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Cryptocurrency CPAs race to prepare clients for end of universal wallet accounting from IRS rule change

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Accountants in the cryptocurrency arena have been busy preparing their clients for what they characterize as a seismic shift in digital asset reporting before the safe harbor provision ends in January. 

IRS Revenue Procedure 2024-28, released in June, effectively ends the longstanding practice of “universal wallet” reporting, where people could account for their digital assets, especially cryptocurrency, as a combined pool. Under the new rules, which go into effect at the beginning of next year, people will now need to report their holdings on an account-by-account basis. Zach Gordon, founder of cryptocurrency accounting firm Red Five, called the change “monumental.” 

“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. This is a huge change, and considering how a lot of these reporting infrastructures, even on the transactional level, were built out, it’s not ideal,” he said.

Crypto tax

To illustrate, according to Gordon, consider an entity that runs a trading algorithm with many microtransactions, hundreds or even thousands per day and possibly millions per year. Accountants will need to capture all of those transactions, trace their paths through specific wallets, and identify what is and is not taxable through it all, which theoretically can be a very time consuming process. 

The degree of ease or difficulty of helping a client through this, said Gordon, comes down largely to their overall due diligence or “wallet hygiene,” which could best be thought of as maintaining certain habits to security, privacy and effectiveness of one’s accounts. This could include tracking things like which wallets serve which purpose, which assets are held in those wallets, who has custody of them and who controls them. While these things are often on a public blockchain, and so technically auditable, it won’t always be easy. 

Pat Camuso, founder of digital asset-focused accounting firm Camuso CPA, noted that assisting clients through this change is basically a matter of tracking and tracing assets through identifying the relevant data and drilling down at the transaction level on an asset-by-asset basis. This allows them to track the flow of funds so as to, ultimately, map the client’s accounts, everything in them, and what assets are inbound and outbound. He said it’s kind of like being a forensic accountant. 

“It takes a lot of digging, a lot of piecing together, just a tangled mess of a puzzle every time. And now this revenue procedure requires that whole tangled mess to be accurate,” he said, noting that today most just try to determine gains or losses and move on. 

If someone has already been practicing proper wallet hygiene, these engagements won’t be that difficult to get through. Unfortunately, many do not. For instance, both Gordon and Camuso noted that it’s not just possible but common for people to literally forget about a wallet and lose track of just how many they have. 

“I was just looking at an account from before, we’ve been doing their accounting since 2017, and there was a painful reconciliation process that covered maybe 12-13 wallets they didn’t tell us about, and several exchanges as well,” he said. 

Because the new rules increase complexity, the engagements will become more complex, which means they will take longer and cost more. But given the difficulty of navigating the labyrinth of assets held by some clients, Camuso said there’s not much other choice. 

“[You’ll need to be] going asset by asset, down a whole list, and ensuring that everything is allocated right. You may have 25 lots of Ethereum and now we have to snapshot your wallets and allocate them appropriately to each wallet, so with that level of complication, yes, that will increase fees,” he said. As for ongoing maintenance, “it has always been that tangled mess and fees have always reflected that as a result, because there is no way around that.”

Gordon, from Red Five, noted that even just scoping these engagements out have become a little more challenging—while many CPAs are moving away from the billable hour, he said it can sometimes be a struggle to determine a fair estimate for this work. However, he said he is less concerned about the economics of the matter than he is about the timing, as there’s a lot to do and not much more time to do it. 

“It seems like everything takes way longer. There’s way more stuff to do and the deeper you get the more challenging it gets to come up with the right answer. It depends on the platform. There’s the large institutional ones, and they’re going to be okay, they will figure out a way to make sure we’re ramped up and ready to go, but there’s some of the newer [blockchains] out there, the newer platforms are working hard but these standards are very hard to maintain,” he said. 

Camuso added that many of the accounting solutions used for cryptocurrency have been coded with the universal wallet methodology in mind, and many of them have not yet adjusted to the new rules, with a few exceptions. 

Ledgible, a cryptocurrency solutions provider, is one. CEO Kell Canty noted that users have always been able to select either a universal wallet or account-by-account approach, meaning that the only real change that had to happen was disabling the former option. Making the shift, though, may not necessarily be as easy as clicking a button. Canty said that the difficulty and complexity of the operation depends entirely on the user, there is no one size fits all. Some have exhaustive books and records and rules on how they document and approach allocations, and so won’t have much difficulty; others are a little less fastidious, and so may have a more difficult time. 

Canty added that another major challenge is that there are a lot of people, some of whom may not be as sophisticated as others, who either know very little about the change or don’t even know about it at all. Something as big as this, he said, you’d think they’d be more aware, but many don’t really think much about taxes and how they’re calculated until around April or October. It’s been a tumultuous year and people’s attention is being pulled in a lot of direction, he said, and this is a very intricate and complex change, so those who aren’t professionals won’t necessarily know to look into the implications of this. 

“It will be an education process. Not just among our own users but universally for the [professionals] and platforms to educate what it will mean on a going forward basis and how the safe harbor only exists up until January 1,” he said. 

As for Ledgible itself, he said they’re gearing up for customer service because they think they will soon be getting a lot of requests from users who suddenly become aware of the change. He noted this is more complex for the average used, and what’s more they’ll have to learn about it in a compressed timeframe, which he said might cause more confusion. Ledgible is also planning for an information campaign to help users understand what is happening and why. 

“It’s a little difficult to get casual users interested in the intricacies of tax regulations, but we will try,” he said. 

Compounding the challenge is the fact that while the shift from universal wallet to account-by-account reporting is the most prominent new rule, it’s not the only one. Another big change is first-in-first-out now becoming the default methodology. For years, many cryptocurrency holders preferred a highest-in-first-out methodology, which tended to produce better tax outcomes. Switching to a FIFO default methodology could have tax consequences for those who have meticulously structured their assets the other way, said Gordon. But he added that this will be a difficult thing for the IRS to enforce and wondered whether it might later permit other methodologies like last-in-first-out. 

“If you’ve been around this industry long enough, you know that enforcing something like this is challenging because you’re dealing with a lot of unique transactions … For certain groups or individuals, LIFO might make more sense for those who are very detail oriented while specific identification might make more sense [in others],” he said. “FIFO being the law of the land is potentially a big deal and I can see there being pushback from those who are trying to file compliantly, and at the same time there are also potential tax consequences as well.” 

Camuso noted that this will also require users with multiple wallets to be more meticulous in how they structure their assets. 

“Now in 2025 they’re creating a scenario where you can’t just plug your transactions in and pick the highest cost and call it a day–you must manage funds appropriately and flow of funds must match capital gains calculations. … It is to eliminate this idea of cherry picking the highest cost basis,” he said.  

When asked about the best practices they’ve found in helping clients through this situation, both Camuso and Gordon had similar advice: maintaining accurate records, both on the part of the client and the firm. Camuso noted that making sure the calculations are accurate up to that point is really half the battle, if this is covered then the allocations will not be very complex. Meanwhile, Gordon said it’s vital to understand all the wallets involved, what transitions are related to each of them, and making sure records are updated regularly. Preparation, overall, is key. Of course, this might be a tall order in October. Stil, Camuso said it’s important to make clients aware of this and to impress upon them it’s much better to do this before the Jan. 1 deadline. 

“To the degree that someone does not follow up with me before Jan. 1, the big thing is that deadline. It’s not even Jan. 15, it’s Jan. 1. If someone is lackadaisical and overlooks that, it won’t be a good sign. Then there becomes the question of what we will do next year,” he said. 

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Trump’s polls sag near 100-day mark, raising tax-plan stakes

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Voter discontent with President Donald Trump’s economic stewardship is sinking his popularity as he approaches the symbolic 100-day mark of his second term, ratcheting up pressure on congressional Republicans to pass his tax plan. 

A flurry of polls in recent days from NBC,  CNN, New York Times/Siena, ABC News and Fox News, among others, each reveal the same theme: Voters perceive Trump to be falling short on his core campaign promise to strengthen the economy. The president’s helter-skelter rollout of tariffs in early April sent global markets into shock.

A CNN poll released Sunday showed that just 39% of Americans approve of how Trump has steered the economy, the lowest of his two terms in the White House. An NBC News poll showed tariffs were also deeply unpopular, with just 39% of respondents agreeing with Trump’s tariffs rollout.

Early Monday, the president slammed the press for highlighting those numbers. 

“We don’t have a Free and Fair “Press” in this Country anymore. We have a Press that writes BAD STORIES, and CHEATS, BIG, ON POLLS. IT IS COMPROMISED AND CORRUPT. SAD!,” he posted to his Truth Social account. 

Trump rode the twin issues of the economy and immigration to his November election victory, sweeping each of the swing states and winning the popular vote. 

He cast his elixir for improving the economy as two-pronged, one being the tariffs that he wagers will spur a U.S. manufacturing renaissance and the other being the extension of his 2017 tax plan, but with added incentives, like no taxes on tipped wages or overtime and the ability for car buyers to deduct interest on the loans.

Republicans aim to pass the tax package through a process that wouldn’t require any Democratic votes, meaning that Trump along with House and Senate leadership has to keep the GOP members in lockstep in the face of voter angst. Crucially, posturing for the 2026 midterm elections will soon take hold.

“In terms of immediate electoral impact, no, Trump’s softening at the margins doesn’t threaten his leadership or standing within the party,” said Chris Wilson, a longtime Republican strategist. “Where it matters is in setting the broader tone for the GOP’s legislative and midterm posture.”

The U.S. economy is set to expand 1.4% in 2025 and 1.5% in 2026, according to the latest Bloomberg survey of economists, compared with 2% and 1.9% in last month’s survey. The median respondent now sees a 45% chance of a downturn in the next 12 months, up from 30% in March.

The party in power typically loses congressional seats during midterm elections and a recession would all but guarantee Republican losses in 2026 that could transfer control back to Democrats as Trump serves out the second half of his term, according to Republican strategists. 

That could also help keep Republicans united to pass the tax bill even as some factions disagree over spending and cost. Trump’s eroding poll numbers, though, could make it challenging for him to get everything that he wants in what he’s dubbed the “big beautiful bill.” Congress returns from recess on Monday. 

Trump has sought to calm markets after the initial shock of his tariffs by pausing them for 90 days while he says he is trying to reach individual deals with affected countries. He and top aides point to the prospect of reaching trade accords with other nations as a way to further ease market tensions and reassure voters. 

The president lashed out in an April 24 Truth Social post after Fox News’ polls showed him with a 38% approval rate on the economy and 33% on inflation. 

“Rupert Murdoch has told me for years that he is going to get rid of his Fox News, Trump Hating, Fake Pollster, but he has never done so. This ‘pollster’ has gotten me, and MAGA, wrong for years,” Trump wrote.

Trump’s strongest polling issue is on immigration in most polls.

Upcoming public appearances should help Trump reconnect with voters, gain energy from his base and sell his economic plan, according to people in Trump’s orbit. Trump is  set to hold a rally in Michigan on Tuesday to mark the 100-day milestone and he’s scheduled to deliver the commencement address at the University of Alabama on May 1. 

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ISSB ISSB proposes amendments to ease application of standards

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The International Sustainability Standards Board today published an exposure draft proposing amendments to IFRS S2, “Climate-related Disclosures.”

The proposed amendments provide reliefs to ease the application of requirements related to greenhouse gas emissions disclosures. It aims to make it easier for companies to apply the standards while retaining decision-useful information for investors. The exposure draft will be open for comment for 60 days and close on June 27. The amendments are slated to be finalized by the end of the year, subject to stakeholder feedback. 

“It is the role of a responsible standard-setter to listen to market feedback from the earliest implementation stages, and to support preparers in the application of our Standards,” ISSB vice-chair Sue Lloyd said in a statement. “As a market-focused standard-setter, we have taken steps to respond in a timely manner by proposing targeted amendments helping preparers where possible, without causing too much disruption and ensuring that our Standards continue to enable the provision of decision-useful information to investors.”

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The proposed amendments are as follows:

  • Relief from measuring and disclosing Scope 3 Category 15 GHG emissions associated with derivatives and some financial activities;
  • Relief from the use of the Global Industry Classification Standard, in some circumstances, in disclosing disaggregated financed emissions information;
  • Clarification on the jurisdictional relief to use a measurement method other than the Greenhouse Gas Protocol for measuring GHG emissions; and,
  • Permission to use jurisdiction-required Global Warming Potential values that are not from the latest Intergovernmental Panel on Climate Change.

The ISSB agreed to propose these amendments in January, following discussions of the Transition Implementation Group on IFRS 1 and IFRS 2 as well as the ISSB’s engagement activities. 

Entities can choose whether to apply the amendments’ reliefs, and jurisdictions can choose whether to adopt them without affecting the degree of their alignment with ISSB Standards. The reliefs would help preparers applying IFRS S2 by reducing the risk of duplicate reporting and the related costs associated with applying the standards.

“Proposing these amendments to a relatively new standard is not a decision that was taken lightly — we have carefully considered the need for such amendments and have sought to balance the needs of investors while considering cost-effectiveness for preparers,” Lloyd said. “Our due process is fundamentally important to us. We always consult our stakeholders when proposing changes to our standards and are balancing the need to respond to stakeholders’ needs on a timely basis with giving all interested parties the opportunity to participate in providing feedback by setting a 60-day comment period.”

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House GOP drafts cuts to federal employee pension system

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Federal employee pension benefits are set to be pared back in Republicans’ giant tax and spending package working its way through the House, another slap at a workforce roiled by Elon Musk’s cost-cutting efforts. 

The proposal, which House Oversight Committee and Government Reform Committee Chairman James Comer announced on Friday night, would force many federal civilian employees to pay higher premiums for retirement benefits and to lower their eventual benefits by changing the formula for calculating payments. 

The Oversight Committee expects to vote this week on that plan and other workforce changes. If approved, they would be combined into legislation enshrining President Donald Trump’s legislative agenda, which Republicans aim to enact by August without the help of Democrats.

Comer said in a statement that the committee’s proposal would achieve “reduction in the federal deficit of over $50 billion.”

The biggest change would be to raise the premium that many long-time federal and postal employees pay out of their salaries in the Federal Employee Retirement System. Under the current system, contribution rates are arranged by the year an employee started: 0.8% in 2012 and earlier; 3.1% if hired in 2013, and 4.4% if hired in 2014 and afterward. The change would have employees pay 4.4% to raise $30.7 billion over a decade, according to the statement.

The proposal would also try to save $4.75 billion by basing retiree pension benefits on the highest five years of salary rather than the current three highest years. Those benefits are calculated based on top salary received and number of years in the U.S. workforce.

Other changes being proposed include eliminating supplemental retirement benefits for those who retire before age 62 and are unable to yet collect Social Security, and auditing family members of federal employees to see if they are eligible for health benefits.

Republicans argue that federal employee benefits are too generous compared to the private sector. At the same time, federal employees traditionally accept lower salaries than in the private sector partly because of the promise of those benefits. 

Republicans are planning a House floor vote next month on the larger legislation. The bill would then be sent to the Senate, where it could pass without the help of Democrats so long as the targets in the budget resolution the chambers already adopted are followed.

The House GOP has a goal of finding at least $2 trillion in savings to partially offset the cost of extending the 2017 Trump tax cuts, adding new cuts to taxes on overtime, tips and providing new breaks for older people and car buyers. The Senate has given itself leeway in its portion of the budget plan to make as little as $4 billion in cuts.

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