Did The IRS Really Just Delay Crypto Tax Reporting Requirements?

Cryptocurrency holders interacting with centralized finance, or CeFi, exchanges in 2025 are benefitting from more flexible accounting methods in a temporary relief notice issued by the IRS.

What Happened: A thread on X by ‘TheCryptoCPA’ Shehan, Head of Tax at CoinTracker, outlines the change in regulations that took effect on Jan. 1.

The IRS has recognized and addressed a practical problem with the previously finalized Sec. 6045 custodial broker regulations.

These regulations would have required crypto assets held with CeFi brokers to be sold under the First-In-First-Out (FIFO) method if no preferred accounting method was chosen.

Almost all centralized exchanges were not ready to support this rule. The IRS subsequently issued Notice 2025-7 to provide temporary transition relief.

Cryptocurrency holders are no longer locked into the FIFO method but can document tax liabilities using their own books, records or crypto tax software.

The temporary relief affects sales on centralized exchanges in the calendar year 2025.

Following this period, users will have to select an accounting method for assets held on CeFi platforms.

Shehan advised his followers, “Make sure to pick your accounting method at your CeFi exchange on 1/1/26. If you don’t pick one, you will most likely default to FIFO.”

This relief is automatically applied and doesn’t require any specific action from taxpayers.

Also Read: Best Crypto Tax Software in 2024

Why It Matters: Shehan emphasizes the importance of using reputable crypto tax software or maintaining reliable records for those who wish to sell CeFi assets under methods other than FIFO during 2025.

The temporary relief aims to provide crypto holders with more flexibility and potentially better tax outcomes during the transition period, especially in a bull market environment where FIFO could lead to higher capital gains.

Read Next:

• Beginner's Guide: How to File Crypto Taxes in 2024

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