IRS turns up heat on crypto ahead of April 15 tax deadline. Here’s what you need to know before filing

The Internal Revenue Service is stepping up its crackdown on crypto tax evasion — and investors are running out of excuses, experts say.

What was once a murky grey zone is now a brightly lit compliance regime backed by the agency’s Criminal Investigation division, according to Andrew Duca, founder of tax platform Awaken Tax.

“This year, we are seeing the IRS clampdown on crypto tax evasion more than ever before,” he told DL News. “The IRS's Criminal Investigation division is going after crypto cases more and more”

His stark warning lands right before the April 15 filing deadline for US crypto investors.

Some 61% of US crypto investors are unaware of the IRS’s new reporting rules for the 2025 tax year, according to a March report by Coinbase and CoinTracker shared with DL News. The report described an “environment of high compliance intent but low functional understanding.”

Duca said that 52% of US crypto investors are worried about filing their crypto taxes incorrectly this year and receiving an IRS penalty.

“There have been so many changes this year, and it’s clear investors are struggling to get their heads around it,” he said.

Filers should gather records from every exchange, connect every wallet, and report accurately, he urged.

That’s because voluntarily coming forward carries far lighter consequences than being caught. Criminal tax fraud can lead to a fine of up to $100,000 and five years in prison, according to Cornell Law School. That would be a worst-case scenario.

What’s new?

The biggest shift for 2025 is Form 1099-DA.

For the first time, brokers must report gross proceeds from digital asset transactions to taxpayers and the IRS. That brings crypto reporting closer to traditional brokerage accounts.

But there is a critical catch: brokers are not required to report cost basis to the IRS for 2025.

That means crypto investors remain fully responsible for calculating and reconciling their adjusted cost basis across platforms. And this is where many stumble, according to Duca.

“Make sure you don’t just accept what those exchanges send to you, or you could dramatically overpay,” he said.

Duca urged crypto investors to file their taxes in an honest and good-faith manner.

“The consequences of voluntarily coming forward rather than being caught out are far less.”

Crypto market movers 

• Bitcoin is up 5.3% over the past 24 hours, trading at $74,524.
• Ethereum is up 8.4% over the past 24 hours at $2,373.

What we’re reading 

• Crypto critics lament SEC enforcement reversal — DL News
• One of Trump’s biggest crypto supporters just turned on him — DL News
• Aave DAO Passes “Aave Will Win” Proposal, Directing 100% of Product Revenue to Token Holders — Unchained
• U.S. blockade on Iran = markets hostage — Milk Road
• Coinbase adds ‘DeFi mullet’ to UK offering in drive to become an everything exchange — DL News

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at [email protected]