IRS May Soon Tax Americans’ Foreign Crypto: White House Review

The White House is reviewing rules to let the IRS access Americans’ foreign crypto account data by joining the global CARF, aiming to curb offshore tax evasion. The policy would increase compliance and tax liabilities for overseas crypto holders.

The White House is reviewing proposed Treasury rules that would allow the IRS to access data on Americans’ foreign cryptocurrency accounts by joining the global Crypto-Asset Reporting Framework (CARF). CARF, developed by the OECD in 2022 and adopted by over 40 countries including G7 members and major crypto hubs, aims to curb offshore tax evasion through automatic information-sharing among member nations. The proposed policy would enable U.S. tax authorities to monitor and tax Americans’ overseas crypto holdings, potentially increasing compliance requirements and tax liabilities for those with unreported assets. The White House has indicated that the regulations would not impose new reporting requirements on DeFi transactions. The global rollout of CARF is scheduled for 2027, and the administration’s advisors are currently reviewing the recommendation, which is seen as a significant step toward closing tax loopholes related to foreign-held digital assets.