Membership Agreement

By using the CryptoTaxAudit.com website (the "Site") or Services, you agree to follow and be bound by these terms of use (the "Membership Agreement") and agree to comply with all applicable laws and regulations. In these Terms of Use, the words "you" and "your" refer to each customer, Site visitor, or service user; "we,” "us,” and "our" refer to Clinton Donnelly and CryptoTaxAudit; and "Services" refers to all services provided by us.

It is your responsibility to review these Terms of Use periodically. If you find these Terms of Use unacceptable or disagree with them, please do not use this Site or any Services. We may revise these Terms of Use at any time without notice to you. Please contact our customer support if you have any questions about these Terms of Use.

These Terms require the use of arbitration on an individual basis to resolve disputes rather than jury trials or class actions and limit the remedies available to you in the event of a dispute.

We will automatically bill you for your periodic (monthly or annually) membership fee to keep your coverage from lapsing. You can cancel your membership by contacting us via the contact form on the Site or by failing to pay your membership fee on time.

Other key terms used in this Agreement are:

• Audit: An audit, also called an examination by the IRS, is a formal inspection of an individual's or an entity's books and records to determine the individual's or entity's correct tax liability. A collection or enforcement letter is not an audit.

• Audit Flag: An audit flag occurs when the IRS places the following transaction codes on a member's IRS Account Transcript:

  • 420 – "Examination of Tax Return" means that the return was referred to the IRS Examination or Appeals Division.

  • 424 - "Examination of Tax Return" means that the return was referred to the IRS Examination or Appeals Division.

  • 922 – "Review of unreported income" means that the computers have determined that a tax return failed to report all the income reported to the IRS by third parties. The transaction date and process codes are updated by subsequent TC 922.

• Acceptance Date: The Acceptance Date is when we receive your initial payment for a periodic (monthly or annual) membership. If periodic payments lapse, the date the payments restart is considered the new acceptance date.

• Case: A case begins when a current member presents us with a letter from the IRS and asks us to represent them. The letter must be related to an audit, IRS Appeals, or a collection of debt. A case concludes when you agree to no further escalation of the Case.

• Case Manager: The Case Manager is your CryptoTaxAudit primary contact assigned to your Case.

• Collections Letter: A collections letter is a letter from a tax authority demanding payment or threatening enforcement actions for nonpayment.

• CP2000 Letter: An IRS CP2000 or CP2501 letter initiates a computer-driven examination of specific issues on a tax return. This letter is issued when a tax return fails to account for all the wage and income information (1099, W-2, K-1) reported to the IRS.

• Cryptocurrency: Cryptocurrency is synonymous with virtual currency and digital assets.

• Cryptocurrency Income: Cryptocurrency income includes capital gains/losses, wages, compensation and other income derived from cryptocurrency.

• Expiration Date of Membership: The Expiration Date of Membership is fifteen days after a missed periodic (monthly or annual) membership payment. In all other situations, membership terminates immediately upon email notification by either party to this Agreement.

• Initial Response: The Initial Response refers to the activities provided by CryptoTaxAudit after a member provides us with an audit or examination request from the tax authority. These activities include consultations with the member, reviewing the member's documentation, discussing with the tax authorities, and assembling and delivering initial documents to tax authorities. The Initial Response activities are considered completed after we deliver the initial documents to the tax authority.

• IRS: The Internal Revenue Service, an agency of the U.S. Department of Treasury.

• Member: You are a member if you have made an initial membership payment, are current with your membership payments, and have completed the onboarding process, including signing our IRS Form 2848. A spouse is included as a member if they have completed the onboarding process, including signing our IRS From 2848. A member can also be a business entity. A business entity member doesn't include representation for Form 1040. Likewise, representation of an individual tax return doesn't include representation of income reported on a business tax return.

• Membership Period: The Membership Period commences with the Acceptance Date. The final day of the Membership Period is the Expiration Date of Membership or the date you cancel the membership. Once the Membership Period expires, all work on any open audit cases will cease, and we will cancel any IRS representation agreement.

• Membership Plan: The membership plan is determined by the periodic (monthly or annual) payment amount signed up and paid.

• Return Preparation: Preparation of a federal or state tax return, report, or filing, whether an initial filing, an amended filing, an audit reconsideration, or in response to an IRS Substitute For Return, is never included in any membership service.

• Transcript: The IRS maintains multiple transcripts of taxpayer reporting and activity. A separate transcript is kept for each tax period. The types of individual transcripts are called Account, Record of Account, Wage & Income, Separate Assessment, and Civil Penalties. The types of transcripts for business filing separate returns are Account, Payroll, Civil Penalty, and Return.

The Services provided by the various Audit Defense membership plans are below. You agree that our representation services stated on IRS Form 2848 ("Power of Attorney and Declaration of Representation") is limited. Our representation is limited to delivering the services offered for the selected membership plan. Forwarding IRS written communications or providing tax advice are not included.

Representation and resolution of tax issues at the State or local level are not included in any membership plan, but may be available on a fee or retainer basis.

• 3.1. "Basic Monitoring" membership plan

  For "Basic Monitoring“ members, our representation service is limited to obtaining your IRS Transcripts weekly and emailing you a notification if a new IRS audit flag occurs on an account transcript (“Audit Flag Monitoring”). We also send a monthly report via email summarizing your IRS account and recent transcripts (“Account Status Updates”).

  Consultations with our staff about the information on the emails are on a fee-basis.

• 3.2. "Advisory Monitoring" membership plan

  For "Advisory Monitoring" members, our representation services are limited to obtaining your IRS Transcripts weekly and emailing you a notification if a new IRS audit flag occurs on an account transcript (“Audit Flag Monitoring”). We also send a monthly report via email summarizing your IRS account and recent transcripts (“Account Status Updates”).

  In addition, members can receive one "Initial Risk Review“ consultation, at no additional charge, to explore if aspects of the client‘s past tax filings expose the taxpayer to additional audit risk because of how cryptocurrency income has been reported. Correcting past filings is a taxpayer‘s choice at their own expense.

  Members also receive an "Audit Alert Consultation“, at no additional charge to discuss information reported on a weekly Audit Flag Monitoring email or a monthly "Account Status Update“ email.

• 3.3. "Shared Risk" membership plan

  For "Shared Risk" members, our representation services are limited to providing IRS representation services to address IRS audit, appeal, collection, and taxpayer advocacy as described below. Shared Risk membership includes all the services offered to Advisory Monitoring members

  We can coordinate our services with an additional tax representative you employ to handle non-cryptocurrency-related issues.

  • 3.3.1. Audit: We will represent you before the IRS during your federal income tax audit unless either party terminates the arrangement. Our representation will include communicating and negotiating with the IRS, and presenting information to substantiate the crypto income reporting. Understandably, we cannot guarantee any results since the IRS has substantial discretion in deciding whether to accept information presented to them. Recalculating cryptocurrency income is required at the start of an audit and is an additional fee.

  • 3.3.2. Appeal: We will represent you in the appeal of the Revenue Agent's determination that you owe additional tax, penalties, and interest. Our representation will include a review of the agent's findings, such as investigation and review of the underlying facts as we, in our sole discretion, deem appropriate, preparation and filing of the protest, and negotiation on settlement of the Case with the Appeals division.

    If the IRS has done their own cryptocurrency income calculation, a forensic analysis of the IRS calculations is required. The cost for this is an additional fee.

  • 3.3.3. Tax Court: If the Case cannot be resolved with the Appeals Officer or if a petition to the U.S. Tax Court is preferable to resolution with IRS Appeals, we will provide legal representation for your case in the U.S. Tax Court. We can discuss the merits of your case with the IRS lawyers, draft motions and documents, and litigate the case.

  • 3.3.4. Taxpayer Advocate Assistance: We will also represent you in assistance requests to the IRS Taxpayer Advocate Service. We will prepare the initial request and discuss your case with the Advocate staff until they close it.

  • 3.3.5. Collections: We will represent you concerning the collection of payment of income taxes. We will represent you through the initial administrative level of the IRS Collections Division, including conferences with Revenue Officers, managers, and Collections Due Process Appeals or equivalency hearings, as appropriate.

    Our assistance includes negotiating with the IRS installment agreements, currently non-collectible status, abatements, and offers-in-compromise.

    We will not audit or otherwise verify any information provided by you to us for presentation to the IRS during the course of service unless we deem it necessary.

    While we will advise you whether to accept the tax authority's report or proposed settlement, the ultimate decision in that matter remains yours alone. By signing Form 2848, you provided us with the authority to settle the Case for you and execute any documents necessary to settle the Case after consultation with you. However, since our general policy is not to execute documents on the client's behalf, we will ask you to execute all such documents.

• 3.4. "Full Protection" membership plan

  For "Full Protection" members, membership includes all the services offered to Shared Risk members.

  In addition, for the years under audit, we will calculate cryptocurrency income, amend tax returns, and do a detailed forensic analysis of the IRS cryptocurrency income calculations at no additional charge.

  We will also provide a courtroom expert witness on cryptocurrency reporting for no additional charge.

If you seek our assistance to represent or defend you in an IRS audit and the initial notification letter or audit alert flag about the audit is dated before the start of your membership plan at the Shared Risk or Full Protection level, then you will be charged for our preparing the Initial Response.

You will be required to maintain a Shared Risk membership for the duration of the audit.

You will also be responsible for charges for calculation of cryptocurrency income, forensic analysis of IRS calculations of cryptocurrency income, and courtroom expert witness expenses.

If you pay for us to calculate cryptocurrency income, we will exert a reasonable effort to calculate your taxable income from cryptocurrency activities. Our reconciliation analysts use third-party cryptocurrency gain calculation services to determine your taxable income. Cryptocurrency income calculation service determines the capital gain and other income.

The completeness of transaction histories and price information limits the accuracy calculation of income based on central exchange transactions.

The accuracy of income calculation from decentralized financial (DeFi) activities and non-fungible tokens (NFT) is significantly limited by numerous factors. Consequently, you may need to approximate the taxable income on DeFi and NFT transactions. Our DeFi Tax Benchmark service only measures the degree of uncertainty in determining DeFi/NFT trading income.

The work of cryptocurrency income calculation ends upon acceptance of the results.

We can defend our results in an IRS audit if you are an Audit Defense Full Protection or Shared Risk member. However, the IRS calculates cryptocurrency income aggressively, which usually requires appealing or protesting the auditor’s determination to get an equitable resolution.

There is significant uncertainty in the taxation of cryptocurrency income. The IRS has published positions on some cryptocurrency tax situations which are considered aggressive and are disputed by industry legal experts. We will prepare your results in line with the IRS positions as we understand them. Optionally, we can advise you on alternative tax treatments resulting in changes in the taxes owed. However, these positions may be challenged by the IRS if audited. In an audit, you must know that the IRS assesses interest and accuracy penalties (20-40%) on additional taxes assessed plus interest. The choice of how much taxable income to report is yours.

Your communication with us regarding your IRS issue is confidential, not privileged. Therefore, in most cases, we will only disclose our communication to third parties with your approval. Communications with us to obtain tax advice are privileged and thus protected from disclosure in a noncriminal proceeding before the IRS.

Though privileged communications are not permitted to be disclosed, even in court, there is no accountant-client privilege in criminal tax matters. Accordingly, if we are served a properly issued administrative summons compelling us to testify in court proceedings, our confidential communications may be subject to disclosure in court or to the IRS. There may be circumstances under which you may want to divulge or want us to convey certain information to the IRS or other parties. By accepting this Agreement, you acknowledge that you understand such disclosure may result in a waiver of this privilege and agree to provide us with written authority if you want us to disclose this information.

We agree to notify you if we receive a request, including a subpoena or summons, from a third party for privileged information. If you instruct us in writing to assert the privilege, we will do so to the extent law permits. You agree to be responsible for any costs we incur in asserting the privilege on your behalf. Such expenses would include our attorney's fees, court fees, and other costs imposed, including court-imposed costs, penalties, or fees. You further agree to hold us harmless for asserting or not asserting the privilege as directed by you.

We collect the information you provide from worksheets, documents, computer data files, and discussions; information provided to us at your request by brokerage houses and banks; and information that we develop as part of our engagement. We are committed to safeguarding your confidential information and we maintain physical and electronic measures to protect your information. We will not disclose any information about you unless we have your approval as permitted by law (Sections 301.7216-2 and 301.7216-3), even if you are no longer our client.

You must sign a disclosure statement if you want your records released to a third party, such as a mortgage lender.

Unless you instruct us otherwise, we may use your name and email to contact you about our products and services.

To satisfy our anti-money laundering obligations for customer due diligence, we will crosscheck data provided against lists of sanctioned and political-exposed persons.

If any dispute arises in connection with the performance of this Agreement, both you and we agree to try first, in good faith, to settle the dispute. ANY DISPUTE OR CLAIM RELATING IN ANY WAY TO THE SERVICES OR THIS AGREEMENT WILL BE RESOLVED BY BINDING ARBITRATION, RATHER THAN IN COURT, except that you may assert claims in small claims court if your claims qualify.

The Federal Arbitration Act governs the interpretation and enforcement of this provision; the arbitrator shall apply Delaware law to all other matters. Notwithstanding anything to the contrary, any party to the arbitration may at any time seek injunctions or other forms of equitable relief from any court of competent jurisdiction.

WE EACH AGREE THAT ANY AND ALL DISPUTES MUST BE BROUGHT IN THE PARTIES' INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. BY ENTERING INTO THIS AGREEMENT AND AGREEING TO ARBITRATION, YOU AGREE THAT YOU AND CRYPTOTAXAUDIT ARE EACH WAIVING THE RIGHT TO FILE A LAWSUIT AND THE RIGHT TO A TRIAL BY JURY. IN ADDITION, YOU AGREE TO WAIVE THE RIGHT TO PARTICIPATE IN A CLASS ACTION OR LITIGATE ON A CLASS-WIDE BASIS. YOU AGREE THAT YOU HAVE EXPRESSLY AND KNOWINGLY WAIVED THESE RIGHTS.

To begin an arbitration proceeding, send a letter requesting arbitration and describing your claim to CryptoTaxAudit, 12332 Sowden Rd Ste B-95616, Houston, Texas 77080. The arbitration will be conducted by the American Arbitration Association (AAA) before a single AAA arbitrator under the AAA's rules, which are available at www.adr.org or by calling 1-800-778-7879. The AAA's rules will govern payment of all filing, administration, and arbitrator fees and costs. You agree to have the arbitration conducted by telephone, based on written submissions. The decision of the arbitrator shall be final and not appealable, and judgment on the arbitration award may be entered in any court having jurisdiction thereof. This Section shall survive the expiration, termination, or rescission of this Agreement.

CryptoTaxAudit reserves the right to terminate your Membership on the breach of any material provision of this Agreement by you, or if a condition renders the completion of CryptoTaxAudit's responsibilities under this Agreement unreasonably difficult to fulfill; or at our discretion. Conditions that can cause the completion of CryptoTaxAudit's responsibilities unreasonably difficult include, but are not limited to, failure by you to reasonably meet any provision listed as your responsibility above, failure to cooperate during the Case, or repeated use of abusive, inappropriate, or unprofessional language when communicating with any staff members or representatives of CryptoTaxAudit or the IRS.

Your membership will be terminated if you do not pay the periodic (monthly or annual) membership fee or other service invoices from us on time.

If you fail to cooperate with our reasonable requests for information, misrepresent information or facts to us, or refuse to disclose information that we advise you to disclose, we may immediately terminate your membership and withdraw from this engagement without completing our representation in any matter.

EXCEPT AS PROHIBITED BY LAW, YOU WILL HOLD US AND OUR STAFF AND AGENTS HARMLESS FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGE, HOWEVER, IT ARISES (INCLUDING ATTORNEYS' FEES AND ALL RELATED COSTS AND EXPENSES OF LITIGATION AND ARBITRATION, OR AT TRIAL OR ON APPEAL, IF ANY, WHETHER OR NOT LITIGATION OR ARBITRATION IS INSTITUTED), WHETHER IN AN ACTION OF CONTRACT, NEGLIGENCE, OR OTHER TORTIOUS ACTION, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY CLAIM FOR PERSONAL INJURY OR PROPERTY DAMAGE, ARISING FROM THIS AGREEMENT AND ANY VIOLATION BY YOU OF ANY FEDERAL, STATE, OR LOCAL LAWS, STATUTES, RULES, OR REGULATIONS, EVEN IF WE HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. EXCEPT AS PROHIBITED BY LAW, IF THERE IS LIABILITY FOUND ON OUR PART, IT WILL BE LIMITED TO THE AMOUNT PAID FOR THE PRODUCTS AND/OR SERVICES, AND UNDER NO CIRCUMSTANCES WILL THERE BE CONSEQUENTIAL OR PUNITIVE DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, SO THE PRIOR LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU.

The laws of the State of Delaware govern this Agreement.

BY USING OUR SERVICES OR ACCESSING OUR SITE OR APPLICATIONS, YOU ACKNOWLEDGE THAT YOU HAVE READ THESE TERMS OF USE AND AGREE TO BE BOUND BY THEM. 

Updated 5/3/2023