The US Internal Revenue Service (IRS) announced a one-year delay to implement New tax reporting requirements for cryptocurrencies. It is now scheduled to enter into force on January 1, 2026.
the The postponement gives brokers more time to adapt to regulations, which focus on setting the cost basis of cryptocurrencies on centralized platforms.According to Official announcement.
Starting Completed in July 2024 by the IRS and Department of the Treasury, Rules It aims to standardize how cryptocurrency sales are reported.
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Early cryptocurrency purchases may result in higher taxes
If investors do not choose a specific accounting method, the first-in, first-out (FIFO) approach is automatically applied. This method takes into account the oldest acquired crypto assets like Sold first. It can have significant tax implications, especially in a bull market.
Shehan Chandrasekera, head of tax strategy at CoinTracker, pointed out the practical challenges facing the FIFO mandate. Most CeFi brokers lack systems to support specific definitional accounting, where users choose which units of cryptocurrency they want to sell.
Without this possibility, cryptocurrency investors would be forced to follow the FIFO rule. Which means they may incur higher capital gains taxes by inadvertently selling assets at a lower cost.
Chandrasekera described this scenario as “catastrophic”, especially in a bullish market environment. He said it would maximize tax liabilities for many investors.
3/ The IRS recognized this issue and issued a temporary transition relief (Notice 2025-7), today.
This means that if you are selling assets within a CeFi broker, you can still use your books and records/crypto tax software to document the specific unit you are selling.
You don’t have to be…
– Sheehan (@TheCryptoCPA) December 31, 2024
The IRS’s decision to delay implementation provides temporary relief. It allows brokers to enhance their platforms to support alternative accounting methods before the 2026 deadline.
Meanwhile, the Blockchain Association, the Decentralized Education Fund, and the Texas Blockchain Council have filed a lawsuit against the IRS, challenging another rule that would require brokers to store and report users’ personal information and trading history starting in 2027.
The groups argue that these requirements, which extend to decentralized exchanges (DEXs), are unconstitutional.
Under the disputed rules, the mediators He was be binding to Reporting taxpayer identities and gross proceeds from digital asset transactions. Critics assert that this action violates user privacy and could have far-reaching implications for the cryptocurrency industry.
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The IRS reaffirms that staking rewards are taxable
Last month, the IRS reiterated Her attitude That signing bonuses are taxable income when received, rejecting claims that they should be treated as new property and only taxed upon sale.
The clarification came amid a legal challenge from Joshua and Jessica Garrett, who argue that bonuses accumulated should not be taxed until… They are Sold or exchanged.
at that time, The IRS denied Garrett’s assertions. The IRS claimed that staking bonuses should be reported as income based on their fair market value at that time The taxpayer gains the ability to sell or otherwise dispose of it.
The agency cited Revenue Resolution 2023-14 as the basis for its position. “Revenue Ruling 2023-14 requires taxpayers who receive betting bonuses to report the bonuses as income at their fair market value,” the IRS said.
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