XRP and other digital assets are at the center of a major tax overhaul in the U.S., just as the Internal Revenue Service’s (IRS) top crypto official exits. Trish Turner, head of the IRS’s digital assets division, is departing for the private sector right as sweeping regulatory changes are poised to reshape the crypto tax landscape.

Leadership Shift Ahead of Major Crypto Policy Changes

Turner’s departure leaves a noticeable gap at the IRS during a pivotal moment for cryptocurrency taxation. Her office was instrumental in steering the agency’s crypto-related efforts, particularly with the upcoming tax reporting requirements set to affect millions of investors. There has been no official word on who will assume her responsibilities, adding uncertainty as regulators move to implement these significant measures.

These adjustments come on the heels of new IRS frameworks and documentation, including the introduction of the 1099-DA form. This form will be distributed by crypto brokers to their clients, pushing for greater transparency in digital asset transactions. While roughly 3 million taxpayers have previously reported crypto activities, estimates suggest the actual number is significantly higher. With formalized tracking now in place, the expected wave of disclosures will likely flood IRS systems starting next year.

IRS Confronts Budget Cuts and Reduced Workforce

Beyond leadership changes, the IRS is also grappling with major logistical hurdles. The agency is facing widespread budget constraints and staffing reductions — part of a broader cost-cutting initiative from the Trump administration. The IRS workforce has shrunk from 113,000 employees in the 1990s to just under 76,000 today. These reductions could severely hamper the agency’s ability to manage its growing crypto portfolio efficiently.

New Tax Forms Pressure Investors to Report

The rollout of the 1099-DA form represents a major shift in crypto oversight. Investors using platforms like Coinbase and Kraken will begin receiving these documents, which outline all taxable events within their trading accounts. This streamlined reporting is intended to clarify obligations for taxpayers and allow the IRS to flag any non-compliance more effectively.

However, one proposed rule requiring decentralized finance (DeFi) platforms to act as brokers was struck down by Congress earlier this year. This has left the regulatory approach for DeFi in a state of limbo, with unclear implications for how these platforms and their users will be treated under tax law.

Trish Turner’s New Role in the Private Sector

As she transitions out of government, Turner will bring her knowledge of crypto compliance to the private sector. She has accepted a new role as tax director at CryptoTaxGirl, a tax advisory firm catering to cryptocurrency users. Turner will also collaborate with UK-based firm Asset Reality, further extending her influence on global digital asset strategy.

“Digital assets have gone from niche to mainstream in global regulation, and it’s been an honor to help build the foundation for oversight,” Turner said in a farewell statement. “Now, on the private side, I aim to help individuals and companies better understand and adhere to these emerging tax rules.”

The IRS crypto unit faces leadership challenges and new policy obligations as U.S. tax rules evolve.

Laura Walter, founder of CryptoTaxGirl, celebrated Turner’s addition to her team. She stated that the former IRS official’s insights will “ensure our clients receive the highest level of guidance, protection, and confidence in their filings.”

Ongoing Confusion for Crypto Taxpayers

Despite regulatory strides, confusion still plagues U.S.-based crypto investors and businesses. For years, the absence of standardized third-party reporting made it easy for many users to ignore crypto tax duties. This lack of oversight contributed to underreporting and audit challenges for the IRS.

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With digital assets—including XRP—set to attract more regulatory attention, 2025 is expected to be a defining year for crypto taxation. Though Turner has exited, the foundational work she led suggests that taxing digital assets is now firmly embedded within IRS strategy.