An estimated 40%-50% of millennials are non-compliant in reporting and crypto to the IRS. Learn the solution that helps them get back into compliance.
Did you know that roughly 40% to 50% of the entire millennial generation is currently non-compliant in reporting their cryptocurrency taxes. How is that number possible?
The millennial generation has the most significant amount of cryptocurrency ownership, while also being the newest to investing. They are also the least financially educated in understanding 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.
It started very innocently. Many taxpayers didn't know they were supposed to report crypto gains in their first year of 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’s errors. For many traders, this downward spiral continued on for subsequent years, and some level of this hiding still continues to this day.
Something that started as mostly harmless has now entered into the area of tax fraud because these taxpayers have knowingly filed an inaccurate tax return. 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. It shows how the tax system has left many young crypto investors behind.
Millennials 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.
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 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 provides Audit Defense membership, specifically for crypto traders and investors. It monitors your IRS account weekly, watching for audit flags assigned by IRS supercomputers indicating that the IRS wants to review your account for a potential audit. On average, there are 2 to 6 months between when an audit flag is registered, and when a human auditor initiates the audit. With this kind of notice, taxpayers can proactively fix and refile their tax returns before an audit starts and therefore avoid a 20% to 40% accuracy penalty.
You can examine your tax return for any errors, ensuring all the income is correctly reported. Your can recalculate your crypto capital gains and income. You can amend your return to avoid significant accuracy-related penalties. Or you can become an Audit Defense member and allow our team of experts to do it for you.
When you become an Audit Defense member, you 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 three years.
Make this the year you become compliant. Don't lose another night's sleep. Learn more today.
DISCLAIMER: Opinions and perspectives of the author, host, and guests. It should not be construed as U.S. taxpayer advice. There are often multiple interpretations of tax law. Various strategies may be suited to specific individuals and for particular situations. Seek out professional tax, legal, or financial advice from CryptoTaxAudit or from other reputable companies.Back to blog
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