The IRS is getting better at spotting crypto tax mistakes. Here's what it means for investors

The IRS has expanded its capacity to detect cryptocurrency transaction reporting errors through enhanced data matching and compliance tools, according to agency statements and tax compliance firms. Investors who hold cryptocurrencies including bitcoin and ether are required to report gains and losses on their tax returns, with penalties for underreporting. The agency has increased staffing in its criminal investigation division focused on digital asset cases and deployed new software to cross-reference exchange transaction records with filed returns.

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