IRS crypto tax audit letter confirmed by crypto tax firm

[arandon]

UPDATE

In April 2021, CryptoTaxAudit.com published the information requested by the IRS in crypto audits. Some spellings are different (e.g. "I.D." vs. "ID"), one typo was corrected ("in paper" -> "on paper"), but other imperfect wordings remained. The letter contains three additional items vs. the /r/bitcoin letter:

7. All records reconciling acquisition, whether by purchase or cryptocurrency-to-cryptocurrency (C2C) transaction, and sales, or other disposition such as C2C transaction histories or receipts and counterparties to all transactions
8. All records relating to investment expenses claimed with respect to any investments in virtual currency, including but not limited to invoices, receipts, canceled checks, bank records
9. All records relating to any lending or borrowing (on margin or otherwise) through fiat currency or in cryptocurrency

[Dave1]

^^.I guess when you don't do anything illegal for sure we have to pay taxes.

Unfortunately, when crypto becomes bigger and being adopted for different purposes, it's just a matter of time before this ABC agencies are going after it for tax purposes. So no more (pseudo) anonymity for us. But I guess this is part and parcel of being a crypto enthusiast now. Pay taxes and continue to enjoy, or used other methods to hide your wealth (privacy coins), but you should now the implications of doing this legally.

[Poker Player]

I think this will be a problem especially for those who do trading and the more operations the more the problem, although I understand that there are specific programs for this.

But a long term investor who has made several purchases and has not sold anything will have no problem, or maybe he has sold a small part of his holdings near the ATH last year can easily declare it.

[Adesuwa1]

Personally, i feel taxing is improtant, because the government needs revenue and these days, quite a bunch of people are diving into cryptocurrencies where in my region is not taxed. Good and bad. Personally i haven't been taxed ever on crypto purchases and believe that any tax above 5% PNL is unjust and sheer wickedness. and that is when I'll encourage legal consultations.

[ajochems]

Actually it’s good news ,because by paying taxes.It mean the crypto was approved by the government.It may be any value.But you can sell the same coin to usd ,in a exchange.Even if the same was banned in your own country.You can easily convert to usd and then to your currency.So as much as we come to know ,crypto was legalised and we need to pay tax,be happy.