Defending Against an IRS Audit

Crypto Audit Defense Service

Receiving an official IRS notification of an audit can lead many to panic and stress about the unknown that lies ahead. However, an audit defense can be successfully handled with a level-headed and cerebral approach.

An audit is a request by the IRS to verify the accuracy of your tax return and other information reported by you and/or third parties to the IRS.

For crypto users, an audit is typically triggered by one of three activities:

  1. A third-party exchange, such as Coinbase, issuing a 1099-K;
  2. The taxpayer reported incomplete or insufficient crypto records, such as having completed thousands of trades but listing them as a single line item on the return; or
  3. The taxpayer files an amended return requesting a refund.

The most common audit for crypto users is Form CP2000, also known as a correspondence exam. The IRS sends a CP2000 notice indicating that its records are unable to match the information reported by a third party to your tax return. The notice will show the amount the IRS says you owe, including interest and penalties.

If you wish to contest the amount listed on the CP2000 because you disagree with the IRS proposed solution, then you should contact a crypto tax attorney to begin your audit defense.

With the help of your tax attorney, it is important to ascertain what is the correct amount of tax, if any, that is due and was there an error in what was originally reported.

It is crucial to work with an attorney with expertise in cryptocurrency tax resolution not only to handle supplementing any missing reporting information but also to understand how to navigate the administrative labyrinth of how the IRS handles crypto matters.

A crypto tax attorney understands the administrative and legal remedies available and can advise on the relevant and realistic resolution options in your situation.

An audit is a serious and time-sensitive matter, so it is imperative to address it immediately to ensure you are protected.


Audit Defense Pricing

* Prices and features are estimates based on typical situations and may vary. Your tax attorney will discuss your own individual situation to give a better estimate. A tax attorney will usually charge an hourly rate and will bill you directly.

The audit defense service is currently only available to U.S taxpayers. For other countries, please take a look at our Tax Professional and Accountant Directory for your country.

Audit by Mail

(e.g. CP2000 form)

$2,000*

(accounting must have been completed)

Client receives IRS letter (such as CP2000) proposing additional tax related to 1099K filed by a cryptocurrency exchange.

Client did file tax return and has complete crypto accounting records.

Client needs law office to serve as representative before IRS to resolve case.

  • Review of IRS notice and client documentation to determine scope of audit
  • Records assessment
  • Advise on reconstruction of missing documents
  • Represent client before the IRS auditors/agents for all meetings and communications
  • Audit report analysis
  • Advise on most efficient resolution
  • 20% reduced hourly rate, if needed

Audit in Person

(e.g. office or field exam)

$4,000*

(varies by case)

Client has traded cryptocurrency for multiple years and reported some activity on income tax return.

IRS opens audit on one or more tax years.

IRS indicates capital gain income related to cryptocurrency is primary issue.

Client has some records but needs help with accounting reconciliation.

Client needs law office to serve as representative before IRS and advise on correct taxable income.

  • Review of IRS notice and client documentation to determine scope of audit
  • Records assessment
  • Advise on reconstruction of missing documents
  • Represent client before the IRS auditors/agents for all meetings and communications
  • Audit report analysis
  • Advise on most efficient resolution
  • Tax appeal representation with IRS Office of Appeals
  • U.S. Tax Court litigation representation
  • 20% reduced hourly rate, if needed

IRS Criminal Investigation

 

contact us

(varies by case)

IRS Criminal Investigation (CI) agent seeks to interview or sends subpoena to client regarding potential federal crimes, including tax and money laundering crimes.

Law office to serve as representative and work in coordination with former federal law enforcement agents in client's defense.