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New Crypto Tax Question Foreshadows IRS Enforcement Priorities

By Garrett L. Brodeur
Tax Notes Federal
September 5, 2022

Abstract: In this article, Brodeur argues that recent changes to the Form 1040 cryptocurrency question highlight an area in which the IRS sees significant enforcement potential and foreshadow a continued shift in the agency’s priorities.

In late July, the IRS released a draft version of the 2022 Form 1040, “U.S. Individual Income Tax Return,” which includes significant amendments to the cryptocurrency question on the first page. Some may consider the amendments to be mere wordsmithing, but taxpayers with a crypto footprint should read the associated tea leaves and take notice of the new cryptocurrency question for the coming tax season. The changes foreshadow the IRS’s expectations regarding cryptocurrency tax compliance and highlight an area in which the agency will use some of its new enforcement budget. Far from mere wordplay, the new cryptocurrency question carries significance beyond the front page of the 2022 tax return.


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Published with permission from Tax Notes Federal © 2022.