What can the tax office request - reference to cryptocurrencies

The information request - an overview by the experts at Kryptoanwalt.de

Information request from the tax office

Requests for information are inquiries from the tax office aimed at obtaining information to clarify or verify the tax situation of a taxpayer. In the world of cryptocurrencies, such requests can be particularly extensive and complex, as the transactions are often anonymous and decentralized. This article explains what information the tax office may request in connection with crypto transactions and how taxpayers should respond.

Possible requirements of the tax office

Transaction history

The tax office may request detailed records of all purchases, sales and transfers of cryptocurrencies. This includes the date, amount, price, type of cryptocurrency and the platform on which the transactions were carried out. This information is crucial to correctly determine the amount of profits or losses made

Documentation of the wallet addresses

Taxpayers may need to provide evidence of the wallet addresses they use. This may include proof of origin of funds (e.g. purchase receipts, trading history) to confirm the legitimacy of transactions

Crypto exchanges and platforms

If you buy or sell cryptocurrencies via exchanges or trading platforms, the tax office may request information about your accounts and the corresponding trading activities. This may mean that you have to provide copies of account statements or reports from the platform.

Revenue from crypto services

If you have generated income through crypto-related services, such as mining or staking, the tax office must also request information here. This may include documentation of the income generated, the associated expenses and the exact calculation of profits.

Proof of the use of cryptocurrencies

The tax office may also request information on how and for what you have used your cryptocurrencies. This includes, for example, expenses or payments in cryptocurrencies and how these comply with tax regulations.

Response to requests for information

Fast and complete processing

When receiving a request for information, it is important to provide all requested information quickly and completely. Delays or incomplete information can lead to additional questions or possibly to disadvantages.

Retain documentation

Keep a careful record of all relevant transaction documents. This not only makes it easier to respond to requests for information, but can also be useful when preparing your tax return.

Seek legal advice

If the tax office's requirements seem unclear or burdensome, it makes sense to seek legal advice from a lawyer who specializes in crypto law. We can help you understand the legal framework and ensure that all information relevant to the disclosure is provided correctly and in accordance with the law.

Conclusion

In connection with cryptocurrencies, requests for information from the tax office can make far-reaching demands on the documentation of transactions and income. Taxpayers should be prepared to provide comprehensive evidence of their crypto activities. Careful documentation and seeking legal advice where necessary are crucial to successfully complying with IRS requirements and avoiding potential tax issues. Know the IRS requirements and regulate your crypto activities accordingly to be well prepared.

This information serves as a general guideline and cannot replace individual tax advice from our experts. The tax treatment may vary depending on your specific situation and the current tax regulations. It is strongly recommended that you contact our lawyers to clarify your personal tax situation and comply with the legal requirements.