As the IRS begins compliance work on cryptocurrency transactions, taxpayers who participate in them should prepare their documentation for scrutiny. You need to keep good crypto activity records because you may not be able to rely on your transaction platform to provide that data. However, some platforms, such as Coinbase, send Form 1099s to customers who earn more than $600 over the course of a tax year.
The IRS has suggested that during this transition period, it will be lenient with taxpayers who owe tax or haven’t kept good records because they didn’t know they’d need them. Also, the agency has talked about using artificial intelligence to enforce compliance with crypto reporting rules.
Contact one of our experts with questions about cryptocurrency tax compliance.