If you are years behind on crypto taxes, you are not alone - and the path to compliance is clearer than you think. Here is how how to get compliant crypto taxes works in practice.
The Fresh Start
Getting compliant means filing all required returns, reporting all income accurately, and addressing any resulting balance. It does not mean paying everything at once. The IRS wants you compliant - and they have programs designed to help you get there without destroying your finances.
How Many Years to File
The IRS generally requires the last six years of unfiled returns for compliance purposes. In some cases, fewer years may be sufficient. Filing more than six years back is rarely required unless you have a specific reason. A tax attorney can advise on the minimum filing requirement for your situation.
Reconstructing Your History
If you traded crypto for years without tracking, your transaction history needs to be reconstructed. Exchange records, blockchain data, bank statements, and any available documentation are used to build an accurate picture. This reconstruction is the most time-consuming step, but it is essential for accurate filing.
Resolution After Filing
Once returns are filed, you know the total liability. If you owe more than you can pay, resolution options include Offers in Compromise, installment agreements, and CNC status. The IRS will not negotiate until you are in filing compliance - so getting the returns filed is always step one.
Frequently Asked Questions
How do I get current on crypto taxes?
File all delinquent returns with accurate crypto reporting. Calculate gains, losses, and income for each year. If you owe, pursue resolution through OIC, installment agreement, or CNC status.
How many years of crypto taxes do I need to file?
The IRS generally requires the last six years of unfiled returns for compliance purposes. In some cases, fewer years may be sufficient. A tax attorney can advise on the minimum requirement for your situation.
Is there a fresh start program for crypto taxes?
The IRS Fresh Start Initiative expanded access to installment agreements and raised the threshold for automatic tax lien filings. While not crypto-specific, these provisions benefit crypto taxpayers getting compliant.
Talk to a Crypto Tax Attorney
If you are dealing with how to get compliant crypto taxes, you do not have to figure this out alone. Contact the Law Offices of Darrin T. Mish, P.A. at (813) 229-7100 for a free consultation. 32 years of IRS resolution experience. Over $100 million in tax debt resolved.