A service that keeps track of cryptocurrency transactions for IRS compliance. There are dozens of crypto tax reporting organizations that offer free and paid services. In 2014, the IRS ruled that crypto should be treated like stocks and bonds, and in 2022, crypto exchanges were required to submit records of income and capital gains to the IRS. See 1099-DA
Traders create numerous transactions throughout the year, and similar to high-frequency stock trading, high-frequency crypto traders create millions of transactions that have to be monitored for compliance. These services are able to extract the data because of the programming interfaces (APIs) that exist between the crypto exchanges and wallets. With the user's consent, the service is able to tap into and keep track of the trades.
A Node40 Example
After opening a free account with the Node40 tax service, users identify their custodial wallet accounts, and Node40 extracts their balances. See cryptocurrency wallet