4 ms·

Tax lawyer here but not legal advice. The first correspondence you received from the IRS is threatening a lien? That seems strange. I would expect they would h

Tax lawyer here but not legal advice. The first correspondence you received from the IRS is threatening a lien? That seems strange. I would expect they would have issued you an information audit first (basically: hey, can you give us more details on this?). If we're talking big money, I'd say skip the accountant and go right for a tax attorney. Contact the federal bar. Edit: I have heard good things about Moskowitz LLP: https://moskowitzllp.com/practice-areas/cryptocurrency-tax-assistance/ https://moskowitzllp.com/practice-areas/cryptocurrency-tax-a...

alephnan 5y ago
Apparently the audit took place last year, but I never received any letters as I've been moving about every year. I am on the phone right now and they told me the account is in collection, which means they can place a lien, had it not been for the covid-19 related pauses? I vaguely remember logging into the IRS website last year and not seeing indication of this. What I reported in 2017: SHORT TERM NO 1099B sale amount: $99,xxx.00 SHORT TERM NO 1099B cost AMOUNT: $97,xxx.00 NET SHORT-TERM GAIN/LOST $1,9xx.00 IRS audit reassessment amount: $33,xxx.00 This supports the theory that the IRS interpreted: SHORT TERM NO 1099B sale amount: $99,xx.00 SHORT TERM NO 1099B cost AMOUNT: $0 NET SHORT-TERM GAIN/LOST $99,xx.00 I was shuffling money back and forth and the position was never larger than $8,000. Based on what the agent is currently telling me on the phone, their notes indicate Coinbase reported my 1099k as being $99,xxx.00 of income....
- tldrthelaw 5y ago
  1099s are pretty frequently issued with incorrect amounts. Have you retained all your records to prove your cost basis/etc.? General informational link: https://www.irs.gov/appeals/collection-due-process-cdp-faqs https://www.irs.gov/appeals/collection-due-process-cdp-faqs Definitely get in touch with a tax attorney before you go further with the IRS, and watch what you say.
  - alephnan 5y ago
    I was just on the phone with them before see your message. So apparently Coinbase reported my 1099k as having an income of $99,xxx.00 Before this, I had no idea what a 1099k is, actually. I'm a salaried employee who receives w2. Apparently I was supposed to file a schedule C for my cost basis, which I don't believe I did. I filed form 8949 instead. I have a CSV of my trades from Coinbase as the cost-basis. I'm not sure if that is legitimate enough. I'm not sure Coinbase keeps records back to 2017.... The agent told me that the next steps are to receive the documents related to the audit and file an amended tax form with schedule C.
    - tldrthelaw 5y ago
      Schedule C is for business deductions, are you mining/staking as a business? If so, you'll owe self-employment tax. If not, you probably want to file it as hobby income which is Form 1040 Schedule 1. You can't take deductions from it, but I would be surprised if the deductions offset the aforementioned self-employment tax so as to make Schedule C worth it.
      - alephnan 5y ago
        Right. I have a question mark on the schedule C bit. This will be a question I will leave for the tax pros. What I know is that Coinbase reported a 1099k with an income of $99,xxx.00 In addition to the income reassessment, the IRS also pegged on: Total Self Employment Tax: $2,6xx.00 And no, I did not mine or stake.
        deleted 5y ago
        [deleted]

alephnan 5y ago

Apparently the audit took place last year, but I never received any letters as I've been moving about every year. I am on the phone right now and they told me the account is in collection, which means they can place a lien, had it not been for the covid-19 related pauses? I vaguely remember logging into the IRS website last year and not seeing indication of this. What I reported in 2017: SHORT TERM NO 1099B sale amount: $99,xxx.00 SHORT TERM NO 1099B cost AMOUNT: $97,xxx.00 NET SHORT-TERM GAIN/LOST $1,9xx.00 IRS audit reassessment amount: $33,xxx.00 This supports the theory that the IRS interpreted: SHORT TERM NO 1099B sale amount: $99,xx.00 SHORT TERM NO 1099B cost AMOUNT: $0 NET SHORT-TERM GAIN/LOST $99,xx.00 I was shuffling money back and forth and the position was never larger than $8,000. Based on what the agent is currently telling me on the phone, their notes indicate Coinbase reported my 1099k as being $99,xxx.00 of income....

tldrthelaw 5y ago
1099s are pretty frequently issued with incorrect amounts. Have you retained all your records to prove your cost basis/etc.? General informational link: https://www.irs.gov/appeals/collection-due-process-cdp-faqs https://www.irs.gov/appeals/collection-due-process-cdp-faqs Definitely get in touch with a tax attorney before you go further with the IRS, and watch what you say.
- alephnan 5y ago
  I was just on the phone with them before see your message. So apparently Coinbase reported my 1099k as having an income of $99,xxx.00 Before this, I had no idea what a 1099k is, actually. I'm a salaried employee who receives w2. Apparently I was supposed to file a schedule C for my cost basis, which I don't believe I did. I filed form 8949 instead. I have a CSV of my trades from Coinbase as the cost-basis. I'm not sure if that is legitimate enough. I'm not sure Coinbase keeps records back to 2017.... The agent told me that the next steps are to receive the documents related to the audit and file an amended tax form with schedule C.
  - tldrthelaw 5y ago
    Schedule C is for business deductions, are you mining/staking as a business? If so, you'll owe self-employment tax. If not, you probably want to file it as hobby income which is Form 1040 Schedule 1. You can't take deductions from it, but I would be surprised if the deductions offset the aforementioned self-employment tax so as to make Schedule C worth it.
    - alephnan 5y ago
      Right. I have a question mark on the schedule C bit. This will be a question I will leave for the tax pros. What I know is that Coinbase reported a 1099k with an income of $99,xxx.00 In addition to the income reassessment, the IRS also pegged on: Total Self Employment Tax: $2,6xx.00 And no, I did not mine or stake.
      - deleted 5y ago
        [deleted]