What happens if I don’t report crypto on taxes? If you don’t report taxable crypto activity and face an IRS audit, you may incur interest, penalties or even criminal charges. It may be considered tax evasion or fraud, said David Canedo, a Milwaukee-based CPA and tax specialist product manager at Accointing, a crypto tracking and tax reporting tool.
Do I have to report crypto on taxes if I made less than 1000? It’s important to note: you’re responsible for reporting all crypto you receive or fiat currency you made as income on your tax forms, even if you earn just $1.
What triggers a crypto audit? If the IRS has your records from an exchange and you haven’t reported crypto on your tax returns—or if what you reported doesn’t match the IRS’s records—this could trigger a cryptocurrency audit or worse.
How far back can IRS audit crypto? How far back does a cryptocurrency audit go? According to the IRS, audits include all tax returns that are filed in the last three years. If the agency identifies what they call a ‘substantial error’, they may add additional years (though they typically don’t go back further than six years).