Crypto Reporting Study Redraws Compliance Map
The IRS’s new academic study provides a rare look at who is reporting cryptocurrency activity for tax purposes: Crypto sellers skew younger, report lower taxable income, are less likely to itemize deductions, and display trading behavior broadly associated with retail investors versus sophisticated crypto-whales.
The study offers insight into why retail traders may dominate reported crypto activity: the virtual currency checkbox on tax returns. After the IRS added the checkbox, reporting increased most noticeably among self-prepared filers. Perhaps those receiving professional tax advice, who aren’t being exposed to the checkbox, aren’t receiving adequate guidance from their preparer. Or maybe some taxpayers see less risk in…
