U.S. Joins 72 Nations to Curb Offshore Crypto Tax Evasion

The White House is advancing a proposal to grant the Internal Revenue Service (IRS) access to Americans' offshore cryptocurrency holdings through the Crypto-Asset Reporting Framework (CARF), a global initiative aimed at curbing cross-border tax evasion. The Treasury Department's rule, submitted for regulatory review on November 15, 2025, seeks to align the U.S. with 72 other countries that have committed to implementing CARF by 2027 or 2028, including major crypto hubs like Singapore, the United Arab Emirates, and the United Kingdom according to ChainCatcher. If finalized, the framework would require foreign crypto exchanges and service providers to report U.S. taxpayers' transactions, enabling the IRS to scrutinize undeclared offshore digital assets .

The proposal stems from recommendations in a July 2025 White House report, which emphasized that CARF adoption would deter Americans from shifting crypto assets to offshore platforms to avoid U.S. tax obligations according to Cointelegraph. The administration argued this would neutralize a perceived advantage for foreign exchanges and prevent capital flight that could undermine domestic crypto markets. "Implementing CARF would promote the growth and use of digital assets in the United States," the report stated, noting that the absence of such rules had already placed U.S. exchanges at a "structural disadvantage" .

CARF, established by the Organization for Economic Cooperation and Development (OECD) in 2022, mandates automatic information sharing among member nations to enhance tax compliance. Over 50 countries, including Brazil, Indonesia, and Spain, are set to begin exchanging data in 2027, with another 23—including the U.S.—targeting 2028 according to Cointelegraph. The framework mirrors the existing Common Reporting Standard for bank accounts but is tailored to crypto's unique challenges, such as pseudonymous transactions and cross-border transfers. Treasury officials stress that the U.S. rule would not impose new reporting requirements on decentralized finance (DeFi) transactions according to Bloomberg Law.

Domestically, the IRS is also preparing for stricter crypto tax enforcement. Starting in January 2026, U.S.-based exchanges will be required to report detailed transaction data via the 1099-DA form, including both inbound and outbound transfers according to Cointelegraph. This move, coupled with CARF, signals a broader effort to eliminate crypto anonymity. "Right now, the IRS doesn't have instant visibility into everything you're doing on the blockchain," said Clinton Donnelly, a U.S. crypto tax lawyer, in a recent public statement according to Cointelegraph.

Critics and industry stakeholders have mixed reactions. While the administration frames CARF as pro-innovation, some argue it could drive users to less-regulated jurisdictions or stifle adoption. The July report acknowledged these risks but countered that failing to act would exacerbate the problem by allowing offshore exchanges to dominate. "The lack of a reporting program could disadvantage the United States or U.S. digital asset exchanges," the report warned according to ChainCatcher.

The Treasury's proposal is currently under review by the White House Office of Information and Regulatory Affairs (OIRA), which evaluates regulatory alignment with presidential priorities. If approved, the rule would mark the most significant shift in U.S. crypto tax enforcement since the 2021 expansion of broker-reporting requirements. Implementation timelines remain unclear, but global CARF exchanges are scheduled to begin in 2027 .