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.

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 complying with crypto regulations and avoiding 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

Sovos is a proud member of:

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 United States
February 20, 2020
Nexus vs. Residency: Your Guide to Error-free State Reporting

State reporting requirements vary drastically from state to state and are constantly changing. Get the complete guide to one of the most complex and time-consuming tax reporting obligations for your business.

Tax Compliance Tax Information Reporting United States
February 19, 2020
IRS Agrees to more Clarity on Crypto Information Reporting

The Government Accountability Office (GAO), a U.S. Congress watchdog, published a report evaluating the IRS’s approach to regulating virtual currency (crypto) and the guidance it has offered the public. In the report, the GAO offered three recommendations for the IRS, and an additional recommendation for the Financial Crimes Enforcement Network (FinCEN), a bureau of the […]

Tax Compliance Tax Information Reporting United States
February 5, 2020
Will AB5 Become a National Trend?

California’s Assembly Bill 5 (AB5) has sparked a national trend towards increased regulations on the gig economy. New York, New Jersey and Illinois have followed California’s lead, attempting to pass their own versions of AB5. What is AB5? Triggered by the landmark Dynamex ruling, California’s AB5 requires businesses that hire gig workers to treat those […]

Tax Compliance Tax Information Reporting United States
February 4, 2020
Sovos Makes Back-to-Back Statutory Reporting Acquisitions with Purchase of Booke

In 2019, Sovos acquired Eagle Technology Management (ETM) for its history of innovation in statutory reporting and other key compliance solutions for U.S.-based insurance companies. Today, Sovos announced the acquisition of Booke, which provides critically important educational seminars to employees of American insurance companies and the Internal Revenue Service (IRS) on topics across property, casualty, […]

Asia Pacific Tax Compliance Tax Information Reporting United States
February 3, 2020
Starbucks Shakes Up the Banking World

Experts believe Starbucks plans to enter the financial services industry. This belief is based on the huge sum of money Starbucks holds in stored value card liabilities and Starbucks’ investments in crypto. It also removed the word coffee from its signboard. Billions in value card liabilities Starbucks customers generate a massive amount of money purchasing […]

Tax Compliance Tax Information Reporting United States
January 14, 2020
See the Latest IRS FY19 Updates on Crypto and Gig Economy Enforcement

The IRS commissioner Chuck Rettig issued the agency’s FY19 updates last month, which included updates on compliance and education initiatives aimed at the emerging gig and crypto industries.   Publication 5382 was released in December to provide taxpayers with updates on the IRS’  FY19 goals. Of the six goals discussed in the report, goal two promised […]

Tax Information Reporting United States
January 8, 2020
Your Guide to Posting Unclaimed Property Advertisements in New York

Not all states have the same requirements for completing an unclaimed property state report. The state of New York requires that certain companies publish unclaimed property information in newspapers in the form of advertisements. It is important to note the advertising does not replace the need to send due diligence letters. Both advertising and due […]

Tax Compliance Tax Information Reporting United States
January 6, 2020
Take 5 Minutes to Learn this Year’s Last Minute Tax Information Reporting Changes

Tax time is upon us, which means last minute IRS and state tax information reporting changes are keeping us on our toes. Take five minutes to learn what these changes are and what you need to do to protect your business from penalties. 1. California’s last-minute change On December 9th, the Franchise Tax Board posted […]

Tax Information Reporting United States
December 30, 2019
3 Best Practices for Unclaimed Property Record Retention

Unclaimed property retention requirements vary based on each state’s rules and regulations. Depending upon the property type and state, record retention periods can take up to 10 years, not including the dormancy period. This means you could retain records for up to 20 years. To successfully keep track of all these records and avoid an […]

Tax Information Reporting United States
December 23, 2019
Navigate California’s Unclaimed Property Reporting Cycle in 4 Simple Steps

It has been several years since California changed its unclaimed property reporting process, yet many holders are still unsure how to remain compliant. This is because California’s reporting cycle includes two different reports. Below are the steps to submitting those reports and remaining compliant in California: Step 1: Holder Notice Report The first report is […]

“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