Core Insights - Digital asset users are increasingly concerned about the complexities of filing crypto taxes as on-chain activity rises, coinciding with the adoption of the Crypto-Asset Reporting Framework (CARF) aimed at improving cryptocurrency tax oversight [1]. Group 1: IRS Crypto Tax Reporting - The IRS classifies digital assets as property, necessitating the reporting of income and capital gains from various transactions, including sales, service payments, staking, and airdrops [2]. - Holding cryptocurrency does not trigger a taxable event; taxation occurs only when the asset is sold, resulting in realized gains [3]. - For the 2025 tax year, the standard IRS filing deadline is April 15, 2026, with an extension available until October 15, 2026, applicable only to filing, not payment [4]. Group 2: Challenges in Filing Crypto Taxes - Despite clear tax guidance, the execution of filing remains complex, particularly for investors with high transaction volumes who must reconcile activities across various platforms and wallets [5]. - Errors in transaction classification or cost basis calculations can significantly impact reported gains and losses, posing challenges for high-frequency traders [5]. - The burden of proof lies with the taxpayer, emphasizing the importance of maintaining accurate records to avoid potential penalties [6]. - A notable example includes an investor named "Crypto Safe," who reported executing over 17,000 transactions across multiple blockchains in 2025 [6].