Withum Unveils Cryptocurrency Cost Basis Tracking Service to Simplify Digital Asset Taxation
Financial advisory and accounting firm Withum has launched a specialized cryptocurrency cost basis tracking service designed to help investors, founders, and businesses navigate the growing complexities of digital asset taxation.
This service arrives as regulatory requirements tighten and the Internal Revenue Service (IRS) introduces new reporting mandates that significantly impact crypto tax compliance. Taxpayers now face challenges related to thousands of micro-transactions, diverse wallets and exchanges, and novel crypto events such as staking, airdrops, forks, and non-fungible token (NFT) trading. Withum’s service aims to address these challenges by offering comprehensive and audit-ready cost basis tracking and accounting support.
Addressing the Complexity of Crypto Tax Reporting
Traditional tax tracking methods fall short in the modern cryptocurrency landscape. Digital assets are decentralized and fragmented across multiple platforms, often leaving investors with incomplete transaction data and unclear tax implications. Withum’s new service consolidates transaction data from wallets and exchanges to calculate accurate cost basis using accepted accounting methods like FIFO (First In First Out), LIFO (Last In First Out), and Specific Identification.
The company emphasizes that their tracking is built to manage not only standard trades but also complex crypto events including airdrops, staking rewards, token burns, and DeFi activities such as yield farming and liquidity provision. The service provides clients with strategic tax planning tools, enabling optimal gain and loss harvesting while ensuring compliance with evolving IRS guidelines, including the new Form 1099DA reporting requirements taking effect in 2026 for the 2025 tax year.
Key Features and Clientele
Withum’s accounting team leverages advanced technology integrations and blockchain expertise to deliver:
- Automated, multi-method cost basis tracking.
- Seamless wallet and exchange data integration for comprehensive views of transaction histories.
- Transaction classification and reconciliation tailored for complex crypto events.
- Audit-resistant tax reporting adhering to IRS and international standards.
- Strategic advisory for tax liability minimization and compliance with global regulations.
The service caters to a diverse clientele including high-net-worth individuals with significant crypto exposure, crypto-native startups, family offices, wealth managers, and institutional investors. Withum highlights the urgency for taxpayers to prepare for the upcoming IRS deadlines and emphasizes that tax software and broker statements alone are insufficient for meeting new levels of regulatory scrutiny.
The Challenge: Why Crypto Accounting Requires Expertise
Withum identifies the “cost basis crisis” as a core issue for crypto founders and investors. Unlike traditional financial systems designed with traceable, standardized transactions, cryptocurrencies operate on decentralized, pseudonymous, and fragmented platforms. This creates significant difficulties in accurately calculating gains, losses, and tax liabilities.
Withum’s experts point out the multifaceted challenges investors face, such as platforms with non-uniform reporting standards, incomplete or missing data, and the lack of a standardized cost basis methodology suitable for the diverse transaction types unique to crypto assets.
Regulatory Landscape and IRS Guidance
The IRS is taking steps to enforce rigorous reporting standards on digital assets, exemplified by the release of new regulations under T.D. 10000 and Rev. Proc. 2024-28. These guidelines prohibit the use of universal cost basis methods across wallets and require specific tracking by transaction and wallet, thereby increasing complexity for taxpayers.
Form 1099DA will function similarly to traditional 1099 forms but for digital asset sales, with issuances starting in early 2026 for the 2025 tax year. This compliance pressure has made professional assistance like Withum’s necessary to avoid exposure from audits or penalties.
Industry Impact and Future Outlook
Withum’s new service reflects the broader maturation of cryptocurrency as a financial asset class transitioning from fringe innovation to mainstream finance. As digital assets continue to evolve, accounting and tax reporting services must adapt rapidly to keep pace with changing regulations and increasingly sophisticated tax enforcement.
By combining deep crypto knowledge with advanced automation and tax expertise, Withum aims to provide the financial clarity and control sought by investors and companies in the fast-changing crypto environment.
Contact Information
Interested parties can reach out to Withum’s Digital Currency and Blockchain Technology Services Team for more information and personalized consultations to ensure compliance and optimize their crypto tax posture.