Has the Internal Revenue Service (IRS) chosen you for a cryptocurrency audit? This long, dreary procedure can be scary, especially if you’re a first-timer. But you’re not alone.
The IRS has been conducting crypto tax audits for several years now. In 2019, it issued 10,000+ tax notices to crypto investors it suspected were non-compliant.
If the IRS picks you for an audit, it doesn’t necessarily mean you are underreporting your crypto taxes. Sometimes, the selection is random. Or, you could be in business with a potentially non-compliant taxpayer who is also being audited.
What Happens During an IRS Cryptocurrency Audit
Usually, an IRS audit requires you to produce financial statements up to three or six years back. These give the auditors access to records such as your bank account statements, insurance payments, and crypto trade history.
While IRS auditors may fail to comprehend cryptocurrency investments and how they work, the government body works with a team of digital asset professionals to examine your documents.
So, how much time do the auditors need to complete the process?
Your cryptocurrency audit will likely take a few months to three years. The specific time depends on factors like your transaction history and any discrepancies that may be found in your return.
If the IRS discovers that your costs exceed your reported income, it may conclude that you’re hiding your real income and will hit you with a penalty. Hire an experienced cryptocurrency tax attorney in Atlanta to avoid such an undesirable outcome.
What Is a Cryptocurrency Tax Attorney and How They Help You
A cryptocurrency tax lawyer is a licensed legal expert who comprehends various tax obligations regarding crypto assets.
With their deep knowledge of cryptocurrency-related tax issues, they can do the following:
- Advise you on what to do if you’re undergoing an IRS audit
- Help you grasp your filing requirements as a cryptocurrency investor
- Assist you in solving any tax problems you may encounter when selling or buying digital currencies
- Enlighten you about tax matters that could arise when operating a crypto-related organization
- Educate you on the tax consequences of sinking your cash into crypto assets
- Help you correctly report your cryptocurrency asset income on your taxes to prevent being penalized by the IRS
- Give you safe and practical tips on how to reduce taxes you owe from your virtual currency investments
- Tell you the records to preserve to make your tax reporting more straightforward in the future
- Inform you on various tax compliance issues in the crypto world and how to steer clear of them
Remember, crypto investors audited by the IRS aren’t the only people who need a tax attorney.
You should also hire a competent tax lawyer if you inherited a virtual currency from a relative or received it as a gift. The IRS perceives it as a property, meaning you’re required to pay inheritance tax. Your attorney can help you determine if you’re liable and work your way around paying it.
The Benefits of Working with A Cryptocurrency Tax Attorney Vs. Going Alone
Hiring a cryptocurrency tax attorney in Atlanta is always recommended during an IRS audit. But then, why not go through the process alone and top up your savings?
Well, working with a legal professional allows you to enjoy a ton of worthwhile advantages.
For starters, a crypto lawyer understands the tax laws regarding digital assets and the IRS audit procedure. They can guide you on the records to share during the process to avoid landing yourself into trouble with the government department (whether you have something to hide or not).
On the other hand, facing the IRS alone with little knowledge about your tax obligations can cause you to make blunders that may cost you thousands of dollars in fines.
Another benefit of getting a cryptocurrency tax lawyer to represent you is it saves you time. The IRS conducts most of its audits by email, and your attorney can ensure you send timely responses to speed up the process.
In contrast, working alone might overwhelm you, especially if you have a 9-5 or are fully involved in running your crypto business.
Let Us Help You Out
Receiving an IRS notice can be alarming. The last thing you need is to funnel your profits into hefty fines and penalties when there are so many opportunities to expand your crypto business. Let us step in to ensure things don’t get out of hand.
At Cumberland Tax Attorneys, we have the best cryptocurrency tax attorneys serving Atlanta, GA, and nearby metro areas. Tell you what, we can offer you a complimentary one-hour consultation to hear out your crypto tax issue and present you with various options to resolve your problem as soon as possible.
If you’re ready to learn more, call us at (678) 539-0591 right now!
FAQs About Cryptocurrency Tax Attorneys
When should I hire a cryptocurrency tax attorney in Atlanta?
It’s prudent to seek out the services of a competent cryptocurrency tax lawyer as soon as you invest in a digital asset. This enables you to preemptively prep for an IRS audit and avoid being penalized.
How do I choose the best crypto tax attorney?
Before hiring a cryptocurrency tax attorney, ensure they’re well-versed in the blockchain industry and how virtual cryptocurrency transactions work. They should also have vast knowledge regarding tax obligations that apply to crypto investments.
In addition, the best cryptocurrency lawyer for you has a great reputation. They’re also licensed and affordable.
What will my crypto tax lawyer charge me?
Cryptocurrency tax attorneys in Atlanta have set different price tags for their services. While some charge $200-$500 per hour, others come with hourly rates of $1,500.
Some tax lawyers may also ask you to pay a flat fee. The latter remains the same regardless of how much time they spend helping you settle your case with the IRS or assisting you with other tax issues regarding your cryptocurrency investments.