The Internal Revenue Service (IRS) is taking significant steps to enhance tax compliance in the cryptocurrency sector with the introduction of a new reporting regime. According to the results published in the material, this initiative, set to roll out in the coming years, aims to streamline the reporting process for crypto transactions and reduce discrepancies that have plagued the agency in the past.
New IRS Reporting Requirements for Cryptocurrencies
Starting in 2025, the IRS will require gross proceeds reporting for dispositions of cryptocurrencies, marking a pivotal shift in how crypto transactions are documented. This change is expected to provide clearer guidelines for taxpayers and help the IRS better track crypto-related income. Additionally, beginning in 2026, the agency will implement basis reporting for covered securities, further refining the reporting process for taxpayers involved in crypto trading.
Concerns Over Cost Basis Reporting Accuracy
Despite the potential benefits of this new regime, concerns have been raised regarding the accuracy of cost basis reporting by exchanges. If exchanges fail to capture this critical information correctly, it could lead to increased confusion among taxpayers and result in further mismatches in reporting. As the IRS moves forward with these changes, the crypto community will be closely monitoring how these regulations are implemented and their impact on tax compliance.
Currently, the SEC is preparing for a significant public crypto roundtable on October 17, which aims to enhance discussions around cryptocurrency regulation. For more details on this upcoming event, see the full announcement here.
