Coinbase Warns 1099-DA Could Burden Small Crypto Transactions

Coinbase says IRS Form 1099-DA will require reporting stablecoins, gas fees, and all crypto sales starting in the 2025 tax year.

The 2025 tax year introduces new digital asset reporting rules in the United States, and Coinbase says parts of the framework may create added strain for users and brokers.

The exchange points to the new Form 1099-DA as a major change in how crypto transactions will be reported to the Internal Revenue Service.

IRS Expands Crypto Reporting With Form 1099-DA

For the first time, the IRS will require custodial brokers to report customer proceeds from crypto transactions using Form 1099-DA.

The rule applies to the 2025 tax year and affects platforms such as Coinbase.

The form must include gross proceeds from all reportable sales or exchanges. It also requires aggregated reporting for certain stablecoin transactions.

In addition, brokers must report transactions involving small-value sales, including gas fees.

These requirements are set by the IRS and apply across the digital asset industry.

Exchanges must follow the same standards when preparing and issuing tax documents to customers.

Coinbase Raises Concerns Over Stablecoin Reporting

Coinbase stated that it supports clear rules but believes some elements of the new framework go too far.

The company said that requiring 1099-DA forms for stablecoins may add paperwork without generating tax revenue.

Stablecoins are designed to track the value of the US dollar and often do not result in gains or losses.

Coinbase said reporting such transactions could create “a mountain of paperwork for zero tax revenue.”

The exchange also called for a de minimis threshold for crypto sales.

It said reporting small purchases, such as a $5 gas fee or a coffee payment, adds administrative work while offering limited benefit to the Treasury.

Related Reading: Coinbase Moves Closer to Direct Fed Payment Access

Compliance Efforts and Tax Document Delivery Timeline

Coinbase confirmed that it will comply with the law and follow IRS reporting standards. At the same time, the company stated that it will not provide more data than what is legally required.

“At Coinbase, our position is clear: we’re committed to advocating for common-sense rules while providing you with the tools to stay compliant,” the company said.

It added, “We comply with the law, but we will not over-deliver data to the government.”

The exchange has started delivering tax documents to users. All required forms, including Form 1099-DA where applicable, are scheduled to be delivered by March 17.

Users are advised to review their documents and prepare for the updated reporting process for the 2025 tax year.

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