Sincerely, Uncle Sam
I don't know about you but I think the best love letters come from Uncle Sam. And by "best," I really mean "worst."
Last month, Uncle Sam's favorite agency, the IRS, began to send lovely letters to more than 10,000 taxpayers that transacted cryptocurrency between 2013 and 2017 and either did not report their income from cryptocurrency or did not properly report their crypto transactions. Recipients of the letters are not in tax trouble...yet. Individuals were instructed to verify their crypto-related income and either file delinquent returns or amend their past tax filings, if necessary.
If you didn't receive a letter and you deal in crypto, this is still very interesting and relevant. Based on one version of the letter, many have deduced that the IRS may have significant guidance coming down about fair market value calculations for crypto. Specifically, this recent correspondence instructs individuals to look at the date and time of their crypto transactions to identify the value as opposed to just the date of the transaction. This is particularly insightful as it reflects a consideration of the volatility for which crypto markets are well-known. As the letters are not official guidance, this is a little speculative but crazier things have happened.
Hopefully the IRS will have actual, thorough, updated guidance by the time the tax filing season rolls around again. However, if you're interested in reading the love letters in the interim, check out the IRS website.