What IRS proposal targets offshore crypto?

TLDR

The proposal is to align the U.S. with the OECDs Crypto?Asset Reporting Framework (CARF), giving the IRS access to U.S. taxpayers crypto activity on foreign platforms via automatic information exchange, now under White House review. See the report.

1. Aim: close offshore reporting gaps by pulling data from foreign custodians and exchanges, not DeFi activity per current framing review.
2. Process: the draft reached the federal OIRA review stage, a key step before rulemaking review.
3. Context: would join a growing CARF network of 70+ countries planning rollout around 20272028 overview.

Deep Dive

1. What CARF Would Do

CARF is an international standard for automatic exchange of crypto transaction and account data across jurisdictions to improve tax transparency. The U.S. proposal under review would let the IRS receive data from foreign platforms where Americans hold or trade crypto, reducing the incentive to shift activity offshore to avoid reporting. See the White House review note on foreign platform coverage in this report.

• The review explicitly frames the goal as closing offshore reporting gaps for U.S. taxpayers digital assets held abroad, via an OECD-aligned system summary.
• It mirrors past cross?border tax tools (for example, FATCA) applied to bank accounts, now adapted to digital assets comparison.

2. Who Is Covered Now

The current framing emphasizes foreign custodians and centralized platforms. It also signals an intent to avoid imposing new reporting burdens on decentralized finance transactions in this phase, which narrows scope to offshore custodial activity rather than smart?contract interactions. That DeFi carve?out is cited in the White House review coverage summary.

• The proposal targets cross?border data sharing from foreign venues that custody or intermediate user assets review.
• Articles summarizing the review state DeFi transactions are not slated for additional reporting at this time summary.

3. Timing and Global Context

The proposal has reached OIRA review, a standard administrative checkpoint before potential rulemaking. It would align the U.S. with other jurisdictions committing to CARF implementation on a 20272028 horizon, expanding a global data?sharing network for digital assets. See the status and timeline in this CARF adoption overview.

• OIRA review indicates the proposal is being evaluated against broader policy goals before any final rule is issued status.
• A CARF network of 70+ countries aims to launch reporting over the next few years, with the U.S. considering alignment to avoid regulatory gaps overview.

Conclusion

In short, the IRS proposal targets offshore crypto by tying the U.S. into CARF so the IRS can receive data from foreign platforms used by Americans, with DeFi outside the immediate scope. It is under White House review now, and if adopted, would move U.S. rules in line with a multi?country reporting network over the next few years.