It used to be up to each trader to report their crypto gains to the IRS. It totally relied on the trader's honesty (ha ha). But from 2023, it's all going to change.
No worker or stockmarket trader has ever been able to evade tax on their earnings, because the broker or the boss would send the necessary info to the IRS. NFTS and crypto have never had those requirements.
But a new law has been passed - the 'Infrastructure Law'. It says that any broker who deals with crypto transactions has to send the customer and the IRS the same 1099 form that a stockbroker uses.
On top of that, businesses have to tell the IRS when they get more than $10,000 in crypto (they already have to do that for cash).
The good part is that it's basically a sign that crypto isn't going to completely crash or disappear. And some nerds might like to see all their transactions laid out for them.
But it means you can't get away with not paying tax and you can't keep your dealings secret.
It also means things are going to change when you register for a wallet. Whereas you used to often get away with just a name and email, now you'll have to do a full blown identity check with photo ID, face recognition, etc. And different brokers will have to keep track of all your transactions as they go between them.
Obviously, you don't have to pay tax for buying crypto - but you do when you sell or exchange it. And if there are any complications, like the price changed between when it was recorded on your tax form and the moment you actually exchanged it (with crypto being just a tad volatile) you have to explain the whole thing to the IRS.
There could be some big problems, like miners or developers being treated as brokers and having major tax requirements. Plus, it's not clear whether DeFi and NFT organizations count as businesses. Supposedly that will all be cleared up by 2023.
TLDR: we're all going to be taxed, it will suck and add a layer of boredom, but at least it means crypto's here to stay.