What a Crypto Tax Audit Looks Like

You open your mailbox and BOOM, a letter from the IRS. Youre being audited for your crypto activity.

Here is what a crypto tax audit looks like:

1. An IRS audit often begins with a very detailed document asking for all of your wallets and exchange information. The IRS will comb through your data looking for missing information and gaps. So if you left out any information, expect them to ask for it.
2. The IRS takes all your crypto activity and then will generate a gain and loss report, but don't expect them to be calculating too many losses. The IRS will typically calculate your gains in a way that's least favorable to you
3. Not all hope is lost. You or a tax profesional can provide the IRS your calculations and argue to them why theirs are wrong and yours are correct.
   

Disclaimer: The information provided pertains to the United States. Information contained in this post and in the comments is intended for general informational and educational purposes and does not constitute legal advice. Reading this post, reading the comments, receiving a reply to your comment, or sending a direct message to this account does not create an attorney-client relationship. Contact an attorney for legal advice regarding your specific situation.