Non-custodial or "self-custody" crypto wallets do not report directly to the IRS because they do not require Know Your Customer (KYC) identity verification, allowing users to maintain privacy over their assets. Examples include MetaMask, Ledger, and Wasabi Wallet. However, all US taxpayers are still legally required to report crypto gains/losses to the IRS, as transactions on public blockchains are traceable.
Here are a few cryptocurrency exchanges that don't require Know Your Customer information from customers and do not send 1099 forms. These are mostly P2P and decentralized exchanges that are not subject to the same requirements: RoboSats. Bisq.
5 Best Anonymous Crypto Wallets for 2025
In the US, all cryptocurrency exchanges must report transaction information to the IRS under the Bank Secrecy Act. This includes customer names, addresses, SSNs, and transaction details.
Selling crypto in a year when your income is lower can reduce the taxes you owe. Gifting cryptocurrency is generally not a taxable event for the giver. Crypto IRAs allow you to hold cryptocurrency long-term while deferring or avoiding taxes.
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
Monero transactions are confidential and untraceable.
Because every transaction is private, Monero cannot be traced. This makes it a true, fungible currency.
What happens if you don't report cryptocurrency on your taxes? The IRS is perfectly clear that crypto is taxed, and failure to report crypto on your taxes may result in steep penalties. The punishments the IRS can levy against crypto tax evaders are steep, as both tax evasion and tax fraud are federal offenses.
Warning: The IRS knows about your SushiSwap gains!
SushiSwap transactions are publicly recorded on the blockchain, making them fully traceable by the IRS. The IRS uses advanced tracking methods to monitor crypto activity and enforce tax compliance.
$Trump (stylized in all caps) is a meme coin associated with United States president Donald Trump, hosted on the Solana blockchain platform.
Cryptocurrency transactions are permanently recorded on publicly available distributed ledgers called blockchains. As a result, law enforcement can trace cryptocurrency transactions to follow money in ways not possible with other financial systems.
UPI Lite is an on-device wallet with the following key features: Make payments of up to ₹1,000 INR without the use of a UPI PIN on the Google Pay app. No fees. No KYC required.
You cannot avoid tax on taxable events, but you can reduce your bill legally. Many investors plan dispositions for lower-income years, harvest capital losses to offset gains, and donate appreciated crypto to registered charities for donation tax credits. Using tax-advantaged accounts is another approach.
The IRS generally can't seize assets essential for basic living, like necessary clothing, schoolbooks, furniture, and tools of your trade (up to certain limits), plus items like unemployment, workers' comp, child support, and public assistance payments, along with a portion of your wages. However, major assets like your home, vehicles, bank accounts, and retirement funds can be seized, though the IRS must follow procedures and often seeks the quickest collection method, usually targeting liquid assets first.
Common Crypto Tax Strategies
A shocking study suggests that over 99% of crypto investors didn't pay taxes last year—what are the risks? In this article, we explore the study's findings and the potential consequences of not reporting crypto taxes. A new study revealed that over 99% of crypto investors did not pay crypto taxes last year.
In brief: All crypto exchanges (legally operating) must have KYC verification for customers and report user transactions to the IRS via 1099-DA and 1099-MISC. This data is used to identify anyone failing to report crypto transactions. Exchanges may share other information on request, including wallet addresses.
PrimeXBT is a multi-currency anonymous crypto wallet that offers users control over their private keys; it has AES256 encryption for all transactions. It also works with multiple currencies, and the onboarding process is relatively quick.
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.
The IRS escalates its collection efforts when the amount owed exceeds $25,000, which can result in severe penalties such as asset seizure, bank levy, wage garnishment, and even passport revocation. If you're unsure how much you owe, you can find more information and guidance here.