Avoid the Risks of Uncertain Cryptocurrency Regulations

The IRS expects tax reporting of cryptocurrency related payment transactions, but the exact Form 1099 requirements for payers remain unclear.

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

GET THE REPORT

Managing risk

The risks of not complying with these uncertain requirements can be severe. The IRS fine for intentionally disregarding tax reporting requirements have no maximum, and fines for forms filed late can add up quickly. 

Currency exchanges need a partner to automate tax information reporting. It’s essential to comply with crypto regulations and avoid financial penalties.

Sovos Tax Information Reporting for cryptocurrency exchanges

Sovos provides the automation and regulatory insight to protect your exchanges from risk:

Full reporting automation

Fully automate reporting and payment for traditional and modern, transaction-level tax reporting. Avoid the risk and inefficiency inherent in manual reporting processes that can’t keep up with the pace of regulatory change.

Increased staff efficiency

Reduce the burden on staff with optimized workflows, and let staffers maximize efficiency by spending time on other mission-critical duties.Through our managed services offering, Sovos acts as an extension of your back office.

Manage reporting challenges

The high frequency and complexity of crypto trading makes tracking of transactions and scaling difficult. Simplify complex record keeping and track gross proceeds, capital gains and losses with Sovos.

Revenue protection

Avoid late fees and penalties by eliminating human error and adopting full automation of tax information reporting.

Automated regulatory content 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 regulation emerging and continuing to develop, crypto exchanges need a partner with experience keeping customers compliant and protecting them from regulatory risk. Sovos is the largest private filer of 1099 forms, processing over one-third of all Forms 1099-B to the IRS on behalf of our customers.

Our Customers

gemini_logo
paxos-logo
BlockFi_Logo_Watermark_Gradient
binance-dot-us
Securitize-Logo-Full---Blue
Bitstamp Logo Full

Sovos is a proud member of:

ABC Member Logo
NEW WSBA LOGO 2018-01
Chamber logo

Sovos Partners with Companies Built for Blockchain

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

Built for blockchain

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 need to be ready for reporting on multiple types of 1099 forms. Sovos has a long history of managing Forms 1099-K, 1099-B, 1099-MISC and 1042-S, the types most commonly used for crypto reporting, as well as many other forms that could eventually come into play.

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

Tax Information Reporting
November 18, 2020
Latest Updates: State Direct Reporting Requirements for Form 1099-NEC

With the latest IRS announcement in Publication 1220 stating that information reporting data for the new Form 1099-NEC  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 the latest state requirements for Form […]

Tax Information Reporting United States
November 16, 2020
Resource Center: New form 1099-NEC & Direct to State Reporting

Tax and accounting professionals managing 1099 reporting will need help this tax season. Here’s why.

Tax Information Reporting
November 12, 2020
Things Are Looking Up for Direct Sellers for 2021 NEC Reporting

This week, the IRS released draft instructions for 2021 reporting of tax information on Forms 1099-MISC and 1099-NEC. One of the most notable changes included in the “What’s New” section of the instructions is the indication that the IRS has added the Payer Made Direct Sales of $5K or more checkbox to the Form 1099-NEC. […]

Tax Information Reporting United States
December 1, 2020
AP Automation Summit | Dec 1-4 | Virtual

Are you prepared for the challenges of the upcoming 1099 Tax Reporting season?  Don’t miss Sovos’ demo session at AP Automation Summit on December 4th at 11:15am.   As tax and accounting professionals may know, this tax season is shaping up to be one of the most challenging in years. With the combination of a significant […]

Tax Information Reporting United States
November 9, 2020
5 Reasons to Attend Sovos’ Insurance and Regulatory Summit

Sovos is the industry leader in U.S. insurance accounting and reporting, education and software. From our expert level instructors, to our industry best-in-class software and support, to our customized high-quality training, Sovos helps you meet your organizational goals. Being the industry leader requires staying ahead of industry changes in insurance accounting and financial reporting.  To […]

Tax Information Reporting United States
October 27, 2020
Sovos Regulatory Course Spotlight and Meet Our Educators

Course Offering Spotlight In this week’s course offering spotlight, we are highlighting another one of Sovos’ regularly offered courses, Schedule P Preparation. This course teaches you how to complete schedule P of the annual statement and understand its analytic value. In our upcoming Sovos Insurance Regulatory Summit 2020, we will be offering a session on […]

Tax Information Reporting
October 27, 2020
Tax Issues Only Going to Get Worse with PayPal Going Crypto

Starting in early 2021, PayPal customers can buy, sell and trade select cryptocurrencies using their PayPal and Venmo online wallet accounts. Shoppers will also be able to use crypto to purchase goods and services using their PayPal account, according to Reuters last week. For the 26 million merchants participating in the PayPal network, expanding payment […]

Tax Information Reporting United States
October 14, 2020
Sovos Regulatory Course Spotlight and Meet Our Educators

With more than 50-years helping professionals succeed in their career, our Sovos Booke regulatory team is known and trusted throughout the insurance industry and is the premier compliance destination for information and emerging trends in tax, regulatory reporting and compliance. Our team of educators share their knowledge and experience to teach the nitty-gritty of insurance […]

Tax Compliance Tax Information Reporting United States
October 6, 2020
2020 GCS Intelligent Reporting | Session Recaps

Tuesday, October 6 CEO Keynote: Our Journey to Solve Tax for Good | Andy Hovancik, President & CEO, Sovos GCS Intelligent Reporting kicked off with our Sovos CEO, Andy Hovancik, sharing more on what attendees can expect to get from this year’s event and helping attendees better understand Sovos’ mission to “Solve Tax For Good.” […]

Tax Compliance Tax Information Reporting United States
September 29, 2020
2020 GCS Speaker Spotlight Series | Lukka

Sovos’ Global Compliance Summit – Intelligent Reporting “Speaker Spotlight” Series continues with an introduction to another brilliant tax expert who is particularly knowledgeable in the cryptocurrency industry. In this segment, we welcome Roger Brown of Lukka, who will be presenting at our upcoming conference in early October.  Roger will highlight the anticipated OECD developments involving […]

“We always strive to create an exceptional trading experience that both protects and benefits our customers. Sovos takes away the complicated guesswork of crypto tax reporting, helping us and our clients to be compliant.”

Andrew Chang

Chief Operating Officer, Paxos

Schedule a demo Read the Case Study

paxos-logo