U.S. pushes to adopt automatic offshore crypto reporting

Developed by Organisation for Economic Co-operation and Development, it enables automatic sharing of Americans’ offshore crypto account data with the IRS as early as 2027 and tightening cross-border tax enforcement.

The rule, now under Office of Information and Regulatory Affairs review, would align the U.S. with a global tax-transparency standard already backed by dozens of jurisdictions. Under CARF, foreign crypto-asset service providers such as exchanges and custodians would be required to identify U.S. tax residents, collect standardized account and transaction details, and report them to their local tax authority, which would then automatically exchange that data with the IRS through CARF’s multilateral agreement. 

The move targets offshore holdings and trading activity that have been difficult for U.S. authorities to observe at scale. Policymakers argue that automatic exchange would reduce incentives for U.S. taxpayers to route crypto activity through foreign platforms to avoid reporting, while putting offshore venues under the same type of transparency pressure long applied to foreign bank accounts.

CARF’s scope is broad. The OECD framework treats as reportable any crypto-asset that is a digital representation of value used for investment or payment, and it requires reporting on exchanges between crypto-assets and fiat, crypto-to-crypto trades, and transfers, including many payments and movements to self-hosted wallets. The OECD has also been publishing implementation FAQs and technical schemas this year to standardize how jurisdictions collect and transmit data.

U.S. officials have indicated they want to join the CARF exchange timelines that begin in 2027 or 2028, which would mean foreign platforms start collecting the required due-diligence fields in advance of first data exchanges. Several reports tied to the White House review note that the current U.S. approach would focus CARF reporting on centralized intermediaries, while excluding decentralized finance transactions for now to avoid imposing impractical reporting duties on protocol users and developers.

This international push comes alongside a domestic reporting ramp. The Treasury has already finalized rules for Form 1099-DA reporting by U.S. digital-asset brokers, with mandatory third-party reporting expected to begin for the 2025 tax year and to expand through 2026. Officials see CARF as the offshore counterpart to 1099-DA, closing the gap between what the IRS can see onshore versus abroad.