Avoid Crypto Taxes: How to Hide Crypto Profits From the IRS

On: January 10, 2020

If you just got to this article by Googling “how to hide crypto profits from the IRS” a disconcerting search query we’ve noticed some people are Googling (also “avoid crypto taxes”), please read the rest of this brief article before continuing your research. After reading you may want to reconsider your approach to saving money on your cryptocurrency profits. Trying to hide anything from the IRS is historically one of the surest ways to land yourself in harrowing legal peril. More broadly speaking, lying to the government at all is not advisable. Hiding taxes from the IRS, or making false statements to the government while under oath or in a sworn affidavit can incur, stiff IRS penalties, enormous fines, and possibly even jail time. Here’s an example of why you should never try to hide your income from the IRS: Everyone has heard of the infamous Chicago crime boss Al Capone. That Prohibition era gangster committed and ordered others to commit a number of violent and deadly crimes. He ended up serving 11 years in federal prison, but not for his most notorious crimes. After all the havoc he wrought, in the end it was income tax evasion that finally brought down Capone. The moral of the story is: Don’t hide crypto profits from the IRS. You should also be wary of thinking that cryptocurrency makes it easy for you to keep profits or income anonymous and get away with defrauding the IRS. In fact the blockchain makes digital forensics easier than ever for an IRS revenue officer, and other tax and police authorities, to investigate tax fraud and prove any unreported tax obligations. Blockchains like bitcoin’s are completely public and every full bitcoin node (there are roughly 10,000 of them worldwide) maintains and constantly updates the entire history of every transaction for every wallet. And the nodes publish all of this information. It’s all out in the open. Bitcoin is actually in many ways the most transparent financial system ever devised. The U.S. federal government has already used the public nature of blockchain record-keeping to convict criminals. One notorious example is the Silk Road case, in which the DOJ remarkably used the blockchain to prove wrongdoing and convict one of the government’s own agents who had gone rogue and stole bitcoin while working the case. So don’t think you can avoid crypto taxes or hide crypto profits from the IRS, especially if you have to Google how. The IRS is far more sophisticated, far better funded, and has an army of data analysts keeping a watchful eye on digital assets and who owns them.This summer the IRS sent 10,000 notices to crypto owners warning them not to cheat on their taxes. Instead of trying to hide crypto profits, consult Leading Tax Group to help you legally save the most money you can on your crypto taxes through completely legal tax strategies, while staying in the good graces of the law.