#731: Fixing Broken Bitcoin Tax Policy with Andrew Gordon

A must-listen on the coming wave of IRS crypto enforcement: 1099‑DA reporting, cost-basis traps, perjury risks, and practical steps to limit exposure and push for fair policy.

Key Takeaways

US exchanges will report proceeds on Form 1099‑DA (not cost basis), triggering more IRS audits and forcing taxpayers to reconcile cost basis or face overstated gains.
IRS crypto audit forms demand exhaustive, yes/no disclosures and carry perjury risk; retain counsel immediately to protect privilege and avoid self-incrimination.
Cost-basis recordkeeping is fragile—software often fails and transfers obscure basis; support for a de minimis exemption (proposed $5k) aims to ease burdens.
Advocates urge an OVDP‑style voluntary disclosure program so investors can come forward, pay taxes with reduced penalties, and avoid prosecution fears.
Practical steps: file a six‑month extension by April 15, pay estimated tax if owed, obtain your 1099‑DA, and use a tax pro/software to reconcile prior years.
Privacy and policy: self‑custody wallets raise surveillance concerns; push policymakers for informed IRS staff, clear rules, and non‑weaponized, fair audit practices.

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