Cryptocurrency Tax Assistance

The recent battle between the IRS and Coinbase marks the IRS’s new focus on ensuring that cryptocurrency users pay their taxes. Considering its history of pursuing offshore accounts, we expect to see aggressive and persistent IRS activity in this area in the coming years.

The tax attorneys at Moskowitz, LLP have assisted numerous taxpayers with issues surrounding their cryptocurrency tax holdings – we can represent you with tax reporting, audits, and litigation if necessary.

Cryptocurrency tax issues

Examples of Cryptocurrency issues that we handle include, but are not limited to:

• The creation of tax-efficient businesses that utilize cryptocurrency (including virtual currency structures for marijuana-related companies);
• Filing both new and amended tax returns that properly report capital gains from the sale or transfer of cryptocurrency (including virtual currency used to pay for goods and services);
• Legal opinions for ICOs;
• Money-saving strategies for crypto day traders;
• Getting companies into compliance with employment tax rules, such as withholding payroll taxes on wages paid with virtual currency;
• Tax Audits and Tax Litigation;
• Regulatory compliance.

IRS Disclosure Program(s)

If you have not yet reported your virtual currency transactions, you should consider amending prior years’ tax returns and/or participating in the IRS Voluntary Disclosure Program. Keep in mind that if the IRS deems the failure to report your cryptocurrency holdings as fraudulent, there is no time limit for the agency to audit fraudulent tax returns.

Tracking cryptocurrency cybercrimes

Since 2011, cryptocurrency has been the preferred method of exchange for cybercriminals worldwide. The IRS and taxing authorities worldwide have recently prioritized the investigation of cybercrime involving cryptocurrency and are actively pursuing cases involving the use of virtual currency in money laundering, digital account takeovers, ICO scams, and mining fraud.

Pseudonymous

Pseudonymous and anonymous are not synonyms. The partnership between the IRS and the prominent blockchain analytics group chainalysis is not a secret. The objective of the IRS is to more effectively audit actors in crypto-space who are subject to US tax law. A technical understanding of both the ledger history and metadata will allow the IRS to streamline their audits.

Turn your hobby into a business

If you mine cryptocurrency as a hobby, you may be entitled to tax savings by turning your operation into a business. The tax attorneys at Moskowitz LLP are well versed at legally creating business entities and determining exactly what kind of business classification is the most cost-effective, efficient, and beneficial.

Skilled cryptocurrency tax attorneys

Document and report your cost basis and digital currency transactions! Failure to report your cryptocurrency could result in fines of up to $250,000 and prison time. If you have unreported cryptocurrency income, have been notified of an impending audit, or are currently under investigation, consult with one of the skilled tax attorneys, at Moskowitz, LLP.