Tax Court Docket 26425-21 can serve as a wake-up call to your clients who have been dabbling in cryptocurrency. TaxNotes has published the petition if you want to know the name and profession of the taxpayer involved, but I am just going to call him Joe. Joe is doing pretty well in his profession. Just for the heck of it he decided to dabble in crypto. He never had more than ten to fifteen thousand dollars invested in crypto. What could possibly go wrong?
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Intentionally Filing a Defective Tax Return
Creativity on a tax return is a natural tendency. Many strategies and behaviors we know are wrong, e.g. not reporting all income. However, is it ever okay to disregard some deductions and pay more tax? At first glance, it would seem that the IRS should like the idea of more reported income and a higher tax liability attached to the additional income. The IRS does not.