I think it is probably because of the claimed losses. I am not a tax professional, but claiming losses on BTC (while it is so new and not yet understood), probably raises red flags for an audit.
Yeah that's what I was thinking. I know claiming that you run a small business, especially out of your home, really sets you up to be audited. Probably same thing with claiming losses from mining. I mean, anyone could "claim" that, and it's a new thing (Bitcoin) so I'm sure they're going to audit anything like that. It's like I could work a full time job and then claim losses from mining or whatever so I didn't have to pay taxes on money I earned from my job. The IRS is not going to like that.