1099-DA, Broker Reporting, and the Future of Crypto Tax Compliance with Jessalyn Dean

A conversation with Jessalyn Dean, Managing Director of Dune Consultants, discussing Form 1099-DA implementation, broker reporting obligations, customer-provided acquisition information (CPAI), crypto tax reconciliation, international reporting frameworks, CARF, privacy concerns, and the future of digital asset tax compliance. Host: Patrick Camuso, CPA, Camuso CPA Guest: Jessalyn Dean, Managing Director, Dune Consultants

Editor’s Note

The following transcript has been lightly edited for publication. Grammar, punctuation, and transcription errors have been corrected for readability. The substance of the conversation has been preserved.

Transcript

Patrick Camuso, CPA 00:03

Welcome to the latest episode of The Financial Frontier. I’m your host, Patrick Camuso. We’re continuing our series of conversations today about Form 1099-DA. This is going to be one of the most important topics as we move into 2026. I’m very excited to introduce our guest today, who has a wealth of knowledge on this topic. Our guest today is Jessalyn Dean, Managing Director of Dune Consultants. Jessalyn, thanks for joining us today.

Jessalyn Dean 00:35

Happy to be here.

Patrick Camuso, CPA 00:39

To get started, can you give us some perspective on Form 1099-DA? What is the experience going to be like for a cryptocurrency user compared to prior years? What should taxpayers expect?

Jessalyn Dean 00:50

I think this is a really pivotal year. For the first time, taxpayers in the United States are going to receive Form 1099-DA reporting sales and exchanges of digital assets. Practically speaking, we’re talking about cryptocurrency. In years past, taxpayers generally did not receive information reporting specifically for these sales and exchanges. In some cases, taxpayers received Forms 1099-B if they were using platforms connected to more traditional financial institutions. But by and large, this will be the first time taxpayers receive dedicated reporting for these transactions. Many taxpayers are going to be awakened to the reality of exactly what information the IRS has regarding their larger taxable cryptocurrency transactions.

Patrick Camuso, CPA 01:44

This is something that both of us, along with many other professionals, have been focused on all year. But now taxpayers are actually going to start receiving these forms. For many people, this will be the first time they truly focus on the reporting implications. They’re going to begin asking questions like:

• What do I need to do?
• How do I reconcile this information?
• How does this affect my tax return?

What are some of the things taxpayers should be doing differently today to remain compliant? And what challenges do you think they’ll face once these forms start arriving?

Jessalyn Dean 02:16

Maybe as a backdrop, it’s helpful to explain where my perspective comes from. You and I are both CPAs, but we sit on different sides of this conversation. You largely work with taxpayers and their compliance obligations. I work primarily with brokers and exchanges that actually need to issue these Forms 1099-DA. So my perspective comes from understanding:

• What taxpayers will receive
• What taxpayers won’t receive
• What brokers can report
• What brokers cannot report

And then personally, I also experience these issues as a taxpayer myself. That gives me visibility into the entire lifecycle of these reporting obligations and the downstream consequences they create.

Patrick Camuso, CPA 03:02

How do you think about the different groups of taxpayers entering this reporting environment?

Jessalyn Dean 03:08

There are many ways to segment cryptocurrency users, but one framework I find useful divides them into two broad groups. The first group is what we might call crypto natives. These are individuals who have been active in cryptocurrency for many years. Some of them may have owned cryptocurrency before ever owning traditional financial assets. They didn’t start by buying Apple stock or index funds. They started with crypto. The second group is everybody else. These are individuals who either:

• Started in traditional finance and later adopted crypto
• Are relatively newer to digital assets
• Have less complex transaction histories

Patrick Camuso, CPA 03:50

And those groups are likely going to experience Form 1099-DA very differently.

Jessalyn Dean 03:55

Absolutely. For the second group, I actually think the transition will be relatively smooth. They’re probably the easiest compliance category. An often-cited estimate suggests that approximately 80% of cryptocurrency users buy, hold, and sell their assets within a single platform. For those taxpayers, Form 1099-DA is going to be extremely useful. During year one, the form generally reports proceeds but not cost basis. In future years, cost basis reporting will become more common. Those individuals will likely continue using their existing software or tax advisors and simply incorporate the new information into their filing process.

Patrick Camuso, CPA 04:39

The real challenge exists in the remaining group.

Jessalyn Dean 04:42

Exactly. The remaining 20% are what I would consider crypto natives. These are individuals who:

• Use multiple exchanges
• Transfer assets between platforms
• Use self-hosted wallets
• Participate in DeFi
• Have more complex transaction histories

Historically, these taxpayers relied heavily on crypto tax aggregation software. They would import activity from multiple sources, calculate gains and losses, and self-report the results. There was relatively little third-party information available to challenge those calculations.

Patrick Camuso, CPA 05:20

And that dynamic changes significantly beginning in 2026.

Jessalyn Dean 05:25

Exactly. Historically, taxpayers calculated their own gains and losses. The IRS largely lacked independent reporting information to compare against those calculations. Beginning with Form 1099-DA, the IRS may now have different information than the taxpayer. That means taxpayers become responsible for reconciling those differences. In my view, reconciliation becomes the single most important compliance issue going forward.

Patrick Camuso, CPA 05:54

And that’s going to create a lot of friction because many taxpayers won’t receive complete cost basis information.

Jessalyn Dean 06:02

That’s exactly right. For many taxpayers, year one forms will not include cost basis information. Even in future years, there will be situations where brokers cannot accurately report basis because they don’t possess the necessary information. So taxpayers should not assume that receiving a Form 1099-DA eliminates their recordkeeping responsibilities. Quite the opposite. In many situations, taxpayers will still need to:

• Maintain records
• Track transfers
• Calculate basis
• Reconcile reported information

Those responsibilities aren’t going away.

Patrick Camuso, CPA 06:36

And that’s where many taxpayers are likely underestimating the complexity. They’re going to receive a tax form and assume it’s complete.

Jessalyn Dean 06:45

Exactly. Many taxpayers will assume that if they receive a tax form, the information must be complete and final. But that’s not necessarily true. Form 1099-DA is an important step forward. However, it doesn’t eliminate the need for taxpayer involvement. Especially for individuals operating across multiple platforms, wallets, and ecosystems. For those taxpayers, reconciliation remains critical.

Patrick Camuso, CPA 06:58

One of the issues we’re going to see repeatedly is taxpayers receiving Forms 1099-DA that they don’t view as fully accurate. Particularly because cost basis reporting is still limited. What should brokers be doing from a communication perspective to prepare customers for that reality?

Jessalyn Dean 07:15

There are really two major components. One is something every platform can do. The second is something some platforms may choose to do, but many won’t. The first component is communication. Platforms need to communicate clearly with customers regarding:

• Which forms they will receive
• Which forms they won’t receive
• What information is included
• What information is excluded
• Why certain information may be missing
• Whether amended forms will be available

Communication tends to get pushed toward the end of implementation projects. That’s unfortunate because communication is one of the most important pieces of a successful reporting program.

Patrick Camuso, CPA 07:57

Taxpayers are going to have a lot of questions.

Jessalyn Dean 08:00

Absolutely. You can spend five minutes browsing crypto-related discussions online and immediately see the confusion surrounding tax reporting. Platforms should already be communicating:

• What tax season will look like
• What forms customers should expect
• Important reporting dates
• Common limitations
• Frequently asked questions

And when forms are delivered, those communications should be integrated directly into the process. The customer shouldn’t have to go hunting for answers.

Patrick Camuso, CPA 08:32

And the second component?

Jessalyn Dean 08:35

The second component involves what we call Customer-Provided Acquisition Information, or CPAI. CPAI refers to information provided by the customer that helps a broker determine the correct tax basis and lot selection for a transaction. This becomes incredibly important when brokers don’t possess complete acquisition information.

Patrick Camuso, CPA 08:59

Which is going to be common.

Jessalyn Dean 09:01

Very common. Many taxpayers are going to dispose of assets that originated somewhere else. Maybe the asset was:

• Purchased on another exchange
• Acquired years ago
• Held in self-custody
• Moved through multiple wallets

The broker may see the disposition. But they may not know the acquisition history. Without acquisition history, the broker cannot reliably determine which tax lot is being sold.

Patrick Camuso, CPA 09:31

And that’s where lot ordering becomes critical.

Jessalyn Dean 09:35

Exactly. If a taxpayer wants to use:

• HIFO
• FIFO
• LIFO
• Specific Identification

The broker needs sufficient information to determine which lot is actually being disposed of. If the broker lacks acquisition information, then even something as simple as HIFO becomes impossible because the broker doesn’t know which asset has the highest basis.

Patrick Camuso, CPA 10:01

Many taxpayers probably assume brokers already have this capability.

Jessalyn Dean 10:06

Many do. But that’s not necessarily true. CPAI is optional. Brokers are permitted to accept customer-provided acquisition information. They are not necessarily required to offer that functionality. And implementing those systems is extremely difficult.

Patrick Camuso, CPA 10:26

What makes it so difficult?

Jessalyn Dean 10:29

The infrastructure requirements are substantial. You need systems capable of:

• Receiving customer data
• Validating customer data
• Associating that data with transactions
• Applying lot ordering rules
• Maintaining audit trails

That’s a major undertaking. Some brokers may not have those systems ready. Others may choose not to offer them at all.

Patrick Camuso, CPA 10:55

Which means taxpayers could receive forms that don’t reflect the lot selection methodology they actually prefer.

Jessalyn Dean 11:03

Exactly. And that becomes a very important issue for reconciliation. Taxpayers need to understand:

• What methodology the broker used
• What information the broker had available
• Whether CPAI was accepted
• Whether CPAI was incorporated

Because all of those factors influence the resulting Form 1099-DA.

Patrick Camuso, CPA 11:27

It’s really a two-part challenge. The broker needs acquisition information. And the broker needs to know which tax methodology should apply.

Jessalyn Dean 11:35

That’s exactly right. Both pieces matter. And both require interaction between the taxpayer and the broker. That’s where much of the friction will occur over the next several years.

Patrick Camuso, CPA 11:50

And based on what you’re seeing, many brokers aren’t fully prepared to accommodate that today.

Jessalyn Dean 11:57

Correct. Some are making tremendous progress. Others are still building infrastructure. And some may determine that the cost and complexity outweigh the immediate benefit. So taxpayers shouldn’t assume every platform will offer identical capabilities.

Patrick Camuso, CPA 12:16

Which means the reconciliation burden ultimately falls back on the taxpayer.

Jessalyn Dean 12:21

Exactly. Regardless of what brokers report, taxpayers remain responsible for filing accurate returns. That’s why understanding what the broker reported, why it was reported, and how it compares to taxpayer records becomes so important.

Patrick Camuso, CPA 12:40

And that’s a challenge both taxpayers and tax professionals need to start preparing for now.

Jessalyn Dean 12:45

Absolutely. The reconciliation challenge isn’t theoretical. It’s arriving with the first wave of Forms 1099-DA. And it’s going to remain one of the defining issues of crypto tax compliance for years to come.

Patrick Camuso, CPA 13:02

One issue that keeps coming up in conversations with practitioners is what reconciliation actually looks like in practice. Historically, taxpayers would import all of their activity into crypto tax software, generate reports, and file based on those reports. Now we’re introducing Forms 1099-DA into that process. How do you see those systems interacting?

Jessalyn Dean 13:25

That’s probably one of the most important questions in the industry right now. Historically, crypto tax software existed largely in its own ecosystem. The software aggregated transactions. Calculated gains and losses. Generated tax reports. And taxpayers filed based on those outputs. Now we have a second source of information entering the process. Broker-reported information. That means taxpayers need systems capable of comparing:

• Taxpayer calculations
• Broker calculations
• Reported proceeds
• Reported basis
• Transfer histories
• Lot identification decisions

The challenge is no longer simply calculating gains. The challenge is reconciling multiple data sources.

Patrick Camuso, CPA 14:09

And reconciliation isn’t necessarily something most retail investors understand.

Jessalyn Dean 14:14

Exactly. Most taxpayers assume tax reporting is simply a matter of importing transactions and generating a form. Reconciliation requires a completely different mindset. Now we’re asking questions such as:

• Why does my calculation differ from the broker?
• Which calculation is correct?
• What information was available to each party?
• How should differences be documented?

Those are accounting questions. Not software questions.

Patrick Camuso, CPA 14:43

One thing I’ve noticed is that some taxpayers assume they’ll simply override whatever the broker reports.

Jessalyn Dean 14:50

That’s a dangerous assumption. If a taxpayer’s calculation differs from the broker’s calculation, there should be a reason. And that reason should be documented. The goal isn’t simply changing numbers until they match a preferred outcome. The goal is understanding why differences exist.

Patrick Camuso, CPA 15:11

Because eventually those differences may need to be explained.

Jessalyn Dean 15:15

Exactly. Particularly as automated matching programs become more sophisticated. If the IRS receives information from a broker and the taxpayer reports something different, the taxpayer should be prepared to explain the discrepancy.

Patrick Camuso, CPA 15:34

What role do you think data standards play in solving this problem?

Jessalyn Dean 15:40

A huge role. One area I’m particularly interested in is the Financial Data Exchange, or FDX. FDX has already done significant work creating standardized methods for sharing financial information between institutions. The more standardized data becomes, the easier reconciliation becomes.

Patrick Camuso, CPA 16:05

Because right now everyone speaks a different language.

Jessalyn Dean 16:09

Exactly. Every platform exports data differently. Every platform structures records differently. Every platform categorizes transactions differently. Standardization reduces friction.

Patrick Camuso, CPA 16:23

One thing practitioners frequently discuss is Form 8949 adjustments. Historically, it wasn’t uncommon to see large adjustment entries used to force reports into alignment.

Jessalyn Dean 16:36

That’s one area where I think taxpayers and practitioners need to exercise caution. An adjustment isn’t inherently problematic. There are many legitimate reasons adjustments may be necessary. But adjustments should be traceable. There should be documentation. There should be an explanation. There should be support.

Patrick Camuso, CPA 17:00

In other words, not simply a plug number.

Jessalyn Dean 17:03

Exactly. The phrase “plug adjustment” tends to make accountants nervous for good reason. A reconciliation should produce an audit trail. Someone reviewing the return should be able to understand:

• What changed
• Why it changed
• What evidence supports the change

Without that documentation, the adjustment becomes much harder to defend.

Patrick Camuso, CPA 17:29

And that’s especially true when dealing with crypto activity spanning multiple years.

Jessalyn Dean 17:35

Absolutely. Many crypto taxpayers have basis histories extending back years. A difference appearing on a 2026 return may actually originate from a transaction that occurred in 2018 or 2019. That’s why documentation matters so much.

Patrick Camuso, CPA 17:57

So when people talk about reconciliation, they’re really talking about building an evidence trail.

Jessalyn Dean 18:04

That’s exactly how I think about it. The objective isn’t merely arriving at a number. The objective is producing a supportable number. A number that can be explained. A number that can be documented. A number that can withstand scrutiny.

Patrick Camuso, CPA 18:23

And that’s going to become increasingly important as reporting expands.

Jessalyn Dean 18:28

Without question. The industry is moving toward greater transparency. Greater reporting. Greater information sharing. As those developments continue, the quality of reconciliation becomes increasingly important.

Patrick Camuso, CPA 18:44

One topic that often gets overshadowed by Form 1099-DA is what is happening internationally. At the same time the United States is implementing broker reporting, other jurisdictions are building reporting systems as well. How should taxpayers think about that broader trend?

Jessalyn Dean 19:00

I think it’s incredibly important. Many people view Form 1099-DA as a uniquely American development. In reality, we’re seeing a global movement toward digital asset reporting. One of the most significant developments is the OECD’s Crypto-Asset Reporting Framework, commonly known as CARF. CARF creates a framework for cross-border reporting and information exchange between participating jurisdictions.

Patrick Camuso, CPA 19:30

In some ways, CARF does for crypto what other international reporting frameworks did for bank accounts and financial assets.

Jessalyn Dean 19:37

That’s exactly right. Governments increasingly recognize that digital assets are global by nature. People transact across borders. Assets move across borders. Platforms operate across borders. As a result, governments want reporting systems that operate across borders as well.

Patrick Camuso, CPA 20:01

Do you think most taxpayers appreciate how much information sharing may exist in the future?

Jessalyn Dean 20:08

Probably not. Many people still think about cryptocurrency through the lens of anonymity. The reality is that the reporting environment is moving toward greater transparency. That doesn’t mean every transaction is automatically visible everywhere. But the overall direction is clear. Governments want more information. More standardization. More consistency. And more cooperation.

Patrick Camuso, CPA 20:37

That naturally raises privacy concerns. How do policymakers balance privacy with compliance?

Jessalyn Dean 20:45

It’s one of the central challenges. Privacy matters. Consumer protection matters. Compliance matters. Innovation matters. Those objectives occasionally compete with one another. The challenge for policymakers is finding frameworks that balance those competing interests. Different jurisdictions will likely approach that balance differently.

Patrick Camuso, CPA 21:12

When you look ahead five to ten years, what do you think crypto tax reporting looks like?

Jessalyn Dean 21:19

I think reporting becomes substantially more standardized. I think data sharing improves. I think basis reporting improves. I think reconciliation tools improve. And I think taxpayers gradually become more accustomed to digital asset reporting in the same way they became accustomed to traditional financial reporting.

Patrick Camuso, CPA 21:44

So perhaps less chaos and more infrastructure.

Jessalyn Dean 21:48

Exactly. The current environment feels disruptive because so many systems are being built simultaneously. But eventually those systems mature. Processes become standardized. Expectations become clearer. And compliance becomes more routine.

Patrick Camuso, CPA 22:08

If you could give taxpayers one piece of advice heading into this transition, what would it be?

Jessalyn Dean 22:15

Don’t wait until tax season. Review your records now. Understand where your assets originated. Understand how assets moved between platforms. Preserve documentation. And familiarize yourself with the reporting systems you’re likely to encounter. The taxpayers who prepare early will have a much easier experience than those trying to reconstruct everything later.

Patrick Camuso, CPA 22:44

And for brokers and exchanges?

Jessalyn Dean 22:48

Communicate. Communication is one of the most important aspects of implementation. Customers need to understand:

• What they’re receiving
• What they’re not receiving
• Why information may be incomplete
• What actions they may need to take

The more transparent that communication is, the smoother the transition becomes.

Patrick Camuso, CPA 23:15

One thing that stands out from this conversation is that Form 1099-DA isn’t the end of crypto tax compliance. It’s really the beginning of a much larger reporting ecosystem.

Jessalyn Dean 23:25

I think that’s exactly right. 1099-DA is an important milestone. But it’s really one component of a much broader transformation involving:

• Reporting
• Data sharing
• Basis tracking
• Reconciliation
• International coordination

The industry is still in the early stages of that evolution.

Patrick Camuso, CPA 23:51

Jessalyn, this has been an outstanding discussion. We covered Form 1099-DA, broker reporting obligations, CPAI, lot identification, reconciliation challenges, FDX, CARF, privacy concerns, and the future of digital asset tax reporting. Thank you for joining us and sharing your perspective.

Jessalyn Dean 24:15

Thank you for having me. I really enjoyed the conversation.

Patrick Camuso, CPA 24:20

And thank you to everyone listening. As digital asset reporting continues evolving, understanding the infrastructure behind these rules becomes increasingly important for taxpayers, advisors, brokers, and builders alike. If you enjoyed this episode, be sure to follow The Financial Frontier for future conversations covering cryptocurrency taxation, regulation, compliance, accounting, and financial innovation. Until next time, I’m Patrick Camuso, and this has been The Financial Frontier.