Digital assets have become an increasingly popular method of payment and an asset for investment or trading. Because many transactions involving digital assets fall outside the scope of information reporting rules, on August 25, 2023, the government issued proposed regulations for them. The new rules are intended to make it easier for taxpayers to track and report their gain or loss from dispositions of digital assets, and to enable the IRS to focus its audit efforts on taxpayers more likely to have underreported income from digital asset transactions.