Three out of four crypto traders in the United States are not reporting all of their digital asset income to the Internal Revenue Service (IRS), according to crypto tax expert Clinton Donnelly. He warned that the era of limited IRS visibility into crypto activity is ending, and traders who have fallen behind on filings may face increasing enforcement risk. IRS to receive detailed digital asset reports starting in 2026 In a post on X on Nov. 25, Donnelly explained about a new report by the IRS that would ...

Core Points - The ongoing US government shutdown has led to the IRS furloughing nearly 34,000 employees, significantly impacting its operations [2][5] - The IRS has scaled back most operations, which will affect crypto tax services, leading to reduced taxpayer assistance and increased backlogs [1][4] - The shutdown does not alter tax deadlines or legal requirements for taxpayers, who must still file and pay taxes by the due dates [6] Impact on IRS Operations - The IRS will send home call center representatives, IT staff, and most headquarters personnel, which is expected to severely affect customer service [2][4] - The furlough will result in a sharp reduction in customer service and live support, making it difficult for cryptocurrency users to obtain necessary tax clarification [4][5] - Ongoing tax disputes and audits related to cryptocurrency reporting will experience significant delays due to the staffing reductions [5] Consequences for Crypto Tax Services - The IRS is in the process of developing new reporting requirements for digital assets, but the prolonged shutdown may delay the finalization of this guidance [6] - If the shutdown continues, crypto taxpayers will face a challenging and confusing environment for tax filing [7]