Draper, Utah/USA, 1st July 2026
Draper, Utah/USA, July 1st, 2026
Crypto Tax Made Easy reconstructed an nameless shopper’s blockchain and change data throughout an IRS audit, and Securus Advisors represented the shopper earlier than the IRS, supporting the place that disputed Poloniex withdrawals had been transfers between the taxpayer’s personal wallets quite than new taxable earnings.
Crypto Tax Made Straightforward, a cryptocurrency tax accounting agency, has reported the decision of an Inner Income Service (IRS) audit wherein an nameless shopper’s estimated tax publicity of roughly $1.55 million was decreased to a settlement of about $148,000, together with penalties and curiosity.
The IRS can acquire cryptocurrency change knowledge on particular person customers by way of John Doe summonses, however that knowledge could not mirror a taxpayer’s full transaction historical past. On this case, the IRS obtained knowledge indicating unreported transactions on a previous return. As a result of the Poloniex change had stopped supporting U.S. buying and selling, the shopper couldn’t acquire their very own data from the change and couldn’t initially show that withdrawals to a private pockets originated from funds the shopper had earlier deposited.
In line with the shopper, the IRS assessed roughly $4.2 million in unreported earnings and capital beneficial properties, an quantity the shopper understood might have produced roughly $1.55 million in tax legal responsibility. The disputed funds had moved from the shopper’s private pockets into crypto exchanges and later again right into a pockets the shopper managed. With solely partial change knowledge accessible, the withdrawals could possibly be learn as new earnings quite than self-transfers.
“The IRS has knowledge, however the knowledge doesn’t at all times clarify the complete transaction historical past,” stated Matt Walrath, Founding father of Crypto Tax Made Straightforward. “When a taxpayer can’t doc pockets possession, change deposits, withdrawals, and value foundation, a switch may be misinterpret as earnings.”
Crypto Tax Made Straightforward reconstructed the transaction historical past from blockchain data to hint the shopper’s internet flows between private wallets and the change. Securus Advisors, by way of tax legal professional Ephraim Olson and associate Michael Bergloff, represented the shopper earlier than the IRS and introduced the proof that the cryptocurrency originated in a pockets owned by the taxpayer, that the taxpayer had deposited these funds into crypto exchanges, and that the later withdrawals returned the funds to a pockets the taxpayer managed.
This supported the place that the disputed exercise consisted largely of transfers between accounts the shopper already owned quite than new taxable earnings. The matter was settled for about $148,000, about 9.5 p.c of the unique estimated publicity. In line with the shopper, greater than $80,000 had already been spent on prior attorneys and accountants earlier than the corporations had been engaged.
“Crypto tax protection will depend on whether or not the data may be defined in a manner an examiner can observe,” stated Michael Bergloff, Licensed Public Accountant and Associate at Securus Advisors. “Uncooked change knowledge could present funds shifting out with out displaying that the identical taxpayer moved funds in first.”
The IRS treats digital belongings as property for U.S. tax functions. A switch of belongings between wallets or accounts that the identical taxpayer owns or controls is usually not a disposition and doesn’t by itself create taxable earnings. Establishing that character can change into troublesome when change data are incomplete, restricted, or unavailable to U.S. customers, which is the circumstance on the heart of this audit.
Previous outcomes don’t assure future outcomes. Every tax matter will depend on its info, data, tax years, jurisdictions, and the positions taken by the taxpayer and the taxing authority.
About Crypto Tax Made Straightforward
Crypto Tax Made Easy is a cryptocurrency tax accounting agency of full-time crypto tax specialists. The agency has served greater than 730 purchasers throughout america, United Kingdom, Australia, Canada, New Zealand, and Europe, reconciling greater than 6.7 million transactions. Extra data is out there at https://cryptotaxmadeeasy.com/.
About Securus Advisors
Securus Advisors, which represented the shopper earlier than the IRS within the matter described, is a crypto CPA agency supporting purchasers with tax planning, advisory, and IRS illustration. Extra data is out there at https://securusadvisors.com/.
Contact
Director
Matthew Walrath
Crypto Tax Made Straightforward
matt@cryptotaxmadeeasy.com
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