IRS Moves to Tax Foreign Cryptocurrency Accounts Under Global Agreement

The Internal Revenue Service is preparing to take a major step toward taxing overseas cryptocurrency holdings — a move that could reshape how Americans store and report their digital assets abroad.

According to Yahoo! Finance, the IRS is awaiting final approval from the White House to join the Crypto-Asset Reporting Framework (CARF), an international agreement designed to combat tax evasion and increase transparency in the fast-growing world of crypto. If approved, the U.S. would begin collecting and exchanging information on Americans’ foreign cryptocurrency accounts with other participating countries.

CARF, developed by the Organisation for Economic Co-operation and Development (OECD), functions similarly to the global standards used for foreign bank accounts. It allows tax authorities in member nations to share data about crypto transactions, account balances, and asset ownership across borders.

All other G7 countries — including Canada, France, Germany, Italy, Japan, and the United Kingdom — have already signed on.

If the U.S. joins CARF, Americans with foreign-held crypto accounts could soon face the same kind of reporting requirements as those with overseas bank accounts. That means that platforms based in countries cooperating with the framework would be required to report account details to U.S. authorities — even if the account holders never voluntarily disclose them.

The aim is to close a growing tax loophole. While domestic cryptocurrency transactions have become more tightly regulated in recent years, foreign crypto accounts have remained largely out of reach for U.S. tax authorities. CARF would change that by creating a global reporting standard, giving the IRS better tools to detect undeclared digital assets held abroad.

The IRS has stepped up enforcement in recent years, especially as cryptocurrency adoption has surged. Starting in 2023, taxpayers were required to check a box on their tax return indicating whether they had received or sold cryptocurrency during the year — and to report any gains. The move toward CARF would represent a further step in treating crypto like traditional financial assets, both in enforcement and tax obligations.

Critics of the move say it could raise privacy concerns and increase the complexity of tax reporting for crypto investors, especially those who use international exchanges or store assets in decentralized platforms. However, tax experts note that foreign reporting rules have long existed for bank accounts and investments, and expanding those rules to include cryptocurrency is a logical — and likely overdue — progression.

The IRS has not announced a specific timeline for implementation, but approval from the White House would mark a key milestone. Once the U.S. joins CARF, crypto investors with assets abroad will likely face new disclosure requirements and possible penalties for non-compliance, just as they do for unreported overseas bank accounts.

For crypto holders, the message is clear: international tax transparency is coming — and digital assets are no longer flying under the radar.