Did you know that roughly 40 to 50 % of the entire millennial generation is currently non-compliant in reporting their cryptocurrency. How is that number possible?
The millennial generation has the most significant amount of cryptocurrency ownership, while also being the newest to investing and the least financially educated in understanding their crypto tax liabilities.
Why don't millennials understand their crypto tax liabilities?
The IRS has unintentionally criminalized an entire generation by providing scant direction on cryptocurrency tax law. Now many people are frightened and unsure of just how to make things right.
How did this happen?
It started very innocently. Many taxpayers didn't know they were supposed to report crypto gains in their first year owning cryptocurrencies. Their accountant didn't ask the right questions about reporting crypto. Neither did tax software programs like TurboTax or H&R Block. They only learned they should report their cryptocurrency gains and losses in year two, but they didn't know how to go back and fix the prior year errors. And for many traders, this downward spiral continued on for subsequent years and some level of this hiding still continues to this day.
Many taxpayers have now moved from tax ignorance to tax avoidance...
Something that started as harmless has now entered into the area of tax fraud because these taxpayers have knowingly filed an inaccurate tax return. And as subsequent years pass, this behavior progresses into what the IRS considers tax evasion.
Millennials do not want to be considered tax evaders...
Nobody in this situation wants to be a tax evader, but many feel that the IRS will ask questions about the years prior if they try to report their crypto gains now. This scenario describes many young people with a legitimate fear. And it shows how the tax system has left many young crypto investors behind. They want to get compliant, but now the price feels too high. We need a solution to help these investors get back into compliance with their crypto taxes.
Could amending your past tax returns flag you for an audit?
Many people ask if they should fix prior-year tax returns where they hadn't reported crypto income correctly. In my practice, we have noticed that amended returns are being selected for audits 5 times more often than original returns. And trust me, nobody wants the agony or expense of being audited by the IRS. Recent breakthroughs in technology now allow traders a better option for handling past returns so that they can sleep better at night.
CryptoTaxAudit is like radar against an IRS audit.
A CryptoTaxAudit Early Warning membership monitors your IRS account weekly, watching for pre-audit flags assigned by IRS supercomputers indicating the IRS wants to review your account for a potential audit.
On average, there are 4 to 6 months between when an audit flag is registered and a human auditor initiates the audit. So taxpayers can proactively fix and refile their tax returns before an audit starts and thus avoid a 20 to 40% accuracy penalty.
CryptoTaxAudit is cutting-edge technology, and there is no other service to protect you from an IRS audit like our Early Warning and Audit Defense memberships.
What can crypto traders do to protect themselves with this advance notice?
- Examine your tax return for any errors, ensuring all the income is correctly reported
- Recalculate your crypto capital gains and income
- Amend your return to avoid significant accuracy-related penalties
How does CryptoTaxAudit provide crypto traders with this cutting-edge technology?
When you become a member, you will sign an IRS Form 2848, Power of Attorney and Declaration of Representative, that allows us to communicate with the IRS on your behalf. We then monitor your IRS account on a weekly basis and alert you as soon as an audit flag is identified so that you can begin to take any necessary steps to protect yourself.
Unlike other services, we look at all possible years that the IRS could issue an audit letter, not just the last 3 years.
Make this the year you become compliant.
We offer Do-It-Yourself and Full-Service tax preparation solutions.
We offer a DIY tax preparation course so that you can learn how to Do Your Own Bulletproof Crypto Tax Return.
This masterclass includes step-by-step instruction by Clinton Donnelly and includes tax disclosures proven to reduce the chance of an IRS audit.
Don't lose another night's sleep. Sign-up today and get control of your crypto tax obligations.