Regulatory Roundup 2025: CRS 2.0, CARF and 1099-DA, From Preparation to Execution

For decades, tax transparency has evolved incrementally, but this year marks the convergence of three transformative frameworks creating a lot of operational urgency: CRS 2.0, CARF, and Form 1099‑DA. In 2025, global tax transparency moved from planning toward execution. Institutions laid the groundwork by conducting gap assessments, upgrading systems, and piloting new processes.

Now, the time for preparation is running out. In 2026, these rules go live: CRS 2.0 expands reporting obligations, CARF ushers crypto assets into the global transparency net, and 1099‑DA begins its first U.S. filing season. As the calendar flips, the focus shifts from readiness to delivery: CRS 2.0 policy goes live, CARF data collection begins in many jurisdictions, and 1099‑DA enters its inaugural filing season.

Together, these items redefine how financial institutions, brokers, and service providers manage data, validate identities, and ensure compliance. This is the year tax reporting moves from a back-office function to a strategic compliance imperative.

2025: The Build-up Year

CRS 2.0 finalization and practical guidance

Throughout 2025, institutions prepared for the most substantive changes to CRS since 2014: expanded scope (e‑money/CBDCs as Depository Accounts; crypto exposure captured via investment entities), strengthened due diligence, and new reportable data elements (valid self‑certification indicator, account type, joint holder count, new vs. pre‑existing, controlling‑person roles).

The OECD’s CARF User Guide prompted jurisdictions to finalize legislation by end of 2025, enabling data collection from Jan 1, 2026 and first exchanges in 2027. Institutions began designing onboarding, due diligence, and reporting architectures that align with CARF while minimizing duplication with CRS.

The 1099‑DA U.S. digital asset reporting begins.

The final regulations under Section 6045 set Jan 1, 2025 as the start for brokers to report gross proceeds on Form 1099‑DA (with transitional relief). Teams focused on customer TIN capture/matching, payee statements, and wallet‑level basis tracking to support future basis reporting. Recognizing the operational lift, the IRS extended transitional relief on backup withholding for digital‑asset sales through 2026, and provided targeted relief mechanisms for 2027.

The IRS drafted a new 2026 W‑9, with changes that digital asset brokers began planning around in late 2025: a new checkbox for brokers’ exemption under §1.6045‑1, and a new exempt payee code (Code 14) for backup‑withholding relief through 2026. These updates were framed as foundational to Form 1099‑DA roll‑out and Section 3406 backup withholding processes, prompting brokers to shore up TIN collection/matching in 2025.

2026: What’s changing and what to deliver

CARF: Go‑live for data collection

In many jurisdictions, CARF due diligence and data capture begins Jan 1, 2026, with first filings/exchanges in 2027. CARF focuses on transactional data (fiat↔crypto, crypto↔crypto, transfers) and applies to Reporting Crypto‑Asset Service Providers (RCASPs) with defined nexus rules. Some countries have delayed the implementation for their impacted service providers; however, other jurisdictions, like the Cayman Islands, have confirmed CARF and CRS 2.0 effective Jan 1, 2026, with first filings due in 2027, illustrating the pace of local adoption and operational specifics.

CRS 2.0: Policy is in force

From Jan 1, 2026, institutions must capture and report the new CRS data elements and apply enhanced due‑diligence standards while leveraging an optional CRS/CARF switch‑off for duplicative gross‑proceeds reporting. The CRS XML Schema v3.0 (User Guide v4.0) released by the OECD in Oct 2024 is being adopted for exchanges in 2027 covering 2026 data, driving upgrades in validation, enumerations, and audit trails.

Form 1099‑DA (U.S.)

Filing season kicks off beginning January 2026, brokers furnish/file 1099‑DA for 2025 transactions, reporting gross proceeds. For 2026 transactions (filed in 2027), brokers must report both gross proceeds and cost basis for covered digital assets. Thanks to Notice 2025‑33, brokers are not penalized for failing to withhold backup tax on digital‑asset transactions in 2025 and 2026; targeted relief applies in 2027 when brokers use TIN Matching for pre‑2026 accounts and immediately liquidate withheld assets to cash. Brokers should begin to rely on the updated W-9 to document exemption status once the IRS has published the new revisions as FINAL.

What this means for compliance leaders in 2026

Harmonize CRS 2.0 and CARF: Treat CRS (accounts) and CARF (crypto transactions) as one operating program. There is a need to automate and standardize self‑certification intake, classification logic, and data lineage to avoid duplicative reporting and audit friction.

Strengthen TIN & withholding controls for digital assets: Firms should use the IRS TIN Matching Program, codify backup‑withholding playbooks (valuation, in‑kind liquidation), and align 1099‑DA reporting with wallet‑level basis tracking.

Upgrade to CRS XML v3.0 and audit‑ready reporting: schema validation, updated enumerations, and new data fields require end‑to‑end testing and evidence of curing indicia—especially for pre‑existing accounts moving into the 2026 reporting scope.

If 2025 laid the groundwork. 2026 is the execution year. Organizations that harmonize CRS 2.0 and CARF, and operationalize 1099‑DA with TIN controls will be best placed to meet rising expectations for transparency, data quality, and auditability.

How TAINA supports end‑to‑end readiness

• CRS 2.0 & CARF onboarding and validation: TAINA captures the new CRS reportable fields, validates self‑certs with more AML/KYC alignment cross-checks, and streamline CARF due diligence for RCASPs.

• 1099‑DA data pipelines: integrate US TIN‑matching & identify backup‑withholding helping firms be ready for 2027.

• Audit‑ready reporting and remediation: Reduce manual effort, improve data quality, and accelerate remediation across CRS, CARF, and FATCA, backed by proven performance recognized in industry rankings.

If you’d like help operationalizing CRS 2.0, CARF, or 1099‑DA, from onboarding and validation to audit‑ready reporting, get in touch or request a demo and our team will show you how TAINA can simplify complexity and accelerate compliance.