IRS expands cryptocurrency monitoring scope, shifting from targeted investigations to near-real-time blockchain tracking

According to ChainCatcher, according to Decrypt, the IRS (IRS) has continued to expand its scope of cryptocurrency monitoring since 2017, shifting from targeted investigations to near-real-time blockchain tracking. According to tax attorney David Klasing, IRS obtained user data from multiple exchanges through the "JohnDoe subpoena", including Coinbase, Kraken, etc., and seized cryptocurrency worth US$3.5 billion in 2021, accounting for 93% of the total assets seized that year. The 2024 report of the Ministry of Finance’s Tax Administration (TIGTA) shows that 75% of cryptocurrency users identified through exchange data have potential tax non-compliance. IRS launched 216 reviews in 2023 and sent nearly 15,000 "soft letters" reminders to users. The new 1099-DA reporting system will be implemented in 2025, requiring reporting of disposal income and increasing basic information declaration from 2026. Privacy advocates lost in the Supreme Court in July, failing to challenge the legitimacy of the IRS to obtain Coinbase data through subpoena. Although the Trump government removed the DeFi broker reporting rules, centralized exchanges are still subject to full reporting obligations.