The Internal Revenue Service's new regulations and pro-crypto President Donald Trump's return to office introduce fresh changes for accountants in 2025. At what point, many experts wonder, could the cost of dealing with digital assets outweigh the benefits?
Trump has expressed his support of the crypto industry since mid-2024. His actions include the creation of decentralized finance firm
"We're going to do something great with crypto," Trump said in a December interview with CNBC's Jim Cramer. "Because we don't want China — and not just China, others are embracing it — and we want to be the head."
Trump has even launched his own meme coin, "
Industry experts were fairly convinced prior to the mintings that the Trump administration would usher in a more crypto-friendly regulatory environment, and are now more certain of their predictions.
Justin Wilcox, tax and advisory services partner and cryptocurrency practice lead at Connecticut-based accounting firm Fiondella, Milone & LaSaracina LLP, said the coins "signal a crypto-friendly administration versus the prior four years under Biden and [former Securities and Exchange Commission Chair] Gary Gensler."
"The SEC under the Trump presidency is already establishing a crypto task force, which will focus on a regulatory framework for digital assets," Wilcox said. "This framework will hopefully result in clear guidelines for founders of cryptocurrencies to understand the relevant legal implications ahead of time."
Expectations also include "legislation [that] may be pushed forward to establish a 'strategic reserve' for bitcoin and potentially other digital assets," he said.
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Regulators with the IRS have already put new accounting standards into place this year, featuring a
Both of these changes increase the information lift required by brokers, taxpayers, banks and other parties (those working for decentralized finance organizations have another two years until they also need to comply with the IRS's new requirements) reporting crypto transactions and holdings. It's left many skeptical of how accurate filings will be at the start.
Digital asset companies such as the accounting solutions provider TaxBit and tax platform Ledgible have already begun incorporating new features or products into their offerings to account for standard changes from the IRS and the Financial Accounting Standards Board.
Ledgible's
"The DeFi tax reporting regulations will be challenging to brokers and taxpayers as the DeFi systems and protocols are not centrally governed," Kell Canty, chief executive of Ledgible, said. "Self-calculating the true cost basis and calculations throughout various aspects of DeFi will be very challenging to taxpayers when it comes to calculating gains and losses. … For these DeFi brokers, the challenge is in collecting personal tax information from their users."
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While many of Trump's legislative crypto efforts are still in their infancy, CPAs and other professionals are working to adapt for the 2025 tax year and beyond.
Chad Cummings, CPA and chief executive of Naples, Florida-based law firm Cummings & Cummings Law, said challenges abound for taxpayers and accountants who have to now account for audit risks, fair market value determinations, basic transaction calculations and more.
"For CPAs, this means greater demand for advisory services related to tracking and reconciling crypto transactions, implementing portfolio tracking systems and preparing for potential disputes with tax authorities," Cummings said. "However, firms that fail to invest in staff training or crypto-specific technology risk reputational and financial exposure."
Learn more about some of the top digital asset developments across the accounting profession in the last few months and what experts are doing to stay ahead of the curve.
AICPA revises educational material on digital assets
Leaders of the American Institute of CPAs updated its practice aid for learning more about accounting for and auditing digital assets in January, following updated standards out of the Financial Accounting Standards Board.
The revised
Updates include the removal of the term "crypto assets" in favor of new nomenclature like crypto intangible assets, in-scope crypto intangibles assets and out-of-scope crypto intangibles assets.
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What a bitcoin reserve means for the accounting profession
With the naming of
In speaking with AT, experts with the Wall Street Blockchain Alliance say these appointments, in addition to controversial proposals to institute bitcoin reserves by President Trump and state changemakers, create an optimal regulatory environment for making the concept a reality — but risks will remain.
"Bitcoin's price volatility itself poses a significant risk. … Large-scale government investments could lead to substantial fluctuations in reserve valuations, potentially impacting overall financial stability," Sean Stein Smith, member of the alliance's advisory board, and Ron Quaranta, chairman and chief executive of the alliance, said.
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New IRS rules for DeFI tax reporting take effect
Capping off 2024, the Internal Revenue Service issued its
While DeFi brokers have a two-year buffer until the Jan 1. 2027, start date, centralized exchanges and platforms such as brokers, traders, banks and taxpayers must abide by the new rules as of Jan. 1, 2025.
"Although the applicability date proposed by the proposed regulations applied to gross proceeds reporting for sales of digital assets effected on or after Jan. 1, 2025, the Treasury Department and the IRS agree that a delay is warranted for trading frontend service providers treated as brokers (DeFi brokers) under these final regulations," the regulations said.
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SEC chairman nominee Paul Atkins predicted to bring more deregulation
SEC Commissioner
Uyeda said during talks at the AICPA & CIMA Conference on Current SEC and PCAOB Developments in December that he expects an Atkins administration to bring "a return to capital formation" as well as eagerness towards embracing cryptocurrency adoption.
"There are a number of things that we can be doing in this area, not only on the accounting side, but with the disclosures that are required, how you think about this in the context of custody, with respect to auditing crypto reserves," Uyeda said. "There is so much we can be doing in these areas which I would expect the SEC to try to put renewed focus on."
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It's the end of universal wallet accounting as we know it
Accountants have been hard at work since October to prepare cryptocurrency clients for the
Rather than allowing taxpayers to report their cryptocurrency balances as a combined amount, they must now report those values to the IRS on a per-account basis.
"You're talking about going from the universal wallet concept — which is imperfect without a doubt but something we can handle today — to what is, in essence, specific IDs where every wallet needs to be treated as its own universe for tax purposes," Zach Gordon, founder of cryptocurrency accounting firm Red Five, told AT's
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