Cryptocurrency Accounting + Audits

How Does The IRS Treat Cryptocurrency?

If you’re facing an IRS audit tied to cryptocurrency activity, or perhaps you’ve fallen behind on reporting, you’re not alone. Kugelman Law helps investors, traders, and business owners across San Francisco and the Bay Area defend themselves, fix missing records, and handle the IRS with precision.

Facing a Crypto Tax Audit? Here’s What to Expect

The IRS is ramping up enforcement around digital assets. Whether you received a letter, an audit notice, or a full summons, your next move matters.

Our San Francisco-based cryptocurrency attorneys know how to respond, and we do it fast. We’ve helped clients address IRS inquiries tied to multiple tax years, foreign crypto exchanges, and incomplete wallet records.

Common audit triggers include:

• Phantom Like-Kind Exchange: The taxpayer believes they took a like-kind exchange but never reported those exchanges with their tax return on IRS Form 8824.
• Failed to Report Foreign Exchange Accounts: The taxpayer did not report accounts with exchanges located outside of the U.S. (e.g., Binance) on FBARs or Forms 8938.
• Airdrop, Fork Income: The taxpayer never accounted for or inconsistently reported fork or airdrop income.

We Rebuild What the IRS Can’t See

Crypto tax audits are built around gaps: incomplete data, unclear transactions, or noncompliance with FBAR and FATCA rules. Our team closes those gaps.

At Kugelman Law, we use cutting-edge forensic software and proprietary tools to recreate missing trading data, generate accurate basis calculations, and produce the records the IRS expects to see. We’ve helped clients account for hundreds of thousands of dollars in transactions, even years after the fact.

What Sets Our Crypto Audit Team Apart

When it comes to digital assets, most firms aren’t built for this. We are.
Custom Crypto Audit Representation
We don’t just understand tax law: we understand blockchain, wallets, DeFi, NFTs, and the nuance behind crypto accounting.

IRS Experience from the Inside
Our attorneys understand how audits are structured and how to prepare your case for IRS review or escalation.

Legal & Accounting Power in One Place
Our attorneys collaborate closely with crypto accounting professionals who are licensed CPAs, giving you a unified strategy for crypto audit defense.

San Francisco-Based, National Reach
We represent clients locally and across the U.S. in audits, IRS Appeals, and U.S. Tax Court litigation.

Related article: What Causes a Crypto Audit and How to Respond to a Crypto Audit

Crypto Compliance: Better Late Than Audited

Fallen behind on reporting past crypto gains? Haven’t filed FBARs for foreign accounts? You’re not alone, but the longer you wait, the harder it is to fix.

We offer full cryptocurrency tax compliance services, including:

• Amending returns
• Late FBAR / Form 8938 filings
• Voluntary disclosures
• Catching up on prior-year crypto trades
• CPA-prepared audit-ready statements

Many clients come to us after their accountant or tax prep software gave them bad crypto advice. We help clean it up and keep you protected moving forward.

Don’t Face a Crypto Audit Alone. Let Us Handle the IRS.

You can’t afford mistakes when the IRS is looking at your blockchain activity. Kugelman Law will deal with the agency with a clear plan, strong documentation, and confident legal strategy at every stage. So you can rest assured that your financial future is protected

Use the form below to speak with a San Francisco cryptocurrency attorney.
We’ll review your situation and help you respond before things escalate.

Let our team of experienced cryptocurrency attorneys and tax professionals bring you into compliance, defend you in your audit, or represent you in a criminal investigation. Contact us today!