Tax & Compliance Automation for Virtual Asset Service Providers

Virtual Asset Service Providers need an experienced partner that keeps clients compliant and protects them from regulatory risk.

2020 Crypto Tax Report: Insights from leading crypto accountants and tax practitioners on tax reporting and compliance. 

Managing Risk in an Evolving Industry

The IRS has taken notice of the massive tax gap in the cryptocurrency market. The demand for consistent tax information from digital asset clients will increase as further scrutiny is placed on their tax returns. The need for accurate and accessible tax statements will be expected as the digital asset market continues to mature. Sovos has an unmatched record of successfully executing 1099 reporting and protecting our clients’ revenues.

Running afoul of IRS 1099 cryptocurrency reporting regulations can bring severe risk. The IRS fine for intentionally disregarding regulations has no maximum, and fines for forms filed late can add up quickly. Additionally, liabilities can accumulate over time for non-compliance. Virtual Asset Service Providers must prepare for IRS enforcement and constantly changing regulations on cryptocurrency tax reporting.

Sovos Tax Information Reporting for Virtual Asset Service Providers

Sovos provides the automation and regulatory insight necessary to protect your organization from risk. With over 40 years’ experience as a leader in tax information reporting, Sovos has the services you need along with the guidance and support new entrants into the cryptocurrency tax market simply can’t provide:

  • 1099, 1042-S, 5498 Reporting
  • Statement Delivery
  • Tax Identification Number Verification
  • Withholding
  • Unclaimed Property
  • Professional Services

Mitigate risk and protect revenue

Easily verify and manage customer tax identity information, avoid late fees and penalties and reduce audit risk by allowing your organization to manage complex reporting and withholding processes with fewer resources, errors and rework.

Improve operational efficiency

Avoid manual reporting processes, wasted time and accompanying inefficiencies that can’t keep pace with the speed of regulatory change. Reduce the burden on staff with an optimized and intuitive workflow that maximizes efficiency and process visibility - allowing employees to spend time on other mission-critical duties.

Automated regulatory management

Get the latest regulatory updates built in. Sovos updates all applications behind the scenes through our content management platform and integrates them into the reporting solution, freeing teams from the work required to monitor, interpret and deliver regulatory content.

Tax ID management solutions

Inaccurate information can be costly. Use proven methods of data verification to match TIN and name data and avoid IRS financial penalties, and efficiently handle abatement of penalty notices.

An experienced partner

With crypto regulation continuing to evolve, crypto exchanges and other Virtual Asset Service Providers need an experienced partner to keep customers compliant and protect them from regulatory risk. Sovos is the largest private filer of 1099 forms, responsible for over 25% of all forms filed with the IRS.

Our Customers

Sovos is a proud member of:

Sovos Partners with Digital Asset industry Pioneers

We understand the unique challenges and potential pitfalls associated with digital assets, and we know how to overcome them.

Built for blockchain accounting

Sovos solutions, combined with partner offerings, are tailor-made to handle the challenges of tax reporting using blockchain technology.

Ready for any kind of 1099 form

As IRS regulation of cryptocurrency develops, exchanges must be ready for reporting on multiple types of 1099 forms. Sovos has a long history of managing the form types most commonly used for crypto reporting, including 1042-S, 1099-K, 1099-B, 1099-NEC, 1099-MISC, 1099-R. Additional support for 1095, 1098, 3921, 3922, 5498, W-2, W-4P, W-9, Puerto Rico, Canada and Quebec form types, along with FATCA and CRS reportable jurisdictions.

Trusted worldwide

More than half of the Fortune 500, and many of the largest digital asset companies, trust Sovos for tax reporting and compliance solutions. We have 14 offices in 10 countries.

Related content

North America Sales & Use Tax Tax Information Reporting
April 20, 2021
Financial Operations Summit | Apr 20-23 | Virtual

IOFM’s Spring 2021 Financial Operations Summit is a 4-day virtual event connecting financial operations professionals in AP and AR with leading solution providers through daily town hall panel discussions, demo presentations, by-invitation focused luncheons, peer networking opportunities, and more.  The event will bring together thought leaders and Subject Matter Experts from AP and AR to address the most […]

North America Tax Compliance Tax Information Reporting
February 16, 2021
More Changes to Form 1042-S

Another January – arguably the busiest month of the tax season – has ended. Tax reporting professionals were consumed with issuing (and filing, in some cases) Forms W-2, 1099, and other information returns for U.S. taxpayers throughout the month of January. Now, we turn our attention to preparing for another busy month of tax processing. […]

North America Tax Information Reporting
May 24, 2021
2021 Consensus | May 24-27 | Virtual

Consensus 2021 is a conference dedicated to the cryptocurrency and blockchain industry in the worlds of legacy finance and commerce. Sovos will be there! Consensus 2021 covers topics such as: Blockchain industry capital formation, Retail and institutional crypto markets, The intersection of blockchain and cryptocurrencies with the traditional business world, Regulation and compliance, Hands-on environment […]

Tax Information Reporting
February 1, 2021
Unclaimed Property and the Insurance Industry

By: Cornel Lupu Insurance companies, like all “holders,” are required to comply with the unclaimed property laws for each state or jurisdiction within the United States and its territories. Although there are some similarities, many states have different reporting requirements and dormancy periods. As of late, there have been many legislative changes affecting the unclaimed […]

Tax Information Reporting
January 20, 2021
Better Late Than Never: IRS Releases 1099 Reporting Guidance Impacting 2020 Season

January is in full-swing as businesses and software filers scramble to prepare Forms W-2, 1099, 1098 and other information returns to issue to recipients by the end of this month. As the deadline approaches for what is arguably the busiest month of tax season, the IRS released Notice 2021-06 impacting 1099’s that your company may […]

Tax Information Reporting
January 19, 2021
IRS and States Continue To Focus on Gaps in Nonemployee Compensation Income Reporting

Nonemployee compensation is the income paid by companies that classify an individual as a nonemployee. Nonemployee compensation can represent a variety of business payments including fees, commissions, prizes or rewards. The IRS and states use a variety of information returns to verify the accuracy of income claimed by individuals and business taxpayers including Form 1099-MISC […]

Tax Information Reporting
January 6, 2021
Latest Updates: State Direct Reporting Requirements for Form 1099-NEC

Updated Feb. 2, 2021 With the latest IRS announcement in Publication 1220 stating that information reporting data for the new Form 1099-NEC, Nonemployee Compensation, will not be included in the Combined Federal/State Filing (CF/SF) program, numerous states are beginning to publish direct reporting requirements. The Sovos regulatory analysis team will continuously update this page with […]

North America Tax Information Reporting
December 15, 2020
How to Get a Handle on Tax Information Reporting This Season

Download this white paper to learn some of the most common issues organizations face during year-end 1099 reporting, along with best practices to help your business avoid them.

North America Tax Compliance Tax Information Reporting
March 28, 2021
2021 UPPO Annual Conference | Mar 28-31 | Virtual

The UPPO Annual Conference is the premier event for professionals responsible for unclaimed property. And for unclaimed property experts! The conference integrates networking and premier education into every aspect of the agenda, providing attendees with the information and connections needed to minimize their companies’ risk, and achieve and sustain compliance with unclaimed property laws and […]

North America Tax Information Reporting
December 9, 2020
Sovos Acquires LTtax, Strengthening Automated Tax Withholding Capabilities

Earlier this week, Sovos acquired LTtax, a New York-based provider of payroll withholding and unemployment tax software. The company serves some of the largest retailers, financial institutions and insurers operating in the United States, and its automated withholding technology solves a critical need for large enterprises that manage their own payroll services. Sovos saw an […]

“By leveraging the Sovos platform, BlockFi can continue to grow quickly and release new financial products without worrying about murky cryptocurrency tax information reporting requirements.”

Amit Cheela

Senior Vice President of Finance at BlockFi

BlockFi_Logo_Watermark_Gradient