IRS Crypto Tax Audit WARNING: THIS Will Destroy Crypto Traders in 2026

IRS crypto tax audits are increasing, and the new 1099 tax form (Form 1099-DA could put crypto traders at serious risk in 2026. Many people believe that if they didn’t receive a 1099, their crypto income isn’t taxable. That assumption or tax advice is wrong... and it’s one of the biggest mistakes triggering IRS crypto audits right now.

In this video, a former IRS revenue agent explains:
Why you don’t need a 1099 for crypto income to be taxable
How IRC Section 61 gives the IRS broad authority over crypto taxes
What Form 1099-DA means for U.S. crypto exchanges and traders
Why partial reporting can actually hurt you during an IRS audit
How the IRS uses old crypto data to open audits years later
Why missing records, gaps, or closed exchanges raise red flags
What happens when crypto activity resurfaces during an audit

With 1099-DA reporting starting and cost basis reporting coming next, crypto traders need to understand how the IRS is building cases, and why “no 1099” is no longer a defense.

If you’ve ever traded crypto, used exchanges like Coinbase, Gemini, Kraken, or dealt with missing records from past years, this video could save you from costly mistakes.

⚠️ This video is for educational purposes only and not legal or tax advice.

The IRS is aggressively targeting crypto traders... and many people don’t realize they’re already on the radar. Watch a similar video where Former IRS Agent VJ Danko breaks down, "Why Most Crypto Traders Get Audited." Watch the video here:    • Former IRS Agent: Why Most Crypto Traders ...  

Hey, I’m Josh Webskowski, an Enrolled Agent and U.S. Tax Court Practitioner. I team up with former IRS agents to share insider strategies on how to handle back taxes, audits, offers in compromise, and even Tax Court cases. Over the last 20 years, I’ve helped Minnesotans and people all across the country fix tax problems that once felt impossible.

On this channel, you’ll see videos to help you understand your options and avoid the bad advice floating around online.
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⏱️ VIDEO CHAPTERS ⏱️
00:00 - No 1099? Why the IRS Still Taxes Crypto
00:10 - Section 61: Why All Crypto Income Is Taxable
00:30 - What Is Form 1099-DA?
01:00 - When Exchanges Must Report Crypto Proceeds
01:30 - Why Cost Basis Reporting Will Be Wrong
02:05 - How Old Crypto Activity Triggers New Audits
02:45 - John Doe Summons Explained
03:38 - Why Partial Reporting Can Backfire

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