🔴 Cryptocurrency holders are facing increased scrutiny from the IRS in 2025

🔹️ Cryptocurrency holders are facing increased scrutiny from the IRS in 2025, with a rise in audits. Evolving tax regulations mean that even minor mistakes can lead to significant penalties or costly audits. As the IRS ramps up its focus on cryptocurrency transactions, investors must be vigilant in their reporting practices to avoid potential traps.

🔹️ A common mistake is neglecting wallet-based accounting. The IRS requires detailed reporting on transactions and balances for each wallet, eliminating the practice of consolidating all trades into a single spreadsheet. Whether hot wallets or cold wallets or a mix of both, records for each wallet must be tracked individually. Tools like CoinTracking, CoinLedger, or TaxBit can help synchronize real-time data from various exchanges, ensuring compliance and preventing surprises during an IRS audit.