Report Reveals Underreporting of Cryptocurrency Holdings to IRS by U.S. Investors

A recent report highlights that many U.S. cryptocurrency investors may not be reporting their digital asset holdings to the Internal Revenue Service (IRS). According to ChainCatcher, the analysis conducted by Tyler Menzer, an assistant professor at Texas Christian University, and his co-authors, examined anonymous IRS tax data. They found that between 2013 and 2021, only 6.5% of taxpayers reported cryptocurrency sales, despite surveys indicating that 12% to 21% of U.S. adults held cryptocurrencies during the same period. This discrepancy suggests potential tax revenue losses due to underreporting of crypto-related income and transactions. The study also reveals that cryptocurrency holders are more likely to invest in meme tokens, tend to be younger, and have lower incomes compared to traditional stock investors. Data from CoinTracker indicates that for the 2025 tax year, crypto investors are expected to report an average of 836 transactions, with short-term holdings averaging a loss of $636 and long-term holdings averaging a profit of $2,692.