BlockFi and Robinhood CP2000 Notices

BlockFi and Robinhood users, the IRS is issuing CP2000 notices for 2021 trades from these platforms. We've had a few people reach out to us about these notices, so lets break it down:

A CP 2000 notice indicates that the income the IRS received from external sources, such as crypto exchages, differ from what you've declared on your tax return.

Crypto investors REALLY need to to be keeping an eye out. These notices might not be entirely accurate. They stem from 1099 forms that crypto exchanges submit to the IRS, However, these 1099 forms only show total sales volume for crypto. They fail to capture FULL details of your crypto transactions.

The worst thing you can do is ignore the notice. The IRS can put liens on your property or even levy your bank account.

This also stems from a larger issue we could be seeing in 2024. More crypto tax audits. The IRS can look back 3 years into tax records. With 2021 being a bull run, we could see more crypto tax audits in 2024. We saw something similiar in 2020 with 2017 transactions.

Recently did a video about this prediction: https://youtu.be/LrljR0l0jTY

Most importantly, make sure that you are reporting your crypto! Previously, there was a significant increase in CP2000 notices from Coinbase users, and similar situations may occur with other exchanges as the year progresses.

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