IRS Tax Warnings on Ethereum's Fifth Anniversary

With America's unique Foreign Account Tax Compliance Act, or FATCA, banks worldwide now routinely report account holders with an American connection to the IRS. The power of the IRS and the U.S. Department of Justice is clearly relevant to crypto, which is arguably the offshore banking of the modern era.

IRS forms for crypto taxes In 2015, not many people were reporting crypto transactions, according to the IRS. Now, there is practically an onslaught of IRS forms.

Employees paid in crypto? The IRS says that wages paid to employees using virtual currency are taxable, must be reported on a Form W-2, and are subject to federal income tax withholding and payroll taxes.

Each one gets reported to the IRS. If you don't report or otherwise address the reported income on your tax return, you can expect that the IRS will follow up.

Almost no one was issuing tax forms, and many crypto investors evidently just weren't reporting - so said the IRS reported statistics.

It was generally recognized that you needed to have access to trading data to report your taxes, but the details were scarce, and some assumed that repercussions might not be bad. Today, everyone knows what a stickler the IRS can be, and everyone knows that the IRS cares about crypto.

Everything triggers taxesIn 2015, we already knew that the IRS says crypto is property.

IRS auditsAudits involving crypto were in their infancy in 2015, but have now ramped up bigtime.

Most criminal tax cases historically come out of regular old civil IRS audits.

The IRS auditor sees something he or she thinks is fishy, and invites the criminal people at the IRS to take a look.