Resources for founders and their finance teams

Beginning in the 2025 tax year, corporations must disclose all digital asset activity directly on Form 1120. This marks a new era of transparency for companies holding Bitcoin, Ethereum, and other digital assets. Under enhanced IRS rules and cross-referencing with Form 1099-DA, corporate taxpayers now face stricter documentation, entity-level wallet segregation, and elevated audit risk. This article explains how to comply and prepare your business for this reporting shift under IRC §11.

The first phase of crypto legal compliance begins with structured client onboarding and assessment. Under new 2025 IRS and OECD rules—including IRC §1012(c) wallet-by-wallet accounting, Form 1099-DA broker reporting, and CARF global coordination—lawyers must evaluate every client’s entity structure, digital-asset inventory, and immediate compliance risks. This article provides a framework and templates to help legal advisors build audit-ready intake systems that align with the latest regulations.

How you classify your crypto activities—as a business or an investment—determines how your income is taxed and how much risk you face during audits. With expanded IRS enforcement through Form 1099-DA and advanced blockchain analytics, consistent documentation and intent matter more than ever. This guide helps founders and traders navigate key tax distinctions under case law precedents like Groetzinger v. Commissioner and recent crypto-related rulings.