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. 

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

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.

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“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