Are you prepared for a Cryptocurrency Audit?
March 23, 2018, the IRS issued IR-2018-71, “reminding taxpayers to report virtual currency transactions.” This is a good indication that cryptocurrency is on the IRS radar, and may soon be the subject of IRS (and state) Audits. The same audits are currently happening in Canada (with the CRA).
In 2016, the IRS issued a “John Doe” summons to Coinbase, demanding the release of the personal information of account holders. After the dust settled in court, Coinbase provided this IRS with the identifying information 14,355 Coinbase account holders. According to the IRS, only 802 taxpayers reported cryptocurrency transactions in 2015. They realize there may be a substantial amount of unreported income out there and they want a piece of it.
If you didn’t fully report your Bitcoin, Ethereum or other crypto transactions in prior years, now is the time to get current. It is always better to fix things before the IRS comes looking for you and especially to get out ahead of potential penalty and interest.
If you’ve already been selected for an audit, you want someone in your corner who is knowledgeable in the nuances of both the tax code and the blockchain. Cloud Tax Accountant can represent taxpayers before all levels of the IRS and the Canada Revenue Agency. We understand the technical aspects of cryptocurrency that other practitioners might miss.
An IRS or CRA audit can be a scary experience, you should want the best people working on your behalf. Contact us today at [email protected].