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The changing crypto landscape brings new risks to accounting

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The Internal Revenue Service’s new regulations and pro-crypto President Donald Trump’s return to office introduce fresh changes for accountants in 2025. At what point, many experts wonder, could the cost of dealing with digital assets outweigh the benefits?

Trump has expressed his support of the crypto industry since mid-2024. His actions include the creation of decentralized finance firm World Liberty Finance in a joint venture with his sons, Eric Trump and Donald Trump Jr., and proposals to create a strategic U.S. government reserve of bitcoin.

“We’re going to do something great with crypto,” Trump said in a December interview with CNBC’s Jim Cramer. “Because we don’t want China — and not just China, others are embracing it — and we want to be the head.”

Trump has even launched his own meme coin, “$TRUMP“, which hit the market on Jan. 17 at around $7 per coin and soared to a value of roughly $75 per coin on Jan. 19 and a market cap of $7.6 billion on Jan. 23, according to data from CoinMarketCap. First Lady Melania Trump also launched her own meme coin on Jan. 19, simply named “MELANIA,” which similarly started out around $7 per coin but now trades around $4 per coin as of Jan. 23.

Industry experts were fairly convinced prior to the mintings that the Trump administration would usher in a more crypto-friendly regulatory environment, and are now more certain of their predictions.

Justin Wilcox, tax and advisory services partner and cryptocurrency practice lead at Connecticut-based accounting firm Fiondella, Milone & LaSaracina LLP, said the coins “signal a crypto-friendly administration versus the prior four years under Biden and [former Securities and Exchange Commission Chair] Gary Gensler.”

“The SEC under the Trump presidency is already establishing a crypto task force, which will focus on a regulatory framework for digital assets,” Wilcox said. “This framework will hopefully result in clear guidelines for founders of cryptocurrencies to understand the relevant legal implications ahead of time.”

Expectations also include “legislation [that] may be pushed forward to establish a ‘strategic reserve’ for bitcoin and potentially other digital assets,” he said.

Read more: Trump names Uyeda acting chair of SEC

Regulators with the IRS have already put new accounting standards into place this year, featuring a new 1099-DA form and the end of “universal wallet accounting.”

Both of these changes increase the information lift required by brokers, taxpayers, banks and other parties (those working for decentralized finance organizations have another two years until they also need to comply with the IRS’s new requirements) reporting crypto transactions and holdings. It’s left many skeptical of how accurate filings will be at the start.

Digital asset companies such as the accounting solutions provider TaxBit and tax platform Ledgible have already begun incorporating new features or products into their offerings to account for standard changes from the IRS and the Financial Accounting Standards Board.

Ledgible’s Digital Asset Assessment program will help clients determine if their existing compliance, data and reporting infrastructure is up to par with current requirements. TaxBit’s Principal Market Analysis tool allows companies to use specific policy elections when determining their principal market in the valuation of digital assets.

“The DeFi tax reporting regulations will be challenging to brokers and taxpayers as the DeFi systems and protocols are not centrally governed,” Kell Canty, chief executive of Ledgible, said. “Self-calculating the true cost basis and calculations throughout various aspects of DeFi will be very challenging to taxpayers when it comes to calculating gains and losses. … For these DeFi brokers, the challenge is in collecting personal tax information from their users.”

Read more: New crypto regs will generate information deluge

While many of Trump’s legislative crypto efforts are still in their infancy, CPAs and other professionals are working to adapt for the 2025 tax year and beyond.

Chad Cummings, chief executive of Naples, Florida-based law firm Cummings & Cummings Law, said challenges abound for taxpayers and accountants who have to now account for audit risks, fair market value determinations, basic transaction calculations and more.

“For CPAs, this means greater demand for advisory services related to tracking and reconciling crypto transactions, implementing portfolio tracking systems and preparing for potential disputes with tax authorities,” Cummings said. “However, firms that fail to invest in staff training or crypto-specific technology risk reputational and financial exposure.”

Learn more about some of the top digital asset developments across the accounting profession in the last few months and what experts are doing to stay ahead of the curve.

AICPA building in Durham, N.C.

AICPA revises educational material on digital assets

Leaders of the American Institute of CPAs updated its practice aid for learning more about accounting for and auditing digital assets in January, following updated standards out of the Financial Accounting Standards Board.

The revised practice aid, which was developed using the notes of members from the AICPA’s Digital Assets Working Group, now includes a modernized definition of digital assets, new terms and questions such as, “Are nonfungible tokens in the scope of FASB ASC 350-60?” and “Are ‘wrapped tokens’ in the scope of FASB ASC 350-60?”

Updates include the removal of the term “crypto assets” in favor of new nomenclature like crypto intangible assets, in-scope crypto intangibles assets and out-of-scope crypto intangibles assets.

Read more: AICPA updates digital assets practice aid

Bitcoins

What a bitcoin reserve means for the accounting profession

With the naming of venture capitalist and former PayPal chief operating officer David Sacks as the White House’s AI and crypto “czar” and the Securities and Exchange Commission’s appointment of “Crypto Mom” Commissioner Hester Peirce to head up its cryptocurrency-focused task force, accountants are forecasting a high chance of bitcoin policy moves on the horizon.

In speaking with AT, experts with the Wall Street Blockchain Alliance say these appointments, in addition to controversial proposals to institute bitcoin reserves by President Trump and state changemakers, create an optimal regulatory environment for making the concept a reality — but risks will remain.

“Bitcoin’s price volatility itself poses a significant risk. … Large-scale government investments could lead to substantial fluctuations in reserve valuations, potentially impacting overall financial stability,” Sean Stein Smith, member of the alliance’s advisory board, and Ron Quaranta, chairman and chief executive of the alliance, said.

Read more: The accounting implications of a Bitcoin reserve

The IRS headquarters in Washington

New IRS rules for DeFI tax reporting take effect

Capping off 2024, the Internal Revenue Service issued its final regulations requiring decentralized finance brokers to record the sales and transactions of digital assets on its Form 1099-DA, as well as added support for those struggling during the transition period.

While DeFi brokers have a two-year buffer until the Jan 1. 2027, start date, centralized exchanges and platforms such as brokers, traders, banks and taxpayers must abide by the new rules as of Jan. 1, 2025.

“Although the applicability date proposed by the proposed regulations applied to gross proceeds reporting for sales of digital assets effected on or after Jan. 1, 2025, the Treasury Department and the IRS agree that a delay is warranted for trading frontend service providers treated as brokers (DeFi brokers) under these final regulations,” the regulations said.

Read more: IRS finalizes regs for DeFi tax reporting

Paul Atkins of the SEC

David Paul Morris/Bloomberg

SEC chairman nominee Paul Atkins predicted to bring more deregulation

SEC Commissioner Mark Uyeda, who is acting chairman of the agency while Trump nominee Paul Atkins navigates confirmation hearings, expressed the hope that if approved, Atkins will usher in an era of regulatory easing at the agency.

Uyeda said during talks at the AICPA & CIMA Conference on Current SEC and PCAOB Developments in December that he expects an Atkins administration to bring “a return to capital formation” as well as eagerness towards embracing cryptocurrency adoption.

“There are a number of things that we can be doing in this area, not only on the accounting side, but with the disclosures that are required, how you think about this in the context of custody, with respect to auditing crypto reserves,” Uyeda said. “There is so much we can be doing in these areas which I would expect the SEC to try to put renewed focus on.”

Read more: Big changes expected at SEC under new chairman

Crypto tax

It’s the end of universal wallet accounting as we know it

Accountants have been hard at work since October to prepare cryptocurrency clients for the IRS Revenue Procedure 2024-28, which since it went into effect in January has fundamentally uprooted the “universal wallet” reporting standard for crypto holdings — leaving many scrambling to comply.

Rather than allowing taxpayers to report their cryptocurrency balances as a combined amount, they must now report those values to the IRS on a per-account basis.

“You’re talking about going from the universal wallet concept — which is imperfect without a doubt but something we can handle today — to what is, in essence, specific IDs where every wallet needs to be treated as its own universe for tax purposes,” Zach Gordon, founder of cryptocurrency accounting firm Red Five, told AT’s Chris Gaetano.

Read more: CPAs race to prepare clients for end of universal wallet accounting

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Accounting

Trump berates Republicans to ‘Stop talking,’ pass tax cuts

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Donald Trump listens to a question while speaking to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C.
Donald Trump

Al Drago/Bloomberg

President Donald Trump called on members of his party to unite behind his economic agenda in Congress, putting pressure on factions of lawmakers who are calling for last-minute changes to the legislation to drop their demands.

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

Trump sent the post from Air Force One after departing the Middle East as the House Budget Committee was meeting to approve the legislation, one of the final steps before the bill can move to the House floor for a vote.

House Speaker Mike Johnson has set a goal to pass the bill next week before the House recesses for its Memorial Day break.

However, the the bill failed the initial committee vote — typically a routine, procedural step — with members of the party still sparring over the scope of the cuts to Medicaid benefits and how much to raise the limit on the state and local tax deduction.

Narrow majorities in the House mean that a small group of Republicans can block the bill. Factions pushing for steeper Medicaid cuts and for an increase to the SALT write-off have both threatened to defeat the bill unless their demands are met.

“No one group gets to decide all this stuff in either direction,” Representative Chip Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Trump’s social media muscle and calls to lawmakers have previously been crucial to advancing his priorities and come as competing constituencies have threatened to tank the measure.

But shortly after Trump’s Friday post, Roy and fellow hardliner Ralph Norman of South Carolina appeared unmoved — at least for the moment. Both men urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time”

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97% say CPA firms not using tech efficiently says survey

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While CPA firms far and wide have made major technology investments over the years, the vast majority of accountants say they’re not being used to their full potential. 

This finding comes from a recent survey undertaken by CPA.com and payment solutions provider Bill. The 400-person poll found that nearly all respondents, 97%, say they use technology inefficiently and that additional training is needed to maximize return on investment. Further illustrating the point, 43% of respondents said that technology is making them do more manual work, not less, something. Becky Munson, an Eisner Amper partner specializing in outsourced accounting services, believes this reflects a failure of training and change management, as she has seen many who disliked a technology change develop manual workarounds specifically to avoid using the new solutions. 

“We see employees make workarounds with tech stacks, which makes headaches that I think align with this 43%. We train people on new things, we ask them to use them, and they keep doing what they were doing before and only use the technology as much as they have to [in order to] move things along while you have people well trained on the software keeping up,” she said in a webcast on Thursday about the survey. 

Inefficient

Ariege Misherghi—senior vice president and general manager of accounts payable, accounts receivable and the accountant channel—said the issue isn’t just because of firms but also vendors that don’t provide enough support, and may not necessarily understand the profession in the first place. 

“Too often I think tools aren’t fully aligned with the workflows they’re meant to support. In SaaS they talk about product-market fit, but in this profession it’s not just that but also product-firm fit, and maybe product-profession fit. Not every tool marketed to accountants was built by people who truly understand how this profession works: the rhythms, the regulations, the stakes, the relationships, all of that. And even the greatest tools can fall short if they’re not implemented with a deep understanding of how firms really operate,” she said. 

And sometimes the inefficiencies come from both sides at once: the survey found that only 37% of firms require clients to use their tech stack, something that Munson said “breaks my heart” as “it is so low.” A streamlined, established tech stack is needed to achieve true economies of scale, but to get there firms need to standardize their data, and to do that firms need to make sure their clients’ data is also standardized, which usually means integrated tech stacks. 

“If you have all these different clients with all these different technologies, even if your own tech stack is standardized the systems they use is different, so the kind of data you will get will be different, and the work you need to do to make it work with your data is different, and your team spends a lot of time spinning their wheels,” she said. “Once you get standardized, where everything back and forth from clients is the same, you get to see how well the teams can do their work.” 

One source of inefficiencies is a rushed implementation. Munson said that, too many times, firms are so eager to get a solution working that they don’t pay attention to all its capacities, just the ones they need right now, but once the basics are down firms still don’t circle back on the rest of the features and how they can be used to drive efficiency. 

“Most of us have been through an implementation, either in the practice or with a client, where you’re just like ‘anything to get it working. Forget about all the fancy things it does. We just needed to do the basics right,’ and then we never circle back on those better, more efficient processes. We get to sort of minimal viable, and then we forget to come back and give it an extra polish. And so what we see there is the processes get written for that basic piece, and we never update,” she said. 

But this is part of what both speakers believed was the larger problem of firms getting lost in the details of their tech stacks and not taking a broader, more holistic approach, which would enable more efficiencies. The key component to managing technology effectively, Munson said, is looking not at individual solutions here and there but thinking of the system as a whole. 

“Often, what happens is something’s wrong or something is troublesome in some way. And so [we say] what can we do to fix that one thing? And we don’t think about it holistically and get all the right folks in there so that we’re solving for the right pain points,” she said. 

Misherghi agreed, and added that this holistic extends not only to the technology a firm already has but the solutions they plan to purchase in the future. When evaluating what technology they need, she said leaders need to think not in terms of specific point solutions to particular problems but things that can support the entire workflow—plus, the onboarding, training and ongoing support from the vendor. 

“Don’t just look for features, right? Look for solutions that support your workflows from providers that understand you. For firms, onboarding and training and optimization can’t be an afterthought. They’re essential to realizing value. I think this is where vendor partnerships matter. Firms seeking the strongest results aren’t just using software, they’re collaborating with their providers, they’re staying educated, they’re making sure their tools evolve alongside their needs. The best outcomes happen when your technology partner acts like part of your team, not just part of your toolkit,” she said. 

Misherghi said that the more successful firms she’s seen think less in terms of performing particular tasks but designing an entire system that, through automation, can do those tasks for them. It is less about plugging holes and more about developing a full infrastructure. The survey found that 74% of participants have a detailed plan to add new services in the next 12 month; Misherghi noted that, among these firms, 86% have a detailed technology roadmap, which is “a wonderful mark on the evolution of the profession we’re seeing.” 

She said a good tech roadmap is more like a service design blueprint versus a shopping list. Successful firms, she said, are not just chasing features but designing intentional workflows and systems capable of scalable service delivery. Similarly, she stressed that the provider should be more than just a vendor but a strategic co-architect that can help with growing pains. 

Misherghi said this approach will become especially relevant as AI becomes more common, as integrations will be key to their effective use, which means thinking in terms of the whole system to understand where those integrations should take place. Right now, she said, people think of AI in terms of analyzing data or extracting fields, but with the rise of AI agents will require firms to focus more on coordinating between them. 

“I think the next big leap is when those systems don’t just talk to each other, they act on each other’s behalf. I think the next big inflection point will be moving from automated steps to autonomous workflows, where AI agents aren’t just analyzing data or extracting fields but actually orchestrating tasks across tools based on firm policies and context and that will change the role of the accounting profession: its less time doing the work and more time designing the system for how everything works together. So the firms that will be thriving are those who are building strong infrastructure now because that is what AI needs to deliver on its core value,” she said.

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Accounting

Trump tax bill fails in House panel

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A key House committee on Friday failed to advance House Republicans’ massive tax-and-spending bill after hard-line conservatives bucked President Donald Trump and blocked the bill over cost concerns.

The House Budget Committee rejected the bill 21-16, with Republican Reps. Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde joining Democrats to vote against it. The four hardliners demanded deeper cuts to Medicaid and other government programs.

It’s incredibly rare for bills to fail at this step in the process, with the committee vote typically serving as a rubber-stamp to the bill before it moves to the House floor. 

Representative Chip Roy
Rep. Chip Roy

Stefani Reynolds/Photographer: Stefani Reynolds/B

The setback could be temporary and the panel can still approve the bill once the GOP differences are resolved. 

Republican Lloyd Smucker, who switched his vote to “no” to allow the committee to bring it up again, told reporters the committee will hold another vote on Monday. 

Trump, whose social media muscle and calls to lawmakers have previously been crucial to advancing his priorities, inserted himself in the debate less than two hours before the vote, berating dissidents and urging them to fall into line. 

“We don’t need ‘GRANDSTANDERS’ in the Republican Party,” Trump said in a social media post on Friday. “STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

The bill’s failure exposes the power a small group of lawmakers can wield as Republicans seek to push Trump’s “one big, beautiful bill” through the House with very narrow margins. GOP infighting threatens to kill the bill, or at least significantly delay Republicans’ plans to pass the bill next week.

(Read more:‘One big beautiful bill’ full of tax surprises.”)

Republican holdouts spelled out their demands during Friday’s committee meeting, including accelerating new work requirements for able-bodied adults on Medicaid to take effect immediately rather the 2029 deadline set in the legislation. The ultraconservatives also want a faster phase-out of clean energy tax credits.

It wasn’t immediately clear how House Republicans will re-group to address the divisions and advance the bill.

“I’ll let you know this weekend if we’re going to return first thing Monday. That’s the goal at this point,” Budget Chairman Jodey Arrington said after the vote. 

House Majority Leader Steve Scalise, who is helping to broker a deal among Republicans, said party leaders are in touch with the Trump administration to address some of the changes demanded by hardliners.

“We are all in agreement on the reforms we want to make,” Scalise said. “We want to have work requirements. We want to phase out a lot of these green subsidies. How quickly can you get it done?”

House Speaker Mike Johnson on Thursday pledged he would work through the weekend to broker a compromise between moderates, who are seeking an increase in state and local tax deductions, and ultra-conservatives, who say they won’t support it without more spending cuts.

(Read more:Here are the winners and losers in the Republican tax bill.“)

Members from both factions — the SALT Republicans representing high-tax districts and the fiscal hawks who want steeper budget reductions — have threatened to block the bill if House leaders don’t acquiesce to their demands. 

“No one group gets to decide all this stuff in either direction,” Roy, an ultraconservative Texas Republican advocating for bigger spending cuts, said in a brief interview on Friday. “There are key issues that we think have this budget falling short.”

Both Roy and Norman urged continued negotiations and significant changes to the bill that could in turn jeopardize support among moderates.

“I’m a hard no until we get this ironed out,” Norman said. “I think we can. We’ve made progress but it just takes time.”

If the legislation passes the House, it would then head to the Senate where it would likely undergo significant changes. Several members, including Senator Josh Hawley of Missouri, have stated opposition to the Medicaid cuts in the House bill.

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