Coinbase Says IRS 1099-DA Rules Are Cluttered and Risk Over-Reporting
Coinbase tax experts warned on March 7, 2026 that the IRS’s new 1099-DA form for reporting digital-asset gains is cluttered and confusing, and risks producing significant over-reporting. The firm said the form’s design and current guidance can force brokers to report gross proceeds or mismatched cost basis in ways that inflate reported gains, creating misleading tax liabilities for ordinary traders and complicating year-end reconciliations for exchanges.
The warning matters because inflated or inconsistent reporting could increase audits, disputes and compliance costs for both users and platforms. Coinbase’s critique adds to broader industry calls for clearer Treasury guidance or technical fixes; without prompt adjustments, retail investors may face extra paperwork, erroneous liabilities or delayed refunds while brokerages shoulder higher operational burdens to reconcile divergent records.