Head of IRS Crypto Work Exits as U.S. Tax Changes Loom For Digital Assets

The head of the U.S. Internal Revenue Service's digital assets unit, Trish Turner, is leaving her post for the private sector just as new tax policies are set to potentially bring in a wave of crypto work for the agency.

As she departs, it's unclear who will be running the office that's been leading the tax agency's crypto work as a major shift in U.S. digital assets taxation is on the horizon. Turner's exit comes after the IRS set several new rules and forms in motion to direct taxation requirements for individual crypto investors and their brokers. And the departure comes after two other top officials on crypto work, Seth Wilks and Raj Mukherjee, already left through the Trump administration's budget-slashing campaign earlier this year.

The tax arm of the Treasury Department is poised to experience a massive influx of crypto-sector filings while it's also weathering deep budget and staffing cuts in excess of 20,000 employees. IRS staffing — long a target of Republican lawmakers — has experienced a long-term decline from about 113,000 three decades ago to about 76,000 at a recent count.

One of the major crypto changes at the IRS was the new 1099-DA form that millions of investors will be receiving from their crypto brokers. About 3 million taxpayers have previously disclosed they had crypto transactions — a number that's likely much higher in reality, setting up a potential glut of newly disclosed crypto taxpayers as the policies come online. The IRS didn't respond to questions about Turner's departure and who will take over.

"Digital assets have shifted from a niche issue to a core focus for global regulators, and I am proud to have helped lay the foundation for oversight in this fast-changing space,” Turner said in a statement to CoinDesk. “Now, I’m excited to be moving to the other side of the table to help taxpayers, businesses, and institutions understand their obligations and navigate those same rules with confidence."

Among the private-sector roles she's taking on, Turner will be tax director at the firm CryptoTaxGirl, a tax business that specializes in crypto transactions, and will also do work with the UK firm Asset Reality, she said.

Laura Walter, CTG's founder, said in a statement that Turner's arrival will help "ensure our clients receive the highest level of guidance, protection, and confidence in their filings."

For years, crypto investors and businesses have struggled through U.S. tax uncertainties, with no third-party documentation to make their tax-filing requirements clear. So a large segment of digital assets holders have skipped their crypto tax calculations in past years, further muddying the water for the IRS.

Because the new 1099-DA forms will be flowing from crypto investors' accounts at such firms as Coinbase and Kraken early next year, those recipients will be under increased pressure to work out and disclose their tax positions. But one IRS rule that sought to treat certain decentralized finance (DeFi) platforms as brokers was overturned by Congress in April, leaving treatment of that corner of the crypto sector on less certain ground.Read More: The Coming Crypto Tax Bomb