 2025 Coinbase amicus brief, which raised serious questions about how blockchain surveillance intersects with constitutional protections. This brief urged the courts to clarify that the IRS cannot conduct broad, warrantless searches under the third-party doctrine, a legal issue that may further influence enforcement.
Industry Action: Preparing for Form 1099-DA
Despite regulatory uncertainties, one message was clear: the industry is not waiting around. Companies are moving swiftly to prepare for Form 1099-DA and the broader reporting obligations tied to digital assets. The speakers outlined how firms are conducting internal reviews to determine whether they fall under the broker definitions outlined in the regulations. This includes custodial brokers, processors of digital asset payments, and even decentralized operators that may be classified as non-custodial brokers.
The panel detailed how organizations are performing inventory assessments—categorizing digital assets, analyzing in-scope activities, and preparing for edge cases like tax-loss harvesting, charitable donations, and IRAs. Jessalyn Dean noted that documenting fair market value and capital cost allowance for these cases is particularly important, given their potential tax impact.
Infrastructure updates were also top of mind. Firms are implementing processes for collecting W-9 and W-8 forms, verifying TINs through the IRS TIN Matching Program, and reconciling data between internal systems and the IRS’s new Information Returns Intake System (IRIS), which has replaced FIRE for digital asset e-filing. Handling corrections, producing additional basis statements, and maintaining accurate audit trails for each digital asset type are all considered critical steps in building a compliant reporting pipeline.
The Global Picture: DAC8, CARF, and U.S. Considerations
Beyond U.S. borders, other jurisdictions are moving ahead with their own reporting frameworks. Philip Garlett and Tomer Siegal highlighted two major global initiatives: DAC8 in the European Union and the OECD’s Crypto-Asset Reporting Framework (CARF).
DAC8 brings crypto-assets into the EU’s Common Reporting Standard (CRS), but with limited tax enforcement capability. Meanwhile, CARF mandates that Reporting Crypto-Asset Service Providers (RCASPs)—including some DeFi platforms—share customer and transaction data with participating jurisdictions. These frameworks create potential overlap and ambiguity for U.S. firms, especially those with global operations.
While the U.S. signaled intent to participate in CARF in late 2023, rulemaking remains reserved, and the panel acknowledged that it’s unclear whether the current administration will follow through. For now, organizations are left balancing FATCA, CRS, and CARF obligations depending on their global footprint. This could become particularly important for Form 1042-S filings related to non-U.S. digital asset transactions.
The Road Ahead: Regulatory Uncertainty and Industry Resilience
In closing, the speakers emphasized that while regulations are becoming clearer, many uncertainties remain. The IRS has not yet released a mechanism for correcting Form 1099-DA filings, and the support infrastructure is still developing. The panel stressed that compliance efforts must continue—even in the face of ambiguity—because enforcement tools and audit activity remain very real.
Ultimately, the message was this: organizations that take early, thoughtful action will be far better positioned as the regulatory picture continues to evolve. Staying engaged with advisory groups, monitoring regulatory updates, and investing in flexible infrastructure are essential strategies for staying ahead.
Watch the Full Webinar Recording
To hear the full discussion and insights from KPMG, Ledgible, and Thomson Reuters, you can watch the recording here:
👉 Digital Asset Reporting Update – Summer 2025
