Crypto CPAs & Tax Attorneys
Dedicated Cryptocurrency Tax Lawyers, CPAs & Consultants
Do you need tax and accounting advice on cryptocurrencies? If so, then you need the services of a dedicated team of attorneys, consultants, and CPAs.
Allegations of crypto fraud—whether from an ICO, ordinary business operations, or tax misrepresentation—can wreak havoc on your reputation and career.
Federal agencies such as the SEC and IRS have taken active steps in investigating individuals and companies using blockchain technology and cryptocurrencies in a way that harms investors, capital markets, and the integrity of the U.S. tax system.
If these agencies suspect that you are misrepresenting information to others or have failed to report or falsely report all your crypto transactions, you may be subject to significant civil penalties, and, in extreme cases, criminal penalties.
Finding a law firm and CPA that can help with these issues is challenging. Fortunately, at Oberheiden, P.C., we have the team that can assist you.
Our team of attorneys, consultants, and CPAs can advise you on emerging tax issues on cryptocurrencies, how legal and regulatory changes affect your business, and how to get compliant. We can also provide a strategic defense plan for you.
Do not wait for any uncertainty to turn into a federal investigation. We can give you the advice, assurance, and tax assistance you need today.
Be prepared. Speak to the right team today. Put Oberheiden, P.C. on your side today to resolve your crypto issues and protect your future.
Using a CPA for Your Crypto Transactions
The IRS believes that cryptocurrency income is significantly underreported by U.S. taxpayers. Despite issuing its first guidance on virtual currencies in 2014, much is unknown about cryptocurrencies.
Taxpayers often struggle with reporting their crypto transactions, which has caused an increase in IRS investigations for crypto tax evasion and filing false returns. This places many individuals and businesses using cryptos at risk of IRS scrutiny, fines and penalties, and audits.
Both regular and sophisticated investors could benefit from the services of a CPA for cryptocurrency transactions.
Even if you are using software to track all your crypto transactions—including FMV, gains/losses, and so on—you could benefit from retaining an attorney/CPA for many reasons.
- A CPA can give you an overview of the IRS’s position on virtual currencies and how your situation triggers certain tax reporting obligations.
- A CPA can help you determine whether your use of cryptocurrencies better fits as business income, interest income, investment income, or even rental income.
- An attorney/CPA can advise you on the regulatory framework for cryptocurrencies, most notably SEC ad IRS views on cryptos.
- A CPA can help you receive the maximum deductions for your crypto mining business as well as help you set off any crypto capital losses against capital gains and some ordinary income.
- An attorney/CPA can offer detailed and specific advice for your business’ compliance with laws and regulations regulating or seeking to regulate cryptos.
- A CPA can give you an overview of tax reporting obligations for crypto transactions (e.g., capital versus ordinary tax treatment; tax obligations for selling as well as converting cryptos; when to recognize income from airdrops, staking, ICOs, mining, and so on).
- An attorney/CPA can advise your business on any applicable requirements under the Bank Secrecy Act such as AML/KYC policies and overall compliance obligations (e.g., creating a compliance department or a comprehensive compliance program).
- A CPA can help you decide whether your crypto transactions qualify for ordinary income tax treatment or whether they can be taxed at preferential capital gains tax rates.
What to Look for in Hiring a Crypto CPA
When hiring a CPA to help you with your cryptocurrency transactions, there are several key features to keep in mind.
- Understand from the beginning that cryptocurrencies are a novel area and that every CPA may not possess the level of understanding that you need. Do not forget that many CPAs are unfamiliar with cryptocurrencies or have a narrow understanding of how to report them. Ask very specific questions about whether your CPA can help you with the exact details of your case. For instance, if your CPA says they can help you report all crypto transactions and get compliant, dig deeper. If you are a crypto mining business, make sure your CPA knows the differences in tax treatment between newly mined coins versus later dispositions of those coins. If you want to avoid SEC registration for your upcoming ICO, make sure your CPA knows the difference between structuring an offering as a utility token versus a security token. If you are generating cryptocurrency income, make sure your CPA knows whether this is better reported as business crypto income or hobby income. The list can go on and on.
- Ask whether the CPA also owns cryptocurrencies themselves. You do not want a CPA who professes to know everything about crypto transactions but does not personally own any cryptos. Owning cryptocurrencies shows that the CPA has an intricate and inside knowledge of how crypto transactions affect income and their overall tax obligations. It also shows that your CPA embraces the use of cryptos.
- Assess whether your CPA has an open mind on cryptocurrencies. Cryptocurrencies are a novel and emerging area, especially when it comes to federal compliance. CPAs—as well as tax attorneys—disagree on how to report certain crypto transactions. For instance, how do you report staking income? Staking income is income received as a result of holding cryptos in your wallet to support the blockchain consensus network. Many CPAs consider this income to be analogous to interest earned on a savings account and should therefore be taxed as “interest income.” However, interest income is earned on “money,” and cryptocurrencies are not money. The IRS views cryptos—or “virtual currencies”—as property. Thus, because interest earned on property is “rental income,” other CPAs believe that staking income should be reported as rental income. A lot of these issues are unsettled. Make sure your CPA can effectively communicate any uncertainty to you as well as their views and rationale for making such decisions.
- Be wary of CPAs that claim to know all the laws and regulations affecting cryptocurrencies. If your CPA says they know every rule to help you with cryptocurrencies, be on alert. At present, there are no uniform rules or regulations addressing cryptos. There is no “crypto tax law” to reference. Everything is based on federal agency guidance and already-existing provisions (e.g., securities fraud, unregistered offerings, fraudulent ICOs, wire fraud, tax fraud/evasion). Without such consistent and concrete crypto laws, it is impossible to be an “expert in cryptocurrencies.” Look out for CPAs that claim to be “experts” on everything involving cryptos. A good CPA should be able to assess the facts of your situation, determine which statutes and provisions may be implicated, and respond from there to help you achieve compliance and proper reporting.
- Think holistically about the services that you need. It is possible that your crypto activities implicate securities regulations or banking requirements or trigger certain compliance obligations. Cryptocurrency issues are not merely transactions that have to be reported to the IRS. Other relevant agencies deeply involved in your use of cryptocurrencies include the SEC and FinCEN. As a result, identifying a CPA who is also a securities attorney would be extremely beneficial.
- Ask whether there are specialized reporting obligations. Crypto transactions often involve the individual’s use of crypto exchanges—many of which are foreign exchanges. You may have more disclosure obligations for your foreign held crypto. For instance, FinCEN requires the filing of FBAR forms that disclose an individual’s foreign holdings of over $10,000. While traditionally applicable to foreign bank accounts, many also believe that foreign crypto exchanges also require FBAR filings when the $10,000 threshold is met. If your CPA has filed FBARs before whether for other clients or themselves, then they have a better grasp of the international implications of cryptos, how to report them, and how to achieve compliance with applicable rules and regulations.
Need Crypto Advice from a CPA?
Cryptocurrencies are now mainstream and represent one of the most innovative uses of blockchain technology. Finding a CPA and attorney who has a good understanding of crypto reporting obligations—including compliance and tax requirements—is difficult.
It is critical to choose a CPA/attorney that is up-to-date on crypto developments, trends, and federal agency views on new technologies.
At Oberheiden, P.C., we have a dedicated team of attorneys, consultants, and CPAs who can advise you on reporting requirements for crypto transactions.
Our team helps clients meet their short and long-term objectives involving blockchain technology and cryptocurrencies. We can alleviate the burdens and uncertainty of tax season and advise you on specific compliance obligations for your business.
Do not wait for your business to attract the federal government’s attention. Make sure you are complaint with tax laws, securities regulations, and banking obligations.
Get the advice and assistance you need on these novel issues. Call or contact us today for a free consultation and ask to speak with our cryptocurrency attorneys/CPAs.