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.

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“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

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