Core Insights - A significant majority of crypto traders in the U.S. are not fully reporting their digital asset income to the IRS, indicating a potential increase in enforcement risk as IRS visibility improves [1][3] Group 1: IRS Reporting Changes - The IRS will implement Form 1099-DA starting January 1, 2026, requiring U.S. centralized exchanges to report detailed information about crypto transactions [2] - This new reporting requirement is part of the 2021 Infrastructure Investment and Jobs Act and aims to clarify taxable events for traders [2][3] Group 2: Global Reporting Framework - The Crypto-Asset Reporting Framework (CARF) will begin in 2027, expanding global reporting obligations for crypto transactions [4] - CARF mandates that participating jurisdictions collect and share information about crypto users with their home tax authorities, eliminating loopholes for traders using foreign exchanges [5] Group 3: Reporting Requirements Under CARF - CARF requires exchanges to report every sale, swap, and transfer without any minimum thresholds, including small transactions [6][8] - Exchanges must collect full KYC information, identify users' tax residency, and report all transactions to the user's home country [9]