Everything brokers, exchanges, custodians, and payment processors need to know about filing Form 1099-DA through IRIS — who must file, the phased reporting timeline, covered vs. noncovered securities, de minimis exceptions, XML structure, field reference, and how to avoid the errors that cause most rejections.
Form 1099-DA — “Digital Asset Proceeds From Broker Transactions” — is the IRS’s information return for reporting the sale, exchange, or disposition of digital assets. It was mandated by the Infrastructure Investment and Jobs Act of 2021 and finalized through regulations under IRC § 6045.
Beginning with transactions effected on or after January 1, 2025, brokers must report gross proceeds from digital asset sales. Starting with transactions on or after January 1, 2026, the framework expands materially: brokers must also report basis information for covered securities alongside gross proceeds[reference:0].
Form 1099-DA is reported per transaction, similar to Form 1099-B, rather than on an annual aggregate basis. A single active trader can generate thousands of forms in a tax year. The form is filed electronically through the IRS Information Returns Intake System (IRIS) — and for tax year 2025, 1099-DA is only accepted through IRIS; the legacy FIRE system does not support it[reference:1].
A broker includes any person who, in the ordinary course of a trade or business, stands ready to effect sales of digital assets to be made by others[reference:2]. You are considered a broker with respect to sales of digital assets if:
Generally, only a U.S. digital asset broker is required to report on Form 1099-DA. A U.S. digital asset broker is a U.S. person (other than a foreign branch or office of such person), or a U.S. branch treated as a U.S. person, that effects sales of digital assets on behalf of others[reference:4].
| Broker Type | Filing Obligation |
|---|---|
| Centralized exchanges | Report gross proceeds and, for covered securities, cost basis for each digital asset sale effected on behalf of customers |
| Hosted wallet providers | Report when they take possession of digital assets being sold by customers[reference:5] |
| Digital asset kiosks | Report sales effected through kiosk transactions |
| Processors of digital asset payments (PDAPs) | Report PDAP sales above the $600 de minimis threshold |
| Real estate professionals | Report fair market value of digital assets paid by buyers and received by sellers in real estate transactions with closing dates on or after January 1, 2026[reference:6] |
| DeFi trading front-ends | Service providers at the interface layer (trading front-end services) are treated as brokers under the DeFi Regulations[reference:7] |
The 1099-DA regime is being implemented in phases. Understanding where you are on this timeline is critical to compliance.
| Phase | Effective Period | What Must Be Reported |
|---|---|---|
| Phase 1 | Transactions effected on or after January 1, 2025 | Gross proceeds only. Cost basis reporting not required. The IRS provided transitional basis-reporting relief for 2025 sales[reference:9]. |
| Phase 2 | Transactions effected on or after January 1, 2026 | Gross proceeds and cost basis for covered securities. Basis reporting for noncovered securities remains voluntary but is protected when Box 9 is checked[reference:10]. |
The distinction between covered and noncovered securities determines whether you must report cost basis on Form 1099-DA.
| Category | Definition | Basis Reporting |
|---|---|---|
| Covered security | Digital asset acquired through your platform on or after January 1, 2026, and held continuously in the same account[reference:12] | Mandatory — Boxes 1d, 1g, 2, and 6 must be completed[reference:13] |
| Noncovered security | Digital asset acquired before January 1, 2026, or transferred in from an external wallet or another broker[reference:14] | Voluntary — Check Box 9; if checked, boxes 1d, 1g, 1h, 1i, and 6 may be left blank without penalty[reference:15] |
If you check Box 9 for a sale of a digital asset that is a noncovered security, you do not have to complete boxes 1d, 1g, 1h, 1i, and 6, and you do not have to check box 2. If you voluntarily complete those boxes, you will not be subject to penalties under section 6721 or 6722 for failure to report or furnish this information correctly[reference:16].
If you do not check Box 9, you are subject to penalties under sections 6721 and 6722 for failure to report or furnish the information in those boxes correctly — even if you are reporting the sale of a noncovered security[reference:17].
The IRS has disallowed the “universal method” of aggregating cost basis across multiple wallets. Starting January 1, 2025, basis must be tracked and reported on an account-by-account basis. Revenue Procedure 2024-28 provides a safe harbor for allocating existing basis to assets held in specific wallets as of that date.
The IRS provides de minimis rules that exempt certain low-value transactions from Form 1099-DA reporting. A broker is not required to report sales of digital assets on Form 1099-DA if the sales fall within the following exceptions[reference:18]:
| Exception | Threshold | Key Rule |
|---|---|---|
| PDAP sales | $600 or less for the year | If a customer’s PDAP sales exceed $600, all of that customer’s sales must be reported[reference:19] |
| Qualifying stablecoin sales | $10,000 or less in aggregate gross proceeds | Applies to designated sales of qualifying stablecoins when using the optional reporting method[reference:20] |
| Specified NFTs | $600 or less in aggregate gross proceeds | Applies to sales of specified NFTs when using the optional reporting method[reference:21] |
IRIS offers two filing channels for Form 1099-DA. Choosing the right one depends on your transaction volume and technical capacity.
| Aspect | IRIS Taxpayer Portal | IRIS A2A (Application-to-Application) |
|---|---|---|
| File format | CSV template (download from portal) | XML (IRS-defined schema) |
| Record limit | 250 forms per CSV file | Up to 100 MB per transmission |
| Submission method | Manual upload and review | System-to-system API |
| Best for | Filers with fewer than 250 returns | High-volume filers (250+ returns) |
| Technical requirements | None — web browser only | API Client ID, XML generation, OAuth 2.0 authentication |
| Documentation | Publication 5717 | Publication 5718 |
The IRS provides free CSV templates for Form 1099-DA. You download the template, populate it with your data, and upload it through the portal. The portal validates the data and returns error messages for any issues. As of January 2026, the CSV file limit is 250 forms per file, and you may upload an unlimited number of files.
A2A is designed for high-volume filers. You generate XML that conforms to the IRIS schema package, sign and encrypt it, and transmit it to the IRS API. Each transmission can include multiple submissions, but each submission must contain the same form type and tax year[reference:23].
A Transmitter Control Code (TCC) is a five-character alphanumeric identifier issued by the IRS that authorizes you to electronically transmit information returns. Your FIRE TCC does not transfer to IRIS. You must apply for a new one.
Foreign filers whose authorized users do not have an SSN or ITIN must use the Foreign Filer TCC Registration System instead of the standard IRIS application[reference:24].
Filing deadlines for Form 1099-DA follow the standard information return schedule.
| Tax Year | Recipient Copy Deadline | IRS E-Filing Deadline |
|---|---|---|
| 2025 (filed 2026) | February 17, 2026 | March 31, 2026 |
| 2026 (filed 2027) | February 15, 2027 | March 31, 2027 |
Deadlines shown are based on current IRS guidance. The IRS may grant extensions in certain circumstances — always confirm with the IRS information returns deadline page.
IRIS A2A uses XML to define the structure and content of information returns. The payload is organized into three hierarchical levels[reference:26]:
The UniqueRecordId assigned by IRIS allows corrections to be linked to the original information return. If a correction has already been filed and accepted, additional corrections reference the UniqueRecordId associated with the most recently accepted correction[reference:27].
The Original Unique Submission Identifier (OUSID) and Unique Record Identifier (URID) enable transmitters to send replacement submissions and corrected records, and allow both the IRS and transmitters to track transmissions, submissions, and records[reference:28].
The following is a simplified representation of a 1099-DA record in IRIS XML format. The actual schema includes additional required fields and validation rules.
<?xml version="1.0" encoding="UTF-8"?>
<Form1099DA xmlns="urn:us:gov:treasury:irs:ir">
<SubmissionId>550e8400-e29b-41d4-a716-446655440000</SubmissionId>
<TaxYear>2026</TaxYear>
<Payer>
<PayerTIN>123456789</PayerTIN>
<PayerName>
<BusinessName>ACME EXCHANGE LLC</BusinessName>
</PayerName>
<PayerAddress>
<AddressLine1>100 MAIN STREET</AddressLine1>
<City>ANYTOWN</City>
<State>NY</State>
<ZipCode>10001</ZipCode>
</PayerAddress>
</Payer>
<Payee>
<PayeeTIN>987654321</PayeeTIN>
<PayeeName>
<PersonFirst>JOHN</PersonFirst>
<PersonLast>SMITH</PersonLast>
</PayeeName>
</Payee>
<DigitalAssetDetail>
<DigitalAssetCode>BTC</DigitalAssetCode>
<DigitalAssetName>BITCOIN</DigitalAssetName>
<DateSoldOrDisposed>2026-06-15</DateSoldOrDisposed>
<GrossProceedsAmt>45000.00</GrossProceedsAmt>
<CostBasisAmt>30000.00</CostBasisAmt>
<NoncoveredSecurityIndicator>0</NoncoveredSecurityIndicator>
</DigitalAssetDetail>
</Form1099DA>The tables below describe the mandatory and optional fields for Form 1099-DA. Field names in the IRS CSV template and XML schema must match exactly.
Free Excel template with test data for 1099-DA reporting.
Check your 1099-DA XML against the current schema — free and instant.
End-to-end 1099-DA filing — from data to IRS transmission.
| Field Name | Status | Description |
|---|---|---|
| Form Type | Mandatory | 1099-DA. Must match the form being filed. |
| Tax Year | Mandatory | Four-digit year (e.g., 2026). |
| Payer TIN | Mandatory | 9 digits. Dashes accepted or without dashes. |
| Payer TIN Type | Mandatory | EIN, SSN, ITIN, or ATIN. |
| Payer Name Type | Mandatory | B (Business) or I (Individual). |
| Payer Name Line 1 | Mandatory | Business name or individual first name. |
| Payer Name Line 2 | Optional | Individual last name or continuation of business name. |
| Payer Address | Mandatory | Street address. |
| Payer City | Mandatory | City. |
| Payer State | Mandatory | Two-letter state code. |
| Payer ZIP | Mandatory | 5-digit or 9-digit ZIP code. |
| Payer Country | Mandatory | Two-letter country code (e.g., US). |
| Payer Phone | Mandatory | Contact phone number. |
| Field Name | Status | Description |
|---|---|---|
| Recipient TIN | Mandatory | 9 digits. Dashes accepted or without dashes. |
| Recipient TIN Type | Mandatory | SSN, EIN, ITIN, or ATIN. |
| Recipient Name Line 1 | Mandatory | First name (individual) or entity name. |
| Recipient Name Line 2 | Optional | Last name (individual) or continuation. |
| Recipient Address | Mandatory | Street address. |
| Recipient City | Mandatory | City. |
| Recipient State | Mandatory | Two-letter state code. |
| Recipient ZIP | Mandatory | 5-digit or 9-digit ZIP code. |
| Recipient Country | Mandatory | Two-letter country code. |
| Recipient Phone | Mandatory | Contact phone number. |
| Account Number | Mandatory | Unique account number for the recipient. |
| Field Name | Status | Description |
|---|---|---|
| Box 1a: Code for Digital Asset | Mandatory | Nine alphanumeric characters referencing the DTIF code for the digital asset[reference:29] |
| Box 1b: Name of Digital Asset | Mandatory | Name of the digital asset (e.g., Bitcoin, Ethereum)[reference:30] |
| Box 1d: Date Acquired | Conditional | Mandatory for covered securities. May be left blank for noncovered if Box 9 is checked. |
| Box 1e: Date Sold or Disposed | Mandatory | Date of sale or disposition. Format: M/D/YYYY[reference:31] |
| Box 1g: Cost or Other Basis | Conditional | Mandatory for covered securities. Voluntary for noncovered when Box 9 is checked. |
| Box 1h: Gain or Loss | Conditional | Mandatory for covered securities where basis is reported. |
| Box 2: Ordinary Gain/Loss Indicator | Conditional | Check if the transaction results in ordinary gain or loss. Not required if Box 9 is checked. |
| Box 6: Gross Proceeds | Mandatory | Amount of gross proceeds. Format: 45000.00 (no commas, no dollar signs). |
| Box 9: Noncovered Security Indicator | Conditional | Check if the digital asset is a noncovered security. Triggers penalty protection for voluntary basis reporting. |
| Box 10: Reason Noncovered | Conditional | If Box 9 is checked, complete Box 10 to indicate the reason the asset is noncovered. |
| Box 11: Holding Period | Conditional | Mandatory for covered securities. Indicates short-term or long-term. |
Most rejected 1099-DA submissions fail for the same handful of reasons. The list below covers the errors the IRS identifies most frequently.
If a Business Name and TIN are both present in the recipient detail, they must match the IRS database. The same rule applies to Person Name and TIN. Mismatches result in an “Accepted with Errors” status and may trigger a B-Notice to the recipient. The IRS penalty for each Name/TIN mismatch is now $280[reference:32].
If you do not check Box 9 for a noncovered security, you are subject to penalties under sections 6721 and 6722 for failure to report basis information correctly — even though basis reporting is voluntary for noncovered securities[reference:33]. This is one of the most costly and easily avoidable errors.
IRIS accepts TINs both with and without dashes, but the format must be consistent and valid for the TIN type. A US SSN does not validate as an EIN, and vice versa. Confirm the TIN type and format before submission.
IRIS enforces strict name formatting. Business names and individual names must be split into separate fields (Line 1 and Line 2). Combined names in a single field will fail validation. Middle names, suffixes, and prefixes may also require specific handling.
The IRIS XML schema uses xs:sequence, which requires child elements in a specific order. Even if your data is correct, mis-ordered elements will fail schema validation.
Amounts must use a period as the decimal separator and no thousands separators. 45000.00 is valid; 45,000.00 and 45000,00 will fail. Negative amounts are not permitted.
Digital assets acquired before January 1, 2026, or transferred into the reporting broker are noncovered securities. Misclassifying a noncovered security as covered — or vice versa — will result in incorrect basis reporting and potential penalties[reference:34].
The Taxpayer Portal accepts a maximum of 250 forms per CSV file. If you attempt to upload more, the file will be rejected. Split large batches into multiple files.
Novus automates the entire 1099-DA filing workflow — from transaction data ingestion to XML generation, validation, and IRS transmission through IRIS.
Form 1099-DA is the IRS information return for reporting the sale, exchange, or disposition of digital assets. Brokers use it to report gross proceeds from (and in some cases, basis for) digital asset dispositions to customers and the IRS. It was mandated by the Infrastructure Investment and Jobs Act of 2021 and finalized under IRC § 6045.
If you are considered a “broker” under IRC § 6045 — including exchanges, custodians, hosted wallet providers, digital asset kiosks, and certain payment processors — you likely have a filing obligation for digital asset dispositions by U.S. customers. A broker includes any person who, in the ordinary course of a trade or business, stands ready to effect sales of digital assets to be made by others.
Gross proceeds reporting applies to all digital asset sales from 2025 onward. Cost basis reporting becomes mandatory for covered securities — assets acquired through your platform on or after January 1, 2026 — starting with the 2026 tax year.
If you do not check Box 9, you are subject to penalties under sections 6721 and 6722 for failure to report or furnish basis information correctly — even if you are reporting the sale of a noncovered security. Checking Box 9 for noncovered securities protects you from these penalties.
No. Form 1099-DA is only accepted through IRIS. As of January 1, 2027, IRIS is the only electronic filing channel for information returns, and paper filing is no longer permitted.
The Taxpayer Portal is a free web-based interface for manual entry or CSV upload — best for filers with fewer than 250 returns. A2A is a system-to-system API that uses XML and supports transmissions up to 100 MB — best for high-volume filers and automated workflows.
Use our free XML validation tool to check your file against the correct schema. The tool reports errors with line numbers so you can fix them before submission.
Yes. Novus automates the full workflow — you provide transaction data (Excel, CSV, or database), and we generate the schema-valid XML, apply digital signatures and encryption, and transmit to IRIS on your behalf. Book a demo to see it in action.
Sales by a processor of digital asset payments (PDAP) of $600 or less during a year, qualifying stablecoin sales of $10,000 or less, and sales of specified NFTs of $600 or less need not be reported on Form 1099-DA.
Yes. Our platform tracks the original submission identifiers (UniqueRecordId) assigned by IRIS and generates the correct correction payload without manual lookup.