The IRS is granting temporary tax relief for cryptocurrency holders using centralized exchanges in 2025. Announced by Shehan Chandrasekera, it's part of the IRS's updated guidelines under section 6045 of custodial broker regulations.
The relief addresses the potential tax burden from using the FIFO accounting method, which could push up capital gains. CeFi brokers were not prepared for Spec ID, leaving FIFO as the default, potentially harmful in a bull market. This temporary measure allows traders to use their records or crypto tax software instead.
This measure is valid between January 1 and December 31, 2025. The IRS's ongoing crackdown on crypto tax evasion includes new DeFi reporting guidelines and an AI tool for fraud detection.
