At a major gathering of tax professionals, digital assets expert Nik Fahrer, CPA, warned that the next filing season could be rough for preparers. He spoke at the AICPA National Tax Conference, where the focus shifted to new and changing rules for reporting crypto and other digital assets. Practitioners worry that unclear guidance and new forms will bring heavier workloads and more risk of errors.
The comments land as the Internal Revenue Service steps up oversight of crypto transactions. Draft forms, proposed rules, and shifting timelines have become common. Firms now face a mix of client records from exchanges, wallets, and decentralized platforms that rarely line up neatly with tax forms.
Why Preparers Are Concerned
Digital assets expert Nik Fahrer, CPA, sympathized with tax pros who dread the upcoming tax season because of digital asset reporting requirements.
Fahrer’s remarks reflect the growing pressure on firms. Many clients trade across several platforms. Others move assets between wallets, stake tokens, or receive airdrops. Each event can have tax effects that hinge on timing, intent, and documentation.
Preparers say the hardest cases involve incomplete transaction histories. Cost basis is missing. Transfers are mislabeled. Losses are not tracked across platforms. Even basic income items, like staking rewards, can be recorded differently by exchanges.
- Inconsistent or missing cost basis data
- Multiple exchanges and wallets per client
- Complex events like staking, airdrops, and token swaps
- Treatment of NFTs and decentralized finance activity
Evolving Rules And New Forms
Regulators have proposed expanded broker reporting for digital assets. A draft Form 1099-DA has circulated, signaling a shift to third-party reporting of sales proceeds and, in some cases, basis. Effective dates and phase-ins have generated confusion, as guidance continues to develop.
For now, taxpayers still report gains and losses on Form 8949 and Schedule D. Income from staking, mining, and rewards is generally ordinary income. But classification and timing questions remain, especially when tokens are locked, rebased, or bridged across chains.
Practitioners also flag Form 1099 reporting mismatches. Some platforms issue 1099-K or 1099-MISC forms that do not reflect net gains. This can create notices and follow-up work even when the return is correct.
Industry Response And Practical Steps
Firms are turning to specialized software and stricter intake procedures. Many now require full wallet and exchange export files before engagement. Others build spreadsheets to reconcile transfers and wash out internal wallet moves that look like sales.
Experts advise setting client expectations early. Engagement letters should spell out limits if records are incomplete. Fee schedules should reflect the time required to trace basis and classify transactions. Staff training is vital so teams can identify taxable events and spot gaps in data.
Some firms create playbooks for common scenarios. That includes staking rewards, non-fungible token sales, token-to-token swaps, and liquidity pool exits. Clear checklists reduce errors and keep reviews consistent across preparers.
What Clients Should Do Now
Taxpayers can ease the burden by organizing records well before filing season. They should download complete CSV files from every platform used during the year. Wallet addresses should be listed and labeled. Notes about staking, rewards, or token grants can help determine timing and income type.
Clients who traded NFTs or used decentralized finance should document each step. Token swaps, bridging, and liquidity pool entries or exits can carry tax effects. Early communication with preparers gives time to resolve missing data and avoid filing extensions.
What To Watch Next
Firms are waiting for final details on broker reporting and any updates to digital asset definitions. The timing of new forms will drive how much third-party data is available during the next season. Data quality from exchanges remains a key unknown.
Fahrer’s message matched the room’s mood: the work will be harder, but planning helps. Preparers who standardize intake, invest in tools, and educate clients can reduce surprises. As the rules mature, filings should become more consistent. For now, clear records and early engagement are the safest path through a still-shifting area of tax law.
