U.S. Considers Joining Global Crypto Tax Reporting Framework

The United States is reviewing a proposal to join the Crypto-Asset Reporting Framework (CARF), an international initiative aimed at enhancing transparency in digital asset taxation. The proposal is under final consideration at the White House, and if approved, it would allow the IRS to automatically share information on Americans’ foreign crypto holdings with tax authorities in other countries, helping close loopholes used for tax evasion.

CARF was developed by the Organisation for Economic Co-operation and Development (OECD) to create a common standard for reporting crypto transactions. Several U.S. allies, including the United Kingdom, Germany, and Japan, have already committed to the framework. Under CARF, crypto intermediaries such as exchanges report transaction data, which is then automatically shared with the account holder’s home country, creating a more transparent global network.

The Treasury Department has outlined how the U.S. would integrate with CARF, including linking IRS systems with the international reporting network and standardizing rules for determining tax residency of crypto investors. Decentralized finance (DeFi) transactions would largely be excluded from reporting requirements, focusing oversight on centralized platforms while encouraging innovation in decentralized systems.

Adopting CARF is expected to reshape the competitive landscape for crypto businesses, as domestic exchanges may gain an advantage while offshore platforms lose appeal for tax avoidance. Investors can expect greater transparency, and the IRS will have a clearer view of offshore holdings, improving compliance in the digital asset sector. The global rollout of CARF is scheduled for 2027, giving U.S. regulators time to prepare and coordinate with stakeholders for smooth implementation.