Clinton Donnelly: Bitcoin & Crypto Taxes What Every US Taxpayer Needs to Know (sponsored)


Hi welcome to the first in an inaugural edition of epicenter aftershock. My name is Sydney. These aftershock podcasts are wholly sponsored and that means that everyone you hear on these editions of the show paid to be here. But that's okay because we have some amazing sponsors. If you're looking for the regular weekly edition of epicenter just look for the numbered episodes in your podcast. Feed to their gas is Clinton Donnelly. He is a crypto tax expert. He's helped hundreds of. Us Tax payers both domestic annex. Patriot filed or crypto tax returns. He's written five books on Crypto tax. And he's the founder of Crypto tax on. This guy has seen it all and there's no tax return too complicated if you'RE A. Us taxpayer and you hold crypto. This is a really important episode that you WanNa hear. Here's what you'll learn. What are your tax obligations as cryptocurrency holder? What you need to report and how you can prepare a bulletproof tax return how to put yourself in the shoes of an irs tax auditor. And what to do if you get one of those scary audit letters which I certainly wouldn't want to get. What are the biggest mistakes people make? When filing their crypto tax return and the risks they face and what to do. If you're crypto transaction history is totally cluttered and Messy. And what proactive steps. You can take to help improve the situation. Finally you'll learn about crypto tax audit. It's a yearly subscription service. Which is your Kevlar vest? In case you get audited by the IRS it ensures you get competent representation and advice from experts so that only pay the taxes that you legally owe. And I think you'll be pleasantly surprised to learn. Just how little it costs to get an irs audit insurance policy from crypto tax experts. Thank you to Crypto Tax Audit for sponsoring this episode of epicenter aftershock. And thanks to Clinton for offering this great advice to all of our listeners. Who might be concerned and looking at our stats? I happen to know there are many of you. So with that here is Clinton Donnelly of Crypto tax audit. I'm here with Clinton Donnelly. He is a crypto tax expert. He has prepared crypto tax returns for hundreds of people and helped hundreds of people understand and I sect and clarify the situation which is that everybody has to face anybody who has has to file their tax returns. He's also the author of many books on the subject and like thank him for being our guest today. Pleasure to be here so tell us a bit about your background and how you became interested in. Crypto. My background is. I haven't advanced law. Degree in the international financial regulation including taxation and I'm enrolled agent which is the highest level of certification at the IRS grants authorized to represent taxpayers worldwide. Which is what I do. I have clients and forty eight different countries. I got involved with crypto tax reporting at the beginning of two thousand eighteen because everybody who had made a fortune in two thousand seventeen started to have serious tax questions so I became a legal tax advisor to crypto tax. Prep firm but quickly realized that it was a far more complicated and continue to build my own practice at this point. I've written five books on Crypto tax preparation. I've done I've helped nine hundred tax. Amnesty returns and I have one hundred percent success rate on that and I have literally hundreds of clients. You know my biggest clients doing hundreds two hundred thousand transactions a year but people have all sorts of complex situations. Nothing's too complex for us in the CRYPTO tax base. And I got a whole. It's not just me. I got a whole team behind me. That helps me do this very effectively. What's Tax Amnesty Return? There are times like certain times. When you don't file a form that you need to then you're subject to penalties. There are two types. One is someone who just completely a crypto attacks. People stopped filing tax returns. They thought the taxes were illegal and they stopped filing and then a couple years. Go by. And you don't know how to get back into current you've had a change of heart or maybe you're more concerned you don't know how to get back. We'll taxamnesty allows us to come forward voluntarily disclosed this information to the IRS and ask for forgiveness penalties the other one is the anti money laundering forums. That crypto a traitor owners. Have to file if you don't file these forms on time. It's a ten thousand dollar penalty. It's the it's not a tax penalty so this is what Congress wanted to do to force people to remember to file these forums. So when people come to me and they haven't been filing under two of them that's twenty thousand a year you're looking at maybe three years worth sixty thousand. So we do a tax amnesty. Return which means. We're actually writing a legal affidavit that you sign under penalty of perjury and you basically say. I'm sorry I'm sorry I didn't know and we attach that to the return and we get people taxamnesty so we have a fantastic six. We have a successful method for doing that. We have a perfect track record. That's that's Seems very daunting to someone. I think to ask the. Irs For forgiveness. There's something very symbolic there. I think it's a good question. I mean there's lots of stuff in the code that Congress put there to protect taxpayers. Might be reasonable. Cause that that if you did an auditors auditing you that you have a chance to appeal to his manager or go get to go to the Appeals Board inside the IRS or get a third party inside the irs to intervene when you're doing an audit which is the things that we do all the time for our traders who are who may get audited or non traders getting audited as well. You're obviously very knowledgeable about this. But tells them about your credentials and the qualifications that allow you to advise and represent clients and taxpayers well as enrolled agent? I'm I've met the certifications. The IRS has to represent people. And because I have a law degree I actually interact with the tax code in the tax regulations. Do my own original thought doing research the tax laws and the cases. We ATTACK PROBLEMS. Because what happened with crypto taxes is. There were a lot of new terms. We didn't know how to Pigeonhole Crypto into the tax code or how the tax code applied to Cryptos and a lot of accountants who are skilled in the manipulation of numbers but not skilled in the reading of the Tax Law You know they. They froze And as a result it because I read the Law Myself. Interact with the law and read the commentaries able to frame. We have actually a nine page opinion letter on the topic of like kind exchange. And why you know we. We've gone through the fourteen hundred court cases that scene which ones actually apply to allow like kind exchange. The work we Brittany legal argument is well on this new I don't know if you've heard about it New Question on schedule once atop form that the new form that you report your income on it says did you during the year Send sell receive exchange or have any financial interest in virtual currencies which is their word for crypto currencies. So every taxpayer. Us has to check. Yes or no on that question. And we've written the papers. We think that's actually a bit of a violation of people's rights forcing you to swear under oath certain things that are basically personal matters interesting So let's get into people's obligations. What does the taxpayer need to report? And how has it changed over the years the tax code just gets more and more complicated? My father used to go down to the post office. Pull some forms and with a pencil or he would fill out the forms right. You can't do that anymore. You got more and more complicated. And then people started using turbo tax tax. Act these other software products. And then. If you've got too big for them you had to go to an accountant so it's become more and more complicated at this point. I'm GONNA say the Turbo Tax Tax Act do not provide the type of support. A crypto trader needs to report a fully his crypto a activity. I've defined when we fill a tax form we hate. We hate filling it out right. We just want to wade into last minute. We just want to get it done and mailed you. Don't get off our plate right so we're Kinda just get the form submitted it'd be done with it. Hope the numbers low that you have to pay. But I've said I basically look at a tax return in terms of how I defend somebody when they're actually getting audited? We Are Company. That just does tax preparation but once you get that letter from the IRS. Where they start asking questions. That's when we do a lot of work we kick in and represent people through crypto tax audit. So I've I've defined. What if I knew now if I knew then what I know now how would I have done the tax return differently so we have four characteristics of a good crypto tax return? I call it a bulletproof tax return. You know trying to put a Kevlar jacket on your ten forty so it involves four thinks. I you got to report all your income. Every transaction has to be reported it's either capital gains mining income staking income. You report everything. Secondly you have to report. Every crypto owner has to file to anti money laundering forums once called the F. Bar the other ones form eighty nine thirty eight. All but the smallest crypto owners would have to file these We do that. We also do the tax amnesty. If you haven't done that in past years the third thing is to claim all losses such as if you had a Ponzi scam or financial scam. There's a special way to report that. So you can get a very powerful deduction off. What you invested. Also if you like had lost wallet or talking to one guy. He threw away his computer. He lost his wallet that was on the Computer and he's you know he's lost. You know lots of bitcoin how we claim that loss. Well there's ways to do that so that you could actually whether writing off to take the loss to reduce your otherwise you're gang so that's the third thing in the fourth is to put in a disclosure statement out. This is really interesting one year. I hired a former. Irs Auditor to work for me doing complex tax returns in every time he did one he would throw in these disclosure statements. And I said Maurice why. Why does this disclosure statement? We put this in here and he goes You gotTA understand the mind of an IRS auditor. They're overworked in. They have quotas for how much they bring in. In taxes each month and of course the important thing for hitting that quota is to be able to assess penalties penalties generally percentage the accuracy penalty on unreported foreign transactions forty percent so he said when you put a disclosure statement two things happened one it deprives the auditor of being able to claim the accuracy penalty. Right so he can't make as much towards US quota and he asked to prove that what you said was inadequate. He has to attack it before he can attack the return so it's more work to put them on the defensive. He said when we would get a return disclosures in it we will just closed up at return out move onto the next one to be easier. So that's my goal. I want by using a bulletproof tax return. I WanNa take somebody from me. Low Hanging Fruit for the IRS. To squeezed move their fruit to the top of the tree. So that the IRS won't bother too much of a hassle that's really really helpful and so there's one thing you mentioned there which I think is is really accurate and you know I'm not in the US but it's also true here. In France taxes are getting more and more complicated to do like. We used to be able to do these things very easily very simply and now there's more there's more paperwork. There are more forms. There are more intermediaries required turbo tax of these types of software. And so you know. The average person is overwhelmed by by this. But there's one thing I think that kind of outlines and shows just how this complexity is off you skated. I wonder if you if you heard about this story. Where the the? Us Government Accountability Office disclosed the IRS refusal to clarify guidance on how taxpayers file their taxes. What does this story tell us about? The IRS POLICIES. And how should taxpayers approach? This this is. This is an interesting drama. That's going on at the federal level. The IRS came out with his initial guidance. In two thousand fourteen. It said Cryptos or property. You got to report them like property and then people started having question especially after two thousand seventeen. What do we do about this? What do we do this? Irs wouldn't say anything wouldn't comment. Finally Bunch of Congressman from the Joint Committee on taxation wrote a letter to the IRS commissioner and said You need to address this irs is afraid of Congress because the irs because Congress has the ability to reduce the budget for the IRS. There are very afraid of Congress. Well after this letter the commissioner came out and said last year he said well we're GONNA publish some guidance. That really clear up these questions where people are waiting and waiting and waiting well. October comes in and they. This guidance comes out comes out in the form primarily of Acuna about forty five questions of Faq and a lot of it's helpful someone was New Area there were. There were a couple of issues that were people were not satisfied. With how much does the Government Accounting Office which is kind of like an accountability watchdog inside the government? They came out with a paper that Said said four things. One is these. Faq's that the IRS needs to modify them to say that this is only a comment in that the IRS has to change their minds on this. It's not permanent. Doesn't have the weight of regulations. It's just an opinion he said the. Irs can change as I have to abide by the FAQ. So you need to come out and say that secondly they said you need to speak about the form eighty nine thirty eight which is where you report foreign assets. One of the two money anti money reforms you need to give guides the CRYPTO Traders on how to fill that out if it's required and then the third thing. They said they came after Fincen. Nis because the joint on this as the F. Bar form for reporting the foreign Exchange you need to provide guidance. The crypto owners. I had to do this well before. They published this article on the paper. They always give a chance for the agency to comment and came out last week. Here we are. It's probably a like the fourteenth it came out fourteenth February in two thousand twenty the Gao article came out in the IRS. Position was we are not going to change the Faq to say that it's nonbinding make it clear because it is clearly non-binding they weren't going to make that clear they were not going to make that clear secondly they said we're not going to change anything about not going to comment anything about the F. Bar or the eighty nine thirty eight form. The Fincen Group said that they would come out with some additional guidance later so the IRS basically said. We're not going to comment now. There's two ways I see this one is hey the f. bars pretty in my opinion is very cut and dry. There's a question on schedule. Be which is the form release your interest in deductions interest and dividend income question. Seven a says very clearly. I think it's clear. Did you ever yes or no. Did you ever have financial interest in or signature authority over a financial account in a foreign country? So the question is if I have Accounted hit BTC in China. Is that a financial account. It a foreign country yes or no all right then the second question says if if you answered yes you have to file the F. Bar for Yes or no. Are you going to be filing yes or no? So it's very clear. In fact the Supreme Court has been taken to court. The Supreme Court said this is sufficiently instructive that all taxpayers are obliged to file the F. Bar for so maybe the IRS sitting here saying. Hey it's how we're not going to give guidance on things that are obvious all right. That might be their position. But if it'd be Kinda Nice if they said that the other position would be that. They're uncomfortable saying anything because they have messed up so many times and giving guidance that if they say one thing someone's going to slap him on the back side for not meaning addressing something else so I think at this point in time. The commissioner has basically taken the position. We're not giving any more guidance We know the secretary of the Treasury said recently Steven Mnuchin that they're working on more guidance. Who knows but in my opinion I think the IRS is leaving taxpayers out in the Lurch. And it tells me that they're not completely clear in their own mind what their strategy is which puts everybody at risk and everybody should take a very conservative posture in terms of doing your tax returns right because I mean as a as a cryptocurrency user. You might have an account right you said like a hit be DC or or maybe a binary account or you know any any crypto exchange. You could also maybe have Adam steak with the staking service abroad. Is that financial interest? Is that an account with that staking service. There seems to be that. Well one. Your tax payers are not necessarily. I think informed on where these exchanges are you know does hit. Btu have a presence in the US. Like I don't know I mean I don't know how it'd be account but not to pick on hit. Btc But having to figure out where where these exchanges are headquartered and then all of the other sort of confusion around what constitutes a financial asset or financial interest. I think is is something that a lot. A lot of people might might feel unclear about. You're right on. Let's now switch over and talk about the tax return A little bit more specifically help our listeners. Put themselves in the shoes of an irs tax auditor. What are they looking for? And you know if if you get one of these. Irs Audit Letters. What should you do? This is an important question because we're now starting to see audit letters. Come out I have one here. From one of my clients who's getting audited we. He had done an amended return We only did part of it and part that he did is getting audited and we have and this is the second one so we actually are seeing a pattern. The exact same words are being used. So it's very informative A couple of things the takeaway from this there were people who got letters last year in two thousand nineteen at the irs called educational letter suggesting that they might WanNa tune up their tax return. Well this guy he never got one of those letters. He was reporting about thirty eight thousand dollars of income in two thousand seventeen. I'd call that a small amount and he's getting audited and you know the audit starts all audits start with a request for documentation and it's very daunting a region just a little bit You and I were talking before hand. Write about you. Know if you've been trade long enough you know you got scraps of records all over and different websites and some people sent you emails and other people Senate SMS TEXTS. All you could get was screen shots of a certain shape shift transaction. I mean it's clutter so all of a sudden you get this doc. You get this letter. Irs wants you to provide copies of all e mail screen prints hardcopy prints transaction receipt receipts maintained by the taxpayer or provided by any third party such as exchange broker peer to peer facilitator wire transfers direct deposit records a list of all virtual currency kiosks or ATM's US and their location with copies of the acknowledgement. Receipts you'll like this one. A list of all virtual currency received from hard forks faucets tipping or any other method. Where a sale by exchange was not initiated by the receiver commonly called airdrops including the date. The type the amount of the currency received the data sale including amounts of descriptions of what was received all right. And so this is a plus list. All your blockchain addresses owned or controlled anytime buy you. A list of all transactions related to virtual currencies lent virtual currency lending including collateral for loan loan agreements promissory notes ledgers transaction receives pledged security collateralisation agreements all crypto currency exchanges. So you get the feeling. This is terrifying. We got this right. If if you've never used cryptocurrencies and you were presented with this. You'd Never WanNA touch cryptocurrencies. It's a great deterrent. For people to use CRYPTO and like get into defy and stuff I got. I got a story for last week. I was talking to a guy he was in college and he had invested in. Faucets must've been high school and he'd been getting. He got a couple of Bitcoin by now. So I'm taught he's called. He calls me up. He conferences in his dad. All right so he's like you know we talk about it and he invested all this cryptocurrency into a Ponzi scheme called bit connect pretty much lost it all so I said well you had a big run up in seventeen. That's actually a taxable event. You know so I said you have to pay taxes on it. And he's like oh I should actually just sell everything. I'm not gonNA invest in cripples. I don't WANNA pay taxes. I said no no. No no you gotta understand. Taxes are good. All right the more you pay in taxes indicates you're making a lot more income. I would rather be somebody who I'd rather make one hundred dollars in pay thirty dollars of it in taxes and keep seventy then to only earned twenty dollars pay no taxes. Taxes are kind of like a badge of the fact that I made a lot of money right. So if you if you think about this. The wealthiest people United States that are the wealthiest are living in the states that have the highest state tax rates typically Same thing internationally like you're in France has one of the highest tax rates. But there's a lot of wealthy people in France so if you've conversely if you go to the poorest countries they have the lowest tax rates so or lowest participation in the tax at all so taxes are not bad. You don't want to pay more have to legally but Focus on making income not trying to avoid paying taxes the biggest tax break that all crypto traders get is what's called long term capital gains if you hold a coin for more than a year before you sell it then. Your tax rate goes down to fifteen percent. Otherwise you're up at your up in the twenty five thirty three percent range drink on your your bracket so this is the biggest tax break in. Congress wants Congress has given to you. It's a longstanding tax. Break it's something that we should strive for do long term capital gains. Because you work too hard for your money to just flush it down. We regular tax rates. So let's go back to the ladder and what people should expect once they get the letter very good. That's a great question so there's a lot of it's kind of a mystery if you've never been through it before it's Gary and I was talking to this client here who's getting his cryptos audit. He's been audited two times before so he said. I know the drill. I know what's happening. I said you know the most important thing right. He goes yes. I know that I'm never supposed to talk to the IRS. Agent Myself I go. That's absolutely right it's just like on the TV shows. You never talk to the policemen when they've got you in their interrogation room. You always wait for the attorney. It's during those few minutes before your attorney shows up that they're going to squeeze you for stuff that you're going to regret later so never talk to an agent even if you think you've done everything you know picture perfect. It's not. They're not interested. They already start with the presumption that you're bad. That's why they're auditing you. You know a lot of these. Auditors are not happy people all right so you get a letter. It says you're being audited and it has an information request and please get us these documents in thirty days. All right so all of a sudden. You're panicked right. I gotta get the stuff together. Somebody represent me. It's not going to be my county. Because he didn't know what he was doing. He got me in this problem in the first place. You gotta find someone who knows Crypto. Who knows how to defend people? That's what we created crypto tax audit for so what we do next as we introduce ourselves to the rep to the auditor so he knows immediately that he's not GonNa talk to the taxpayer. He's talking to a third party. It takes the emotion out in a forces him to be. He can't play as many games. Secondly we've packaged. We give him all the documentation requests and then I have a conversation with them and I say look we especially if he has a bulletproof tax return we say look. We've got a disclosure statements here. We've done everything. This guy is above the board. You're wasting your time with this person. We want them to feel like they're wasting their time and if he tries to push it. I'M GONNA drag him out in make unfruitful for him. So that's kind. What an audit is about now okay so auditor after this dialogue might take a couple months the says. I think I'm the art and I think you owe this money now. What happens we have a couple lines of action? We can either appeal to his manager. We can go. We can file a due process. Hearing we can appeal any determinations that came out. There's a lot of different escalation points that are the laws. The regulations provide for us to do that. I address won't really tell you that much about it. But we we worked that process in order to protect rights into escalated because an auditor just wants to assess a big penalty and move on. Because that's how he gets measured right. You might need to speak to somebody more intelligent and more rational to actually get them to dress. Hey look these crypto traders these auditors. Probably know less about crypto than anyone. Who's been watching your show for a month? All right. They know you know they. They don't know it. They just know their little thing. It's confusing to them. So the key is to be as thorough. Be as polite and kind to them as possible and make them go away. That's the best strategy so one thing that you mentioned in that in that audit letter which which I think is particularly interesting because a lot of people that are in Crypto you know like especially like the old timers they got into Bitcoin in twenty eleven back then. People remind pizzas on Bitcoin. Talk for ten thousand bitcoins and sending each other bitcoin tipping. There have been a number of folks over the years. Ed Like People. There are people out there. And you have crypto. That they don't really know where they got it. Or when they got it or how they got it. It might be on a on an old hard-drive. It's like finding old photos scrimmage Gerald hard-driving you find pictures of when we're back in high school or something like that and take that you put it into your into your sort of clean photo album. Well not with Crypto. Because if you do that then all of a sudden you need to start reporting that stuff. How should people kind of deal with this? Clutter well first of all when you're audited. You're audited on a specific year. In this guy's case it's two thousand seventeen so A lot of those types of transactions refer to probably before then the auditor he's been given the two thousand seventeen tax year audit you. He's not interested in sixteen or eighteen unless he thinks he can. You know increases a quota attainment. So he's not going to be looking there those other years secondly and I think this is really a couple words of assurance here one for all your tax all taxpayers. A tax return is not like your high school math test. Where you have a perfect answer. You're trying to get one hundred percent. It's not like that at all. It's about getting close all right because a lot of these things. Get to be debatable. How much was the gain on this? This coin vagueness right. We want to get too close. And that's so I want to because some people are just overly worried about those details. Their worry more than auditors. GonNa worry and I I just want to give that assurance When they audit of cryptos really studied this they cannot really do a bottoms up audit in the same way. You as a tax payer had to calculate your capital gains for all your trades. I mean it's a nightmare but they're not going to double check that because they have no better records they knew they have probably lesser tools than the ones you used on life so the way they audit is rather than coming looking at starting from the bottom up is more what I call a top down on it. They're look to see if you reported enough income that they expected so for example. This was very very real case. A guy called me and he received a ten ninety nine tax form. Ten Ninety Nine K. From Beatrix for a million dollars is that he was he was he was terrified. He said I never had more than twenty eight thousand dollars on. Beatrix how can they issue a one million dollar ten nine k? And I said well. Hey look here's this will give an idea how they audit imagine when you do a capital gains report you list every transaction you say. I am this date. I bought this coin for this amount. I sold it at this amount and it had. This is my game all right so I have what they call it. Cost and the proceeds. I said look so imagine this. So let's he was. He was a little bit of a high frequency traders. Let's imagine he takes ten. He takes twenty thousand dollars. He puts it all on eath the next day he sells it. It's gone up to twenty one thousand. So He's got cost of twenty thousand and he's got a proceeds at twenty one thousand one thousand dollar game so he does this again the next day. Twenty thousand in the Daf that twenty one thousand out so I got two transactions. What does that look like on capital gains report? What are his total proceeds? Well It's twenty one thousand plus twenty. One thousand is forty two thousand dollars. He never had forty two thousand dollars right. Well if we look at the fact the COST COLUMN. That said forty in the total gain was two thousand. Well what how do we correspondence when he was a high frequency trader? So those numbers just got really high. All right I had one client high frequency trader. Four hundred twenty million dollars in proceeds. But that wasn't how much money he made. It's just the way it's counted the IRS. Use that number to see like they're going to expect they got a ten thousand nine from Beatrix for a million dollars they want to see. At least maybe more but at least a million dollar showing up there on your capital gains report. It doesn't mean you had that as income but that's the high level check that they're looking for if you report more than they know about from. Beatrix while the just happy you're being honest but we want to count for anything of a ten ninety nine K. nature that's kind of how the IRS does that so not a panic too much if you get a large cake okay. So they're using these ten. Nine KS is sort of an indicator to see which people potentially they could look into an audit more thoroughly exactly. So where's the thing that you see in your practice where people are getting their returns? Totally alarm wrong was the most common Mistake that people make while find their cryptic return. The two biggest mistakes people make is one. They're not filing the anti money laundering forms. The bar eighty nine thirty eight. These are mass of these are ten thousand dollar penalties moment. The Iris finds it meals. You a letter that you didn't submit enough bar as a ten thousand dollar penalty right there next and then when you actually fill out and give it to them they'll count the number of exchanges you reported multiply at times ten thousand with penalty all right so five exchanges fifty thousand plus the original test sixty thousand dollars and they can do this for multiple years. This is this year mass. This is a massive. Financial exposure is easy to fix a situation. The second biggest mistake people make particularly in two thousand seventeen was they thought they only had to report transactions on their tax return where they went to cash so if they went for. Crypto to cash Fiat then that they would report. They thought that if you went from Crypto to Crypto to Crypto that you didn't have to report those because you hadn't taken any gain out. There's a legal word for this. It's called like kind exchange tax code section ten thirty one but the biggest mistake the then made was yes. You can do like kind exchange up until the end of two thousand seventeen. When the law changed the mistake they made was they didn't. I didn't list all these traits on the tax return in order to get like exchange. You have to list them. So they didn't list them. They're not entitled to a massive exposure for repeal these the two massive mistakes that people make especially the Crypto crypto exchanges. Those are particularly hard to track. Because if you used a service like shape shift before they introduced KC and everything. There's no account. There's no email confirmation that sent to you so there's really not much of a way that people can actually trace these except for like doing a screen shot and keeping it in her files. Screen shouts about all you can do. They're very dangerous Those exchanges from a tax position. Because they leave you with very minimal documentation. It's it's not in a structured format like a spreadsheet screen shots and you gotta stick them somewhere as you described before clutter. I believe as people start to do their tax returns more and more. We'RE NOT GONNA PUT UP WITH EXCHANGES. That do not provide good tools for pulling your transaction logs and in the future you know generate accurate ten ninety nine records. I think this is something that we should put our foot down traders. We won't put up with the stuff that gets us into trouble. So as a crypto holder. Who's concerned about maybe some unreported holdings or Unreported exchange accounts or unreported gains worse than proactive steps that these people can take to protect themselves against a potential audit and potential penalties in the future. The pain that taxpayers feel. I realized I didn't do it right. Seventeen and eighteen. I didn't do my taxes right and I now. This is the common sentiment that now he's out. I want to do my two thousand nineteen taxes right because I think here in two thousand twenty. I'm GonNa make a fortune and be able to pay off back taxes but I don't want the irs to come after my fortune. Because I screwed up in past years well the good news is there's tax amnesty to fix the ANTI MONEY LAUNDERING FORMS. That have been filed. I go back and I do the like kind exchange analysis and there's very few people in the country that do exchange analysis and I'll do it safe people fortunes. Last year guy came to me. He was a doctor. He made a lot of money and a lot of was withheld by his practice but he also invested. He had in two thousand seventeen. He had gotten up to two million dollars. In crypto acids crypto trading. He told his accountant in two thousand eighteen. I need to report this account and goes well. Let's just file an extension? So September comes. October comes count hasn't filed his return. The accountant never filed the return because he was paralyzed on the CRYPTOS. So here then we've talked me. Last year he goes Clinton I got. I got to probably all this game. Plus I never found my tax tonight. The IRS pretty happy with him because they've gotten like they'd withheld like a cup like one hundred thousand dollars already so they like that right so I said look. Here's what we did. We filed his tax returns. We did like kind exchange on two thousand seventeen. As as a result he had no taxes owed for his crippled trading the exchange which was available through the seventeen passed onto eighteen and then you had gains but at that point in time. He didn't have the penalties he's able to get long term capital gains treatment on. It saved them a calculator. Roughly five hundred thousand dollars. I love that. The accountants are also are also scares. Actually I really become much more aware. This from clients calling me up. I mentioned at the beginning and schedule one of income. Now you have to answer this question. Did you have any dealings with virtual currency right? Well all account all tax preparers have to ask that question now because it's in the form they have to answer yes or no all right but they're but then guys are telling me that the account will very view counts in my opinion really understand what to do with crypto currencies. Which is you know. I would opinion about that but what people are people are now telling me is that their accounts have a statement in. There says they're not responsible for any reporting related to their crypto currencies. So how would you like to how your tax return done by guy who's not taken responsibility for doing it right? How much did you pay for that return? So how can you help our listeners? Who are in the US or even you know. I think a lot of our listeners are also experts and live abroad but still have to file taxes in the US. What do you offer them? A lot of experience with experts expect traders my company. We do a lot of tax returns. We do. The bulletproof tax returns to describe but in order to help the most amount of people. We've now offering a service called crypto tax audit at CRYPTO TAX AUDIT DOT COM and for a low annual subscription rate. You get audit protection on any return. The IRS would come after you for an particularly if it's related to Cryptos. Now we could matter what they're coming after we can help you with it. But if you if it's crypto related then our representation services and tax research are done for free if it's a F- it's directly a crypto related problem and. We can do that because we're going to be. We're handling lots of them. We understand how they're coming after it. We know how to answer those audit letters and how to deal consistently with these auditors. But when you do a tax return there's a lot of other work gets done. Besides talking to the irs you have to gather up lots of documentation and synthesize it into something meaningful. That's other work that has to be done. So also in the CRYPTO tax subscribers to crypto tax audit get access to some First of all you get a free copy of our crypto health check book which is a helps you look at your past tax returns to see. How good are they what you have? You done the things you need to do. Magnificent tools about thirty eight pages long. It's chock full of good stuff. Secondly we have a couple video mini courses. One is how to prepare the F. Bar informed eighty nine. Thirty Eight These are the anti money laundering forms. I did this. Because accountants do not know how to complete these software like turbotax attack will not even file the F. Bar form in most accounting software for data professional grade tax. Software will not do the bar form for you. So you know in order to empower my Subscribers given video and they can learn how to do it how to subscribe it themselves they be educated and then we also video how to use turbo tax to file a CRYPTO tax return. Turbotax does not support really a true crypto tax. Return so I show you how to basically go off. Roading with turbo tax had a jam in some extra forms so you can create. You can a Kevlar vest on your tax return and a feel better at night. I want to do things that are affordable for people because not everybody can afford Have a affirmed amend returns for you but if you have some help you could do it yourself. That's the biggest help I do. And if somebody really has a complex problem they could reach me. On the Crypto tax audit web page. You can schedule a consultation and we can talk and fixing returns. So how much does this cost ninety seven dollars for a year so for ninety seven dollars a year? You get e-book you get the videos you get the how to complete your turbo tax Crypto return but you also get you described it earlier as sort of an insurance policy insurance policy for the IRS representation now. There's other things in a in responding to attack return that are not irs representation. You gotta put together the documents and stuff that there's a fee for that. The video mini courses have a very nominal fee for them as well not surprise anyone but we charge that we try to keep the quality up and keep it out there looking at putting more things out there so yeah it's a tremendous value. I think the vast majority of traders. This is what you know. Plus YOU'RE GETTING. You're getting hooked into a team the moment you get an irs letter. You already know who. You're GONNA call your. It'd be calling my staff me. We'll be going right to work to get you the best defense to keep the IRS. I got a quote here for you by us. Senator Henry Belmont. He says in a recent conversation with an official of the IRS. I was amazed when they told me if taxpayers in this country ever discovered that the IRS operates on ninety percent bluff. The entire system would collapse. So that bluffing is a full begins when they start sending you this audit letter. There's it's all about scare is all about fear. So that's why I want to protect people. Defend people show him how to defend. Do a good tax return and then represent people who get selected. Okay I tried to drive this point home here. So what what people get when they sign up for this defense annual subscription is that they get the peace of mind if ever get one of these forms of every day to get audited you'll have their back essentially and you'll be representing them with the IRS. And you'll be calling those bluffs basically and and helping them make the best of the situation and helping them file all these disclosure forms and putting together this bulletproof tax return as you mentioned exactly. That's that sounds great. I mean that seems like a great value. It's fantastic. There's nobody else doing anything like. This accounts are doing a turbo tax tax act or not providing. Don't support crypto traders. They don't offer anything like that. You're on your own but we give you the tools as part of the service because the best time to fix a problem your tax returns before you get the letter. So that's why we put those tools out there. Show you how to do that. Great so please remind people where they can find and hadn't get more information about this. Crypto TAX AUDIT DOT COM You go there to subscribe. If you have an immediate need you can. Also there's a page for non subscribers to contact our offices and have a half hour consultation. Clinton thanks so much for being on helping provide the great resource journalists real pleasure to be here with you Sebastian.

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