White House Mulls IRS CARF Crypto Reporting and 1099-DA
The White House is reviewing an IRS proposal to adopt the OECD’s Crypto-Asset Reporting Framework (CARF), aiming to align U.S. crypto tax reporting with over 72 countries committed to CARF by 2028. Under the plan, which would begin data sharing in 2027 among more than 50 jurisdictions including G7 members, the IRS would gain access to Americans’ offshore crypto accounts. U.S. taxpayers would face stricter disclosure requirements for capital gains on foreign crypto platforms, helping curb offshore tax evasion without disadvantaging domestic firms.
In addition, the IRS will launch Form 1099-DA in January 2026, mandating U.S. exchanges to report detailed digital asset transactions. Crypto tax attorney Clinton Donnelly warns this marks the end of on-chain anonymity. With enhanced reporting and integrated data, the IRS can scan blockchain networks to identify unreported activity and target audits at scale. Crypto traders should monitor these crypto tax reporting changes for their impact on compliance costs and cross-border asset flows.
Neutral
While the CARF framework and Form 1099-DA will significantly tighten crypto tax reporting and curb offshore tax evasion, they do not directly influence market demand or token valuations. In the short term, increased compliance requirements may add administrative burden and deter some offshore trading, but in the long term, clearer regulations can enhance market legitimacy and investor confidence. Overall, the net impact on crypto prices is expected to be neutral.