Over 50% of U.S. crypto investors fear IRS penalties under new tax rules.

KuCoinFlash

Release Time: 02/18/2026 14:01:50

Summary

According to a survey by Awaken Tax, new IRS cryptocurrency rules have put more than 50% of U.S. crypto investors on alert for potential penalties by 2026. Starting in 2025, brokers such as Coinbase must report all digital asset transactions using Form 1099-DA. This change grants the IRS direct access to exchange data, which will be cross-referenced with tax returns. Andrew Duca of Awaken Tax noted that the rules treat crypto like stocks, but DeFi and multi-wallet activity complicate compliance. Brokers can only report sales, not cost basis, leaving gaps that taxpayers must fill using Form 8949. With new token listings increasing, compliance remains below 20%.

BlockBeats news, on February 18, according to CoinDesk, a survey by the crypto tax platform Awaken Tax revealed that over 50% of U.S. crypto investors are concerned about facing IRS penalties this year. New regulations require brokers such as Coinbase to report all digital asset transactions for 2025 to the IRS via Form 1099-DA to combat tax evasion. The IRS will, for the first time, access exchange internal data and cross-reference it with taxpayers’ filings.

Andrew Duca, founder of Awaken Tax, points out that the rule equates crypto assets with stocks, but the actual process is complex: users frequently transfer assets between multiple wallets and interact with DeFi, while brokers can only report proceeds from sales, not the cost basis (purchase price), resulting in incomplete forms. Taxpayers must manually supplement cost information using Form 8949. Currently, crypto tax compliance rates are below 20%.

Source:Show original

Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information. Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.