Crypto IRS Notice & Audit Response
Expert crypto-focused IRS representation from a CPA who knows exactly how the agency targets digital asset holders, and how to resolve every notice type. We review your return and rebuild the history of your digital assets.
Why crypto holders get flagged.
Notices for Unreported Crypto
The IRS receives 1099 data from exchanges and cross-references your return. If crypto transactions are missing, you receive a CP2000 proposing additional tax, penalties, and interest, often inflated because the IRS assumes zero cost basis on your sales.
Bank Inflows/Outflows Appear Inconsistent With Reported Income
The IRS can identify certain large or unusual bank transactions through information reporting, audits, exchange records, and data-matching programs. Significant fiat transfers connected to crypto activity that do not align with reported income or capital gains could result in IRS scrutiny or follow-up inquiries.
The Form 1040 Digital Asset Question
Since 2024, every taxpayer must answer the digital asset question on Form 1040. Answering "yes" without proper reporting, or answering "no" when exchange records say otherwise, creates an immediate audit trigger.
IRS enforcement is ramping up.
Crypto-related IRS notices by year
*2026 projected. Sources: IRS enforcement data, Congressional testimony, industry estimates.
Increase since 2020
Crypto-related IRS notices have grown from roughly 10,000 in 2020 to a projected 425,000 in 2026 as exchange 1099 reporting matures and matching programs expand.
Form 1040 question mandatory
Every filer must now answer the digital asset question. A wrong or missing answer is its own compliance issue, independent of the underlying transactions.
Broker reporting goes live
Exchanges are now required to report gross proceeds directly to the IRS, dramatically increasing automated CP2000 notices for unreported crypto activity.
Four steps to resolution.
Notice Review
We analyze the notice type, proposed amounts, response deadlines, and the specific IRS unit that issued it, so we know exactly what we are dealing with before drafting a single word.
Record Reconstruction
We pull transaction history from every exchange, wallet, and DeFi protocol involved. Missing records get reconstructed using on-chain data and forensic accounting methods.
Response Preparation
We draft a formal response with supporting documentation, cost-basis schedules, and legal citations, formatted to the standard IRS examiners expect from professional representatives.
Resolution & Protection
We negotiate directly with the IRS on your behalf, secure the best possible resolution, and implement future compliance safeguards so you never receive another surprise notice.
Expert handling through resolution.
Sound like your situation?
The First-Time Filer
You received a CP2000 notice for unreported crypto transactions. You never meant to skip reporting, the rules were unclear and your exchange did not send a 1099 until now. You need someone who can respond accurately and minimize what you owe.
The Delinquent Taxpayer
You have multiple unfiled tax years with significant crypto activity, trading, staking, NFTs, DeFi. The IRS has started sending notices, and you know the problem is only getting worse. You need a structured path back to compliance.
The Audit Target
You have been selected for examination on your crypto positions. The IRS wants documentation for every trade, transfer, and DeFi interaction. You need a representative who speaks the agency's language and can defend your positions under scrutiny.