IRS Announces Temporary Relief for Digital Asset Brokers and Taxpayers Ahead of 2025 Compliance Deadline
The IRS’s announcement of temporary relief under Revenue Procedure 2024-28 brings significant implications for consumers and entrepreneurs navigating the rapidly evolving world of digital assets. This guidance, which addresses compliance challenges ahead of the January 1, 2025 deadline, reflects the growing influence of digital assets in everyday financial activities and business operations.
For consumers, this relief introduces clarity and flexibility in how gains and losses from digital asset transactions are calculated. As brokers default to the First-In, First-Out (FIFO) method due to technical limitations, consumers can opt for more precise methodologies, such as specific identification, to better manage their tax liabilities. This is particularly important for individuals actively trading digital assets or using them for purchases, as they can tailor their reporting methods to align with their financial strategies—provided they maintain detailed records.
For entrepreneurs, the guidance underscores the increasing need for robust compliance systems within businesses that deal with digital assets. Whether running a crypto exchange, offering blockchain-based payment solutions, or holding crypto as a business asset, this temporary relief provides breathing room to adapt to evolving IRS requirements. Entrepreneurs can leverage specific identification methods to optimize their tax positions, manage operational risks, and enhance transparency in financial reporting.
Moreover, this regulatory update signals the maturing landscape of digital assets and their role in global commerce. Entrepreneurs exploring opportunities in crypto payments, blockchain technology, or decentralized finance (DeFi) will benefit from the clear expectations set by the IRS, enabling them to build compliant and consumer-friendly businesses.
This temporary relief is a pivotal moment for fostering trust and accountability in the digital asset ecosystem, offering both consumers and entrepreneurs the tools to thrive in this fast-growing space while staying aligned with regulatory expectations. As the 2025 compliance deadline approaches, proactive recordkeeping and strategic planning will be essential to leveraging the benefits of this guidance
Temporary Relief for Brokers
https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets