From tax IDs to cost basis to 1099-DAs, every step of crypto tax compliance is covered in one connected solution built for accuracy, scale, and confidence.
All the moving pieces connected in one place. Tax ID verifications, cost basis tracking, and 1099-DA reporting working together so you get compliance right the first time.
Compliance done right, so you don’t pay the price with costly penalties, backup withholding, or regulators questioning your reporting accuracy.
Scale reporting without scaling your workload. Automation takes care of the heavy lifting so your team can focus on growth, not busywork.
Unify tax ID collection and verification, digital asset cost basis, and 1099-DA reporting in one connected solution that also manages traditional securities, giving you complete, gap-free compliance across all asset classes in a single platform.
Confidently process millions of digital asset transactions per minute. Sovos is built to handle high-frequency, high-volume trading environments without bottlenecks, ensuring accurate and timely 1099-DA reporting even when transaction complexity and scale increase dramatically.
Deliver investors and account holders clear, consolidated tax statements across traditional and digital assets, including 1099-B, 1099-DA, 1099-DIV, 1099-INT, 1099-MISC, 1099-OID, and 1099-PATR, while improving transparency, reducing confusion, and protecting sensitive data.
Handle the complexities of digital asset cost basis including transfers, swaps, and staking while also supporting traditional securities, bringing both sets of data together for accurate, complete reporting.
Generating a 1099-DA form requires accurate W-8/W-9 management, withholding determination, transaction tracking and cost basis calculations. Sovos partners with industry leaders to ensure a seamless flow of information, but we also integrate with existing or chosen partners—giving you the flexibility to build the best tax compliance solution with the top providers in the market.
Interested in becoming a Sovos partner?
Yes, Sovos 1099 Reporting supports all federal and state filing requirements, even as they evolve leading up to the reporting deadline.
Form 1099-DA is being built exclusively on IRIS, the IRS’s new filing system, and is not supported on the legacy FIRE system. Since all 1099-DA filers must use IRIS, it makes sense to consolidate filing for all available form types on the same platform. The primary form not yet available on IRIS is Form 1042-S, but development for it began in early 2025.
State reporting requirements for Form 1099-DA are still evolving, and new states may introduce requirements up until the filing deadline. To stay up to date, visit our State Reporting Guide for the latest information.
Penalties for 1099-DA filings are the same as other 1099 forms. Beginning with tax year 2026, 1099-DA will be subject to backup withholding, meaning enforcement of missing or incorrect name/TIN combinations will begin then. Incorrect name/TIN combinations for 2025 filings may result in penalties of $340 per incorrect record. Learn more about penalties here.
Once data is added to the system, it goes through multiple validations, including IRS-specific checks. These validations ensure all required fields are populated, addresses are formatted correctly, and IRS rules—such as code and percentage combinations—are followed. This helps prevent errors before submission.
Once a record is filed with the IRS, any updates are considered corrections. Sovos supports all federal corrections and amendments, including generating corrected statements and filing updates with the IRS.
In the Sovos Crypto Tax platform, W-8 and W-9 collection is seamlessly integrated into the workflow. Our e-solicitation and IRS validations ensure that new or updated information flows directly into reporting processes, delivering accurate recipient data and protection against penalties and backup withholding.
