Frequently Asked Questions

This page provides a list of common questions about CryptoTaxAudit.
If you have a question that is not answered here, please contact us.

How does it work?

You pay a small annual subscription fee and we defend you in any IRS examination of your crypto activity that you receive notice of while a member. If you get a letter from the IRS, you pay a small fee for the initial consultation call on that case. Any further interactions with the IRS on that case are no charge, including – drafting written responses, escalating IRS management, researching laws, communicating with the IRS, and updating you on the progress.

What should I do if I get a letter from the IRS?

The first thing to do is to go to the CryptoTaxAudit.com website and schedule a call. If you’re already a member of CryptoTaxAudit, log in to your account to schedule your call. If you are not a member, please click here to schedule a call to get a quote for our Crypto Audit Representation. We will then be in touch with instructions on how to upload to our secure file system a copy of the letter you received and a copy of the federal and state tax return under question. We strongly advise against talking to the tax authorities directly. They record every conversation. What you say can be used against you.

Why do I pay for an initial consultation on a case?

Subscribers call about a lot of other issues that aren’t crypto defense-related. We want to help all subscribers, but our time is valuable. So we charge for every consultation. For a crypto audit defense subscriber, only the initial consultation call of a crypto case is charged.

Can you help if the IRS letter is not about cryptos?

Yes, our parent company, Donnelly Tax Law, resolves all types of examinations and audits. We also handle debt collection issues, including installment agreements and offers in compromise. To get a quote for such services, please schedule a consultation call at Donnelly Tax Law.  

Should I wait until my tax return is done before buying CryptoTaxAudit?

No. You can buy protection now to protect your prior returns. When you do file your current return, it will automatically be covered by CryptoTaxAudit.

How is CryptoTaxAudit superior to TurboTax’s TaxAudit?

TurboTax’s TaxAudit claims no expertise with cryptocurrency reporting. For $49.99, they provide coverage of one return for three years, which is the “typical statute of limitations”. But crypto returns need coverage for six years. CryptoTaxAudit covers all tax returns from any year subject to examination. Finally, TurboTax’s TaxAudit doesn’t do anything until the IRS audit letter is received. CryptoTaxAudit provides resources to repair poor returns before the IRS contacts you.

How is CryptoTaxAudit superior to ProtectionPlus?

ProtectionPlus is an audit defense plan recommended by TaxACT and by accountants using certain professional tax software packages. ProtectionPlus is an audit defense service. Their services are paid by the hour. They claim no expertise in cryptos. ProtectionPlus doesn’t protect amended returns or FBAR forms. They don’t do anything until the IRS audit letter is received. CryptoTaxAudit provides resources to encourage repairing poor returns before the IRS contacts you.

How is CryptoTaxAudit superior to H&R Block’s Peace of Mind Extended Service Plan?

H&R Block’s Peace of Mind Extended Service Plan only covers IRS representation if they make a mistake. It’s about their peace of mind, not yours. Tax software rarely makes mistakes. It’s the taxpayer that supplies incorrect information that causes mistakes. Garbage in; garbage out. They don’t defend you if they’re not at fault on the return. They claim no expertise in cryptocurrency reporting and they don’t defend the FBAR form.

CryptoTaxAudit covers all tax returns from any year subject to examination. Finally, they don’t do anything until the IRS audit letter is received. CryptoTaxAudit provides resources to encourage repairing lousy returns before the IRS contacts you.

Why is the statute of limitations six years on crypto tax returns and not just three years?

Under the Internal Revenue Code 6038D(b)(2)(B), a crypto-to-crypto trade is very likely to be a specified foreign financial transaction that must be reported on Form 8938. When you exchange a cryptocurrency with an anonymous person, you can not assume the other person is an American taxpayer.

Per the Internal Revenue manual 25.6.1.9.5.3, a tax may be assessed within six years after the original return was filed (IRC 6501(e)) if the taxpayer omits more than $5,000 in income attributable to foreign financial assets required to be reported on Form 8938.

What happens if I have an open case and my annual subscription ends?

You should renew your subscription until your case is closed.

Can you defend my return if I claimed like-kind exchange treatment for my cryptos?

Yes. We have done the legal research and have built the legal case supporting like-kind exchange treatment of cryptos prior to 2018. We feel it is a strong position and we can win if challenged by the IRS.

Can you defend my mining income?

Absolutely. Mining income and expenses are reported on Schedule C business income.

What is not covered by CryptoTaxAudit?

Read the membership agreement to see a list of what is not covered.

Is CryptoTaxAudit an insurance policy that I won’t have to pay the IRS anything?

No. You are responsible for all taxes, interest, penalties, and fines assessed by the tax authorities, not us. We can represent you and put the best legal case to the authorities to the goal of avoiding or minimizing charges from the IRS. We also offer resources to help traders assess if they need to repair the tax returns they have filed. The best way to fix a lousy tax return is to amend it before the IRS issues a letter. We also offer tools to help do this affordably.

What if I didn’t subscribe to CryptoTaxAudit, can you still help me with my IRS crypto letter?

Absolutely. We want to help all traders. Just like a subscriber, you pay for the initial consultation call. We recommend a resolution plan and provide a quotation to do the work. For subscribers, that additional work is no charge on crypto examinations and audits.

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