IRS Digital Assets Head Departs Amid New Tax Regulations

The leader of the IRS’s digital assets unit, Trish Turner, has stepped down from her role in the private sector, coinciding with the introduction of new tax policies expected to create significant work for agencies regarding cryptocurrencies.

It’s unclear who will oversee the office following her departure. The IRS is implementing various new rules and forms to clarify tax obligations for individual cryptocurrency investors and their brokers. Turner’s exit occurs after the IRS lost two other senior officials earlier this year, leaving the agency somewhat unsettled.

The Treasury Tax Division is preparing for a large increase in cryptocurrency-related filings, but it’s facing challenges. Budget constraints and staffing reductions—over 20,000 positions cut—have diminished IRS resources significantly. The workforce has decreased from around 113,000 three decades ago to approximately 76,000 now.

A notable change in IRS cryptocurrency policy is the introduction of the new 1099-DA form, which will be sent to millions of investors who have engaged in crypto transactions. The IRS suggests that about 3 million taxpayers have already made such transactions, a figure likely to grow as new policies take effect. However, the agency has not commented on Turner’s resignation or her successor.

Turner remarked, “Digital assets have transitioned from a niche concern to a primary focus for global regulators. I’m thrilled to help taxpayers and businesses navigate these changing rules.”

In her new private sector role, Turner will serve as the tax director for a company called cryptotaxgirl, which specializes in tax issues related to cryptocurrency trading. She will also address matters concerning UK corporate assets.

According to Laura Walter, the founder of CTG, Turner’s expertise will significantly enhance the guidance and trust clients receive when filing taxes.

For years, cryptocurrency investors and businesses have faced a fog of uncertainty surrounding their tax obligations, and many have even bypassed necessary filings, complicating the IRS’s efforts to manage compliance.

The upcoming 1099-DA forms from crypto platforms like Coinbase and Kraken will require recipients to clarify their tax positions, putting pressure on them to act. However, an attempts by the IRS to define the role of specific decentralized finance platforms as brokers was rejected by Congress back in April, leaving those areas in a state of ambiguity.