Key Takeaways
- Only about 6.5% of US taxpayers reported crypto sales between 2013 and 2021, a new study finds.
- The IRS is expanding disclosure requirements and introducing third-party reporting.
- Investors face higher audit risks and stricter enforcement.
Only a small fraction of crypto investors have historically reported their trading activity to US tax authorities, according to new academic research, even as regulators move to tighten oversight of the fast-growing sector.
Low Crypto Tax Report Rates
A study examining Internal Revenue Service (IRS) data found that only about 6.5% of taxpayers reported crypto sales between 2013 and 2021.
The findings come despite surveys suggesting that 12% to 21% of US adults owned digital assets during that period, according to a Bloomberg report by Olga Kharif.
The research, authored by academics including Texas Christian University’s Tyler Menzer, analyzed anonymized IRS filings and concluded:
“A lot of people were probably not reporting their holdings to the IRS.”
Menzer told Bloomberg that crypto owners were more likely to own “meme stocks than other investors,” and likely had “lower income.”
However, Bloomberg noted the findings were studied before 2024, when the US allowed exchange-traded funds to hold physical crypto.
Distinct Trading Patterns
The study also highlighted differences in trading behavior.
Crypto investors were more likely to engage in frequent transactions and appeared less sensitive to tax implications when selling assets, Bloomberg reported.
Separate data from crypto tax software firm CoinTracker showed users averaged hundreds of transactions per year — all of which would have needed to be reported to the IRS — with short-term holdings often resulting in losses.
Bloomberg cited data that crypto users posted an average gain of $2,629 on digital assets held for over a year, and a loss of $636 on crypto held for less than 365 days.
IRS Expands Crypto Tax Disclosure
The issue of reporting is gaining urgency as the IRS sharpens its focus on crypto during tax season.
All US taxpayers filing Form 1040 must now answer a question on whether they engaged in digital asset activity during the year, regardless of whether they receive official tax forms.
The requirement covers everything from selling crypto to receiving digital assets as payment or rewards.
Even small transactions — such as buying coffee with crypto — are likely to trigger reporting obligations.
By contrast, simply holding digital assets, transferring them between personal wallets, or purchasing them with fiat currency generally does not require a “Yes” response, the guidance states.
Push Toward Stricter Crypto Tax Reporting
At the same time, policymakers will soon implement broader international coordination.
The US Treasury has aligned the country with the Organization for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF).
CARF requires crypto service providers to automatically report user transaction data, including identities and tax residencies, to tax authorities.
The White House began pushing the Treasury to sign on to CARF in July, stating it would “alleviate concerns that the lack of a reporting program could disadvantage America in crypto.”
Last year, the Trump-created President’s Working Group on Digital Asset Markets submitted a 168-page crypto report, in which a significant portion focused on tax.
“The ease of cross-border transfer and access to offshore exchanges enables US taxpayers seeking to evade their tax obligations an offramp to do so,” the report read.
Adding: “As the ecosystem matures in the US, leaving these pathways untouched would create a structural disadvantage for brokers and exchanges domiciled in the US.”
If implemented, CARF would place the US alongside other major economies in adopting standardized crypto reporting rules and see the US implement automatic exchange of tax information on crypto transactions by 2027.
As of early 2026, 48 jurisdictions have committed to CARF, including the UK, Canada and Australia.
What It Means For Traders and Exchanges
For crypto investors, especially high-net-worth individuals, expanding global reporting standards are likely to bring significantly greater scrutiny.
Tax authorities will gain improved visibility into holdings and transactions, raising the risk that unreported gains could trigger audits.
In jurisdictions such as the UK, where capital gains tax on crypto can reach up to 20%, enhanced data sharing could make enforcement more effective.
Governments are increasingly betting that stricter oversight will help recover substantial lost revenue — with UK authorities alone targeting an estimated £500 million annually in crypto-related tax evasion.
Crypto platforms, meanwhile, face immediate operational challenges.
Exchanges and service providers will need to implement systems to verify user identities, determine tax residency and report detailed transaction data to authorities.
These requirements are likely to increase compliance costs, which may ultimately be passed on to users through higher fees.
It’s also possible that smaller firms will struggle to meet the new standards, potentially accelerating consolidation across the industry.
Conversely, platforms that adapt quickly — particularly in heavily regulated markets — may benefit from increased trust.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
