The Crypto Taxman is Coming. Should You Be Worried?

[{"selector":"#anim-74e6e1c1-1442-453d-a1a8-38de7ef83442","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-be2b3fa1-13b1-4579-9027-6c82447aada1","keyframes":{"transform":["translate3d(-105.58511%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ef6b17a4-37fd-47bf-a2d2-60cbd1cc9c1f [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(7.817772522442576%, 0, 0)","translate3d(0%, 0, 0)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}]

The IRS is going after crypto profits like never before

[{"selector":"#anim-3a79f2a7-e773-4d5b-b0ab-0ce0b32b0281","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-36680461-7d97-4c0f-94b6-81f0b622e672","keyframes":{"transform":["translate3d(-107.7135%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-62cd5327-e739-441e-b37d-3f9e25adca28 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(31.240316969414234%, 0, 0)","translate3d(0%, 0, 0)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}]

If crypto owners make a good effort to calculate and pay what they owe, they are unlikely to face serious consequences

[{"selector":"#anim-b56850d0-0206-43aa-b886-2a4ef04932a2 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-31.249999886225726%, 0, 0)","translate3d(0%, 0, 0)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-c14d11a1-68e2-44f2-a730-d1310a0551ad","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-96018772-fce7-4ff6-a847-15f8646701b8","keyframes":{"transform":["translate3d(-108.57142%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

April 18 is the deadline for filing taxes in the U.S., and, just like last year

[{"selector":"#anim-22aa6c5f-af62-4a94-852e-70d888d80bfd [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-31.287202267403853%, 0, 0)","translate3d(0%, 0, 0)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-32e5feb7-e210-4568-a72b-4308c68c7bfe","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-533cae62-467f-41e9-85a0-7944799e6fe6","keyframes":{"transform":["translate3d(-108.57142%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

This shows the Treasury Department now regards crypto taxation as an important source of income

[{"selector":"#anim-7b4308d2-562b-4431-ac20-afe25ea00f99 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-cd6ddf00-e154-486d-a13c-769c52e1752a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-57fc98ae-f07d-4afd-8f75-9d9d02f93b7f","keyframes":{"transform":["translate3d(-109.71429%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

Is the IRS up to the job? Even as the IRS move to process this year's tax returns, it still has a backlog or nearly 20 million filings from last year

[{"selector":"#anim-4fc8efb4-1132-4b32-b318-4de75f1e310f [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(-1.0658141036401503e-14%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-cfbf1d5b-20ea-4662-ba31-cc6436172258","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-51932d96-d4be-4cc8-bf4c-3eecf59b04a4","keyframes":{"transform":["translate3d(-110.28571%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

The IRS's task is especially difficult when it comes to DeFi, where crypto traders have made enormous amounts of money

[{"selector":"#anim-f6368439-f95e-4356-9324-63a1af29d7e6","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-7ee77269-6a69-48ff-820b-8321fee7d3cc","keyframes":{"transform":["translate3d(-110.28571%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-07fc68c0-2b25-4946-b6ff-a9f71b176bdf [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}]

What happens if you're audited? While the IRS has made clear they expect people to pay tax on their crypto earnings, for many it won't be clear how much they owe.

[{"selector":"#anim-e05df566-8c04-4c01-b5d3-359f24fdfa8e [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-c73b7b3a-5218-4756-a70c-13947b8a007c","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a7166137-11d1-4cab-b6e6-f08001508d44","keyframes":{"transform":["translate3d(-108.28403%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

Even the smallest crypto transaction can give rise to a capital gain obligation, while the cost basis for any profit may not be obvious

[{"selector":"#anim-acc1c9e0-27ac-4728-a99d-edfb2a2a87ae [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-98dc4991-953b-401b-a787-91ee51ffffbc","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b9b70511-c40a-41f7-8c5e-e035dee5485c","keyframes":{"transform":["translate3d(-107.98817%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

But even relying on these specialty services doesn't guarantee a crypto owner will calculate what the IRS believes is owed

[{"selector":"#anim-1d491dbb-305f-4b15-b689-a58d2ad85dbd [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(31.287202267403853%, 0, 0) translate(25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.14,.34,.47,.9)","fill":"forwards"}] [{"selector":"#anim-f9cc19f2-310c-4dc0-93d1-c16e7cb4bf71","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ec7076eb-c0c0-401e-98ab-72ba81398f32","keyframes":{"transform":["translate3d(-108.28403%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}]

The Crypto Taxman is Coming. Should You Be Worried?

cryptocurrencyat.com

The IRS is going after crypto profits like never before

cryptocurrencyat.com

If crypto owners make a good effort to calculate and pay what they owe, they are unlikely to face serious consequences

cryptocurrencyat.com

April 18 is the deadline for filing taxes in the U.S., and, just like last year

cryptocurrencyat.com

This shows the Treasury Department now regards crypto taxation as an important source of income

cryptocurrencyat.com

Is the IRS up to the job? Even as the IRS move to process this year's tax returns, it still has a backlog or nearly 20 million filings from last year

cryptocurrencyat.com

The IRS's task is especially difficult when it comes to DeFi, where crypto traders have made enormous amounts of money

cryptocurrencyat.com

What happens if you're audited? While the IRS has made clear they expect people to pay tax on their crypto earnings, for many it won't be clear how much they owe.

cryptocurrencyat.com

Even the smallest crypto transaction can give rise to a capital gain obligation, while the cost basis for any profit may not be obvious

cryptocurrencyat.com

But even relying on these specialty services doesn't guarantee a crypto owner will calculate what the IRS believes is owed

cryptocurrencyat.com