Recent developments at the Internal Revenue Service have seen another high-profile departure from the digital assets division, leaving the agency without a clear leader in this rapidly expanding area of the US tax system. This comes as new tax policies are expected to lead to a significant increase in crypto-related filings. The chief of the IRS digital assets office, Trish Walker, has exited her role shortly after taking over, joining two other recently departed IRS crypto officials in transitioning to the private sector. The agency has yet to announce who will take over this critical area.
The crypto industry has been awaiting more favorable tax provisions from Congress, but for now, it must adhere to existing policies, including new forms and filings such as the 1099-DA document, which millions of people will receive for the first time from their crypto brokers. The expected surge in crypto filings for the 2025 tax year, including from taxpayers who previously did not report their income due to confusion over how to handle it, will presumably make the IRS's crypto experts highly valuable. However, the agency has been reducing its budget and personnel, with over 20,000 employees leaving, including two recent crypto departures.
This personnel reduction and lack of experienced leadership may lead to a workload crisis for the US tax agency, exacerbating the existing confusion among digital assets enthusiasts regarding taxes. As a result, crypto accountants may face significant challenges in the coming year.