#731: Fixing Broken Bitcoin Tax Policy with Andrew Gordon

Andrew Gordon, a lawyer and CPA with over a decade of experience in Bitcoin and crypto taxes, discusses the IRS's intensifying scrutiny of crypto holders amid rising audits and new reporting rules. He highlights practical risks, compliance pitfalls, and needed reforms to make tax handling less burdensome for everyday users.

Risks of the New IRS Audit Form

The IRS has introduced a detailed two-page audit form targeting crypto activity, requiring yes/no responses on dozens of exchanges, wallets, DeFi platforms, and self-custody tools, covering all years from initial use through the audit period—not just the audited year. Signed under penalties of perjury, it exposes users to criminal charges for errors, even honest ones like misremembering rebranded exchanges. This differs from standard audits, where banks are simply listed without perjury declarations or exhaustive lists. Gordon notes the form's scope could expand audits to prior years and create weaponizable statements, especially if anti-crypto policies return. Privacy concerns arise as it probes self-custody and inactive wallets, intruding on financial privacy despite blockchain transparency.