Crypto Investors Face Tax Uncertainty as Key IRS Officials Resign

Crypto tax is perhaps the most feared tool in the government’s arsenal to regulate the explosive growth of digital assets. An uncertainty here is never a welcome sign. The crypto community in the US is now looking at a new type of tax uncertainty as two senior IRS crypto officials leave at a crucial juncture. 

Seth Wilks and Raj Mukherjee, who helped develop the digital asset policy, have left their posts just as the 1099-DA form nears its first enforcement deadline. They joined the IRS just last year and stepped away from their roles on May 2 under a federal DOGE’s voluntary resignation program. 

Their exit comes as traders, platforms, and tax professionals prepare for the mandatory use of the 1099-DA form in 2025, a form created to help brokers report crypto activity more accurately and consistently.

Crypto Tax Leaders’ Resignations Leave a Critical Gap

Wilks and Mukherjee were leaders of the IRS Digital Asset Initiative, and they were responsible for guiding how crypto activity should be tracked and reported. They were brought in to help lead the agency’s efforts to build service, reporting, compliance, and enforcement programs on cryptocurrency and other digital assets. 

The duo’s work has shaped key aspects of the 1099-DA form and also helped align tax implementation with blockchain practices.

Now with both out of the office, the crypto tax regime faces a leadership vacuum. Without clear replacements, users and exchanges may not know what to expect from the IRS in the next few months. Any delay in guidance can increase the compliance risk or lead to confusion during the next tax cycle.

Digital Asset Rules May Shift Without Industry-Informed Leadership

Both leaders brought crypto industry experience into the IRS. Wilks previously worked with TaxBit, and Mukherjee held senior tax roles at ConsenSys and Binance. This helped build a bridge between regulators and platforms, and that balance can be lost if successors lack the same understanding.

The pair also worked on DeFi reporting rules, some of which were reversed by Congress earlier this year. Clarity on those rules may also be delayed with their departure.

IRS Staff Exits Add Pressure Before 2025 Filing Begins

Earlier this year, the Department of Government Efficiency (D.O.G.E.) introduced a voluntary resignation program that offered federal employees the option to leave the workforce early. More than 20,000 IRS staff members signed up, including those in digital asset oversight. 

This tsunami of exits created major staffing gaps across departments. And since then, the IRS has not named any successors for its crypto tax division yet. Until the appointments, the crypto community is likely left without any clear direction.

Amid the policy uncertainty, the crypto community has been urging the government for clarity for a long time now. The prominent crypto lawyer John Deaton recently outlined a five-point plan for crypto regulation in the United States, calling for urgent action to establish clear rules.