Washington's growing interest in increased oversight of digital assets held abroad continues to gain importance. Momentum is building as a proposed rule, allowing the IRS to access data from offshore crypto accounts owned by U.S. taxpayers, enters the White House review phase. This progress marks a clearer desire to align American tax policy with international reporting standards, bringing closer cooperation with foreign regulators.
In brief
- US regulators are studying a proposal to allow the IRS to access, via CARF rules, data from offshore crypto accounts held by Americans.
- CARF provides for automatic exchange of information relating to foreign crypto accounts to combat cross-border tax evasion.
- The White House believes joining CARF could strengthen U.S. trade by reducing the appeal of offshore crypto platforms.
- The plan excludes DeFi from reporting obligations as the IRS prepares for the global rollout of CARF in 2027, marking a major turning point in crypto tax oversight.
White House: Joining CARF Could Make Offshore Crypto Platforms Less Attractive
A Treasury proposal details how the United States could integrate the Crypto-Asset Reporting Framework (CARF), an international system established by the OECD in 2022 to combat cross-border tax evasion. The system requires participating countries to automatically share information on their residents' crypto assets when they are held outside their jurisdiction.
Countries such as Japan, Germany, France, Canada, Italy, the United Kingdom, Singapore, the United Arab Emirates and the Bahamas have already committed to the system.
Earlier this year, advisers to President Donald Trump encouraged U.S. officials to adopt CARF. Their report stated that this participation would support the domestic digital asset ecosystem and reduce the incentive for taxpayers to move their crypto holdings abroad. The White House also stressed that joining this framework could strengthen American trade by making offshore platforms less tax attractive.
International Tax Regime Advances as US Considers IRS Integration
Under the proposal, federal agencies would begin preparing the IRS to connect to CARF's global reporting network. The frame must be deployed globally in 2027giving American regulators time to design their reporting systems and integrate these new mechanisms into existing tax audit programs.
Key elements of the framework include:
- Automatic exchange of data relating to foreign crypto accounts between participating countries.
- Reporting obligations for digital asset intermediaries covered by the CARF.
- Standards intended to identify the tax residence of account holders.
- Data sharing rules to facilitate cross-border audits and investigations.
- Alignment with international financial reporting practices in force for several years.
The White House guidance also directs Treasury and the IRS not to extend the new reporting requirements to decentralized finance transactions, in order to maintain a clear distinction between institutional and peer-to-peer activities.
Adoption of this rule would constitute the most significant update to crypto tax enforcement in the United States since Congress expanded broker-dealer reporting requirements in 2021. With an international rollout planned for 2027, the White House appears poised to initiate increased cooperation on global crypto regulation.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
