SHERIDAN, Wyo., April 23, 2025 (GLOBE NEWSWIRE) — A multi-year investigation by crypto tax experts revealed pervasive, critical flaws in the current crypto tax reporting ecosystem in a newly published report, warning of dire consequences for traders, investors, and miners as the IRS prepares to enforce new 1099-DA regulations.
Researchers at DeFi Tax conducted an extensive, multi-year effort involving data validation, platform testing, and direct engagement with regulatory bodies. Their findings point to a widespread “systemic failure” across popular crypto tax platforms, including IRS-endorsed tools, in accurately calculating gains, losses, and taxable income.
Crypto Tax Tools Falling Short
From 2021 to 2024, DeFi Tax researchers manually reviewed hundreds of transactions using raw blockchain data and IRS cost accounting rules. Their analysis uncovered consistent miscalculations by leading platforms. These issues stem from incomplete data collection, flawed asset disposal methodologies, and incorrect transaction classifications.
Mainstream exchanges will likely further complicate matters when they issue inaccurate or contradictory 1099 forms, resulting in users unknowingly submitting false income tax returns.
“None of the platforms we reviewed could produce audit-ready reports with consistent accuracy,” said Janna Scott, Head of DeFi Tax. “This exposes taxpayers to enormous financial and legal risk.”
Scott reports that despite concerted outreach efforts to multiple crypto tax platforms and exchanges in an effort to sound the alarm, the responses were either dismissive or entirely absent. She explains that in mid-2023 many of the …