U.S. IRS's New Crypto Audit Form Requires Full Disclosure of All Exchange and Wallet History, Involving Over 100 Platforms Including Coinbase

Odaily News: The U.S. Internal Revenue Service (IRS) has introduced a new investigative form for crypto tax audits, requiring taxpayers to disclose the complete history of exchanges and wallets they have used. The form lists over 100 platforms, including exchanges such as Coinbase, Binance, Kraken, FTX, Mt. Gox, and self-custody wallets like MetaMask, Ledger, and Trezor. Reportedly, taxpayers who receive the form must mark "Yes" or "No" for each platform, sign the document to confirm, and the act of signing is subject to penalties for perjury. The document is believed to be aimed at mapping taxpayers' complete crypto asset activity trails across multiple exchanges and wallets, potentially spanning several years.

Tax professionals warn that failing to report historical platforms could trigger further scrutiny, while excessive disclosure might open new lines of investigation. They advise consulting a crypto tax attorney before signing. Audits typically focus on three categories of individuals: those who checked "Yes" on the digital asset question of Form 1040 but reported minimal activity; those with discrepancies between 1099-DA reported gains and their tax returns; and high-frequency traders during the bull market from 2017 to 2021. (Bitcoin News)