Big Exit: Trish Turner Resigns IRS Amid Crypto Tax pressures

Head of IRS Crypto Division Trish Turner Resigns Amid Budget cuts

Breaking news: Internal Revenue Service’s (IRS) crypto division head Trish Turner has officially announced her exit from the organization on 22nd August 2025.  Trish has significantly contributed to the development of regulatory oversight for digital assets. Furthermore, she added that she was proud of transforming crypto from a niche subject into a mainstream regulatory focus. 

She also emphasized that the groundwork laid by the IRS during her leadership would help regulators and taxpayers navigate the complex world of digital currencies. 

New Role at CryptoTaxGirl and Asset Reality

Turner will now join CryptoTaxGirl, a U.S.-based crypto tax advisory firm, as Tax Director. She will also work with Asset Reality in the UK, a company that assists individuals and businesses in the management of digital assets and compliance requirements.

Laura Walter, founder of CryptoTaxGirl, welcomed Turner’s move, saying her arrival would give clients “a higher level of protection and guidance.” Turner’s shift highlights how expertise built within government agencies is increasingly finding its way into the private sector.

IRS Facing Instability and Brain Drain

Turner’s resignation is not an isolated event but part of a larger trend of instability within the IRS. Just two days earlier, President Donald Trump dismissed IRS Commissioner Billy Long. This year alone, the agency has seen six commissioners come and go, signaling ongoing leadership turbulence.

Alongside these challenges, budget cuts and workforce reductions have further weakened the organization. In the 1990s, the agency employed around 113,000 workers. Today, that number has dropped to about 76,000, sparking concern over whether it can effectively manage new responsibilities, especially cryptocurrency tax filings.

Source: MetaEra On X

Rising Pressure of Crypto Tax Rules

The IRS is likely to implement more stringent tax policies meant to tackle an alleged $50 billion tax gap. And with a declining workforce and few resources to modernize. Their $80 billion modernization fund was recently discontinued, so it is feared that it may be ill-equipped to handle the influx of cryptocurrency-related cases.

A report published in the Journal of Financial Economics in 2023 showed that 40% of former regulators have moved into fintech or crypto firms within two years of their departure, a trend that the report described as a brain drain. The move by Turner falls right in line with this trend.

U.S. Regulatory Climate Softens on Crypto

To make the situation more complicated, the U.S. regulatory stance on crypto seems to be mellowing. The Securities and Exchange Commission (SEC) has recently abandoned a number of high-profile enforcement cases, sending a signal that the regulator is softening its approach to the $2.5 trillion crypto market.

This paints a mixed picture: although regulatory agencies are internally straining under the pressure of increased enforcement, the overall regulatory environment is relaxing, causing concern that compliance and enforcement efforts can keep up with the fast-growing industry.

Shift of Power to the Private Sector

The exit highlights the difficulties of the agency when cryptocurrency taxation is gaining more significance than ever. Her transition to privately owned companies such as CryptoTaxGirl and Asset Reality reflects a larger trend--knowledge about regulation is being commoditized outside the government.

With the government organization undergoing financial constraints, leadership changes, and IRS staffing Reduction. The loss of Turner is both a blow to the agency and a win to the private sector. It leaves unanswered questions about how well the IRS will be able to ensure the taxation of crypto in the future.