To be honest, 2025 was the turning point in the taxation of cryptocurrencies – everything has changed dramatically. It’s about how digital assets around the world are now regulated, monitored and, importantly, controlled. It turned out to be such a cocktail of technological breakthrough, maturity of regulators and international coordination. In general, the situation now is such that paying crypto taxes is not a matter of choice, but a strict necessity. Introduction of Form 1099-DA, international standards like
CARF and DAC8, the strengthening of the IRS and new tracking technologies in the blockchain — all this means that the era of the “Wild West” in cryptography is over. We can say that total state supervision is beginning.
What’s going on with regulation in 2025?
Form 1099-DA: Now everything is serious
Well, here are the new rules for this very
form 1099-DA (something like “Income from digital assets through a broker”) they start operating for transactions as early as 2025. To put it simply, all American crypto brokers – exchanges, payment systems, even wallet providers — are required to monitor and report on transactions with crypto. The first reports are expected by early 2026, and they will relate to transactions in 2025.
The scale, of course, is huge. Any sales, exchanges, or withdrawals of cryptocurrencies through brokers must be documented with all the details: dates, asset types, amounts. Before, you could hope to get through, but now it’s unlikely. It seems to me that this is a fundamental shift.
And starting in 2026, brokers will also report the cost of acquiring assets, so
The IRS will receive a complete picture of profits and losses, which can be automatically verified with declarations. In general, there are no more half measures.
Asset accounting: FIFO and lot selection
Another important change is that accounting requirements have been tightened. Now you need to use recognized methods, for example,
“first in, first out” (FIFO) or a method for selecting specific lots. This, of course, requires meticulous tracking of every purchase and sale — dates, cost, period of ownership. It’s not the most fun thing to do, but what can you do?
Brokers now keep records of wallets and accounts, which complicates reporting, but it more accurately reflects real profits and losses. I think this will affect millions of people who are used to transferring assets between different wallets, exchanges, and DeFi platforms. Actually, it used to be easier.
International coordination: CARF and DAC8
Global Reporting System (CARF)
OECD Crypto Asset Reporting Framework (CARF) — you know, this is such an ambitious international venture to increase tax transparency. By 2025, 63 jurisdictions have already committed to implementing it by 2027-2028. This will create a global network for the automatic exchange of information about cryptotransactions.
CARF obliges crypto service providers to collect and transfer a lot of user data: personal data, account balances, and the entire transaction history. Special emphasis is placed on cross—border transactions to prevent tax evasion through the movement of cryptocurrencies between countries.
But it is important to understand that these are still plans, and full implementation is still ahead.
DAC8: Europe is getting ready
The eighth amendment to the EU Directive on Cooperation (DAC8) — this is, in principle, the European preparation for CARF. It was adopted back in October 2023, and the EU member states must implement it into national laws by the end of 2025. It should start working fully on January 1, 2026.
DAC8 plans to expand the automatic exchange of information to include all transactions with crypto assets. Service providers in the EU will report on both domestic and cross—border transactions, with user details, transaction histories, and balances. The exchange of this data between the EU tax authorities will probably begin in 2027.
Again, these are future commitments that are just beginning to materialize.
The IRS is gaining strength: law enforcement is reaching a new level
$80 billion and 87,000 new agents
Perhaps the most significant factor is the dramatic strengthening of the IRS.
The Inflation Reduction Act has given the IRS a fantastic $80 billion over ten years, of which $45.6 billion is devoted specifically to law enforcement.
The recruitment of 87,000 new agents is particularly impressive, with cryptocurrencies identified as a key area. By the way, these agents are specially trained in blockchain analysis and digital asset tracking methods. So the IRS can now track transactions that were previously considered anonymous — that’s the twist.
New technologies: blockchain and AI analysis
The enhanced IRS uses
advanced blockchain analysis tools and artificial intelligence to identify tax evasion schemes. The agency collaborates with companies such as Chainalysis to analyze transactions on public blockchains and link anonymous wallets to real people.
The IRS electronic payment monitoring program now includes virtual currencies, which allows you to combine exchange data with blockchain analysis and create detailed financial profiles of users. It looks a little scary, but it is what it is.
Fines and criminal charges: the consequences have become more serious
Financial penalties
Fines for violations in the field of cryptography have become so severe that they can simply ruin the violator.
In the United States, deliberate tax evasion on crypto can result in a fine of up to $250,000 plus jail.
For less serious offenses, the IRS can fine you between $10,000 and $250,000, depending on the severity and intent. By the way, the agency has introduced automatic calculation of fines specifically for violations related to cryptocurrencies.
Criminal liability
The transition from civil to criminal cases is probably the most serious change.
In March 2024, the IRS filed the first charges based solely on non-payment of taxes on income from cryptocurrencies. This is, one might say, a signal of the beginning of a new era.
The Department of Justice reports hundreds of similar cases under preparation — crypto tax evasion has become a priority for federal prosecutors. Actually, it smells fried.
What’s in the world? Global trends
Compliance with tax regulations
Worldwide, there has been an increase — albeit uneven — in voluntary compliance with crypto tax laws.
Various studies show that people have become more likely to declare crypto — especially after increased monitoring and awareness-raising.
In the United States, for example, more and more taxpayers indicate transactions with digital assets in their declarations, especially after a special question appeared there.
The picture is similar in the UK, where HMRC is actively detecting violations.
International cooperation
The preparation for the implementation of global reporting standards opens up unprecedented opportunities for coordination between tax authorities.
From 2026-2027, it is planned to automatically exchange data on cryptotransactions between countries. This means that it will become almost impossible to hide assets by moving them between jurisdictions.
The EU is particularly active here. The German tax authorities, for example, are already conducting checks on transactions from previous years — that is, cryptotransactions can be auctioned off after a long time.
Technologies on guard of taxes
Blockchain Analysis
Artificial Intelligence
The IRS has announced plans to use AI to identify verifiable declarations, including those involving crypto transactions. These systems can find discrepancies between reported revenues and transaction patterns on the blockchain, automatically setting audit targets. In general, the machines are also connected to the case.
What should investors do? Strategic conclusions
The era of transparency
The main consequence of the changes in 2025 is the transition to much greater tax transparency in the cryptosphere. The combination of broker reporting, international coordination (albeit planned), advanced tracking technologies, and enhanced controls means that tax authorities now have powerful tools to detect violations.
Compliance as risk management
Given the severity of the fines and the growing detection opportunities, compliance with tax laws has become a matter of risk management. The potential consequences of violations — huge fines, criminal cases, prison — can be much worse than the tax obligations themselves.
Tax consultants are increasingly advising proactive strategies — for example, voluntarily declare previously hidden transactions, set up an accounting system and regularly consult with experts on taxation of digital assets. In general, it’s better to be safe.
Instead of a conclusion
The year 2025 is indeed a turning point. The era of strict regulation, enhanced supervision and control is beginning. The launch of the 1099-DA form, preparation for international CARF and DAC8 standards, strengthening of the IRS, and new tracking technologies all make tax compliance critically important for anyone dealing with digital assets.
With the control capabilities that are growing and the planned automatic exchange of information in the coming years, many investors risk facing serious consequences, both financial and criminal. The window of opportunity for “voluntary correction” is gradually closing.
So the conclusion is, in general, simple: in 2025, crypto taxes should be taken extremely seriously. The period of uncertainty is over, replaced by an evolving regulatory system with powerful monitoring tools and serious resources to ensure compliance. Jokes aside, as they say.
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