IRS Ramps Up Crypto Tax Enforcement With Warning Letters Ahead of 1099-DA Implementation

The Internal Revenue Service has escalated its scrutiny of cryptocurrency investors, dispatching a fresh wave of warning letters as the 2026 deadline for 1099-DA reporting requirements approaches. Tax professionals report widespread anxiety among retail holders who attempted compliant filings but now face potential audits.

CoinLedger CEO David Kemmerer observes heightened confusion across U.S. crypto markets, noting the IRS now cross-references blockchain data with third-party records. 'The agency's visibility into digital asset flows has never been greater,' Kemmerer warns, highlighting how incomplete cost basis reporting triggers false flags even among conscientious filers.

This enforcement push coincides with Washington's broader campaign for financial transparency in digital assets. The coming 1099-DA framework will formalize reporting obligations, but current actions demonstrate the IRS isn't waiting for 2026 to flex its oversight muscles.