While cryptocurrency reporting to the IRS has increased, TCU Neeley School of Business assistant professor Tyler Menzer finds substantial underreporting persists, with distinct differences in age, investment patterns and trading behavior among crypto taxpayers.
March 27, 2026
By Neeley Analytics Initiative
As cryptocurrency adoption expands, IRS data analyzed by Tyler Menzer, assistant professor of accounting at TCU Neeley School of Business, shows reporting behavior lagging behind ownership trends. His research, conducted with co-authors Jaron Wilde and Jeff Hoopes and published in the Review of Accounting Studies, uses anonymized confidential IRS data from more than 1.3 billion tax returns to examine how cryptocurrency reporting has changed over time and what that reveals about taxpayer compliance.
The study, “Who Reports Cryptocurrency to the IRS?”, finds that while crypto reporting has increased, noncompliance likely remains substantial. The researchers identify 17.4 million individuals in the U.S. who reported cryptocurrency transactions but estimate that only 32% to 56% of cryptocurrency owners may actually be reporting them. The findings suggest that growth in reporting does not necessarily mean most taxpayers are fully compliant.
From Practice to Research
Menzer’s interest in the topic began before his PhD, when he worked in public accounting during the 2017 bitcoin boom and became the person colleagues turned to with crypto tax questions. That practical exposure helped shape a research agenda focused on how tax systems respond when new technologies outpace traditional reporting structures. As he explained, cryptocurrency has often functioned like a potential tax haven because of its anonymity and the lack of third-party reporting that exists for wages and many financial accounts.
What the Data Reveals
The data also reveals that crypto taxpayers differ from the average taxpayer in meaningful ways. They are becoming younger over time and are more likely to hold speculative investments such as meme stocks. Reporting also rose after 2019, when the IRS added a cryptocurrency question to the tax return - a simple design change that appeared to improve reporting for some individuals. The study shows that small reporting prompts can influence behavior, offering policymakers a practical lever beyond audits alone.
Preparing Students for a Data-Driven Business World
In conversation with the Neeley Analytics Initiative, Menzer emphasized that this work also connects directly to students preparing for careers in accounting, analytics and business. He noted that data analytics is not just about running code. It is also about using data to produce useful insights and understanding how systems work behind the scenes, including how the IRS receives returns, analyzes them and enforces tax law.
Menzer also shared a timely perspective on AI in business education: “AI doesn’t make knowledge less important. It makes it more important than ever.” He believes the strongest students will be those who build baseline knowledge and use AI as a force multiplier, rather than as a shortcut around learning.
Looking ahead, Menzer is continuing research on cryptocurrency tax reporting, including how new third-party reporting rules may affect compliance and how different crypto tax service providers can produce very different taxable income calculations from the same transaction history. His work highlights not only the complexity of modern tax compliance, but also the growing need for professionals who can turn large, messy data into meaningful decisions.
Learn more about Menzer’s research.
