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Crypto Tax Attorney in Palm Beach County
Former IRS Revenue Agent. 35 Years of Tax Experience. On Your Side.
Cryptocurrency tax matters carry real legal risk. Selling, trading, or receiving digital assets can trigger taxable events that many investors underestimate, and the IRS has made enforcement of digital asset reporting a clear priority. At The Law Office of Michael K. Miller, P.A., we represent individuals and business owners throughout Palm Beach County who need more than a tax preparer: they need an attorney who understands how the IRS builds a case.
Michael K. Miller served as an IRS Revenue Agent in Washington, D.C., conducting audits and enforcing U.S. income tax law before entering private practice in 1989. That background is directly relevant to crypto tax representation. We know how the IRS evaluates transaction patterns, identifies unreported income, and selects returns for review. Since 2019, Form 1040 filings have included a digital asset question, and since the 2022 tax year, all taxpayers are required to answer it regardless of whether they engaged in digital asset transactions. Willful non-reporting can carry both civil penalties and criminal exposure, which makes this a legal matter as much as an accounting one.
Contact us online or call us at (561) 693-3734. Schedule a free consultation with our crypto tax attorneys in Palm Beach County and get answers from experienced professionals who listen, explain your options, and offer solutions that reflect your unique situation.
Michael K. Miller’s Credentials for Crypto Tax Representation
Crypto tax questions land at the intersection of IRS enforcement, federal tax law, and rapidly evolving digital asset guidance. Before founding this firm, Miller worked as an IRS Revenue Agent in Washington, D.C., reviewing and auditing income tax matters for the federal government. He understands the internal decision-making process behind audit selection and the factors that draw IRS scrutiny to digital asset activity. He is also a licensed CPA whose pre-law career focused exclusively on tax and accounting matters. He holds a law degree and a Master of Science in Accounting from the University of Virginia, has been a Florida Bar member since 1989, and is admitted to practice before the United States Tax Court.
Miller holds an AV Preeminent rating from Martindale-Hubbell, awarded to fewer than 10% of attorneys nationally, reflecting the highest rating for legal ability and ethical standards. With over 35 years of combined tax, accounting, and legal experience, he is a member of the Palm Beach County Bar Association, the American Bar Association, and the American Society of Tax Problem Solvers.
How We Assist Clients with Cryptocurrency and Digital Asset Tax Issues
Cryptocurrency tax law changes quickly, making legal guidance essential for investors who want accurate filings and a defensible position if the IRS asks questions. We handle a full range of digital asset tax matters:
Accurate crypto tax reporting: We clarify how IRS rules apply to your transactions, including capital gains reporting, income from staking or mining, and NFT activity, to help reduce errors that can lead to penalties.
Responding to IRS notices: When you receive a letter about digital asset transactions, we review your records, identify your exposure, and explain your legal options before you respond.
Resolving unfiled returns involving digital assets: For missed filings that include crypto activity, we advise on the best path forward to help minimize future risk, including whether voluntary disclosure options apply.
Audit representation: Our firsthand knowledge of IRS audit procedures applies directly to crypto audits, where IRS focus areas include unreported income, cost basis accuracy, and transaction classification.
Resolution planning for complex portfolios: Whether you hold assets across multiple exchanges, have DeFi activity, or are working through cost basis reconstruction, we build a plan matched to your situation and risk tolerance.
Common crypto tax issues include failure to report gains from selling or trading, incorrect cost basis calculations, missed income from staking or payments received in crypto, and incorrectly answered Form 1040 digital asset questions. Crypto-to-crypto trades are taxable events, not tax-deferred exchanges, and NFT transactions carry their own treatment depending on holding period and asset classification. We help Palm Beach County investors understand what the IRS expects and build the documentation to support it.
How We Work with Crypto Tax Clients
Our approach is transparent at every stage. Clients know what we’re doing, why, and what it will cost:
Free initial consultation: We review your crypto or NFT transactions, identify potential issues, and explain next steps in plain language.
Personalized risk and solution review: Drawing on our CPA background and IRS experience, we outline practical options and help you weigh them against your circumstances.
Ongoing communication: We keep you updated on IRS notices, relevant rule changes, and filing deadlines throughout the engagement.
Cost-conscious representation: We give you transparency about estimated costs at each stage and avoid unnecessary steps.
Seven-day availability: When an IRS notice arrives or a deadline is approaching, you can reach us any day of the week, including evenings and weekends.
Crypto tax situations involving potential willful non-disclosure benefit from prompt legal consultation before the IRS initiates contact. Voluntary disclosure options may be available, but they’re typically foreclosed once an audit or investigation begins. If you’re unsure whether your past filings are complete or accurate, the right time to find out is before the IRS asks. We can make that conversation straightforward and confidential.
Call (561) 693-3734 to set up your confidential consultation.
Frequently Asked Questions
How Does the IRS Treat Cryptocurrency for Tax Purposes?
The IRS treats cryptocurrency as property under IRS Notice 2014-21, meaning general tax principles for property apply to digital asset transactions. Selling, trading, or converting crypto may result in capital gains or losses you must report. Gains on assets held more than one year qualify for long-term capital gains rates; gains on assets held one year or less are taxed as ordinary income.
Are There State Taxes on Cryptocurrency in Florida?
Florida does not levy a state income tax, so most individuals report and pay crypto-related taxes at the federal level. Certain business activities may trigger additional state disclosures or requirements.
What Records Should I Keep for My Crypto Transactions?
Keep a record of every transaction, including purchases, sales, trades, and conversions. Each record should include the date, the fair market value at the time of the transaction, your cost basis, and counterparty information. Investors who used multiple exchanges or wallets often have gaps in these records, and accurate cost basis reconstruction is one of the most common challenges we see in crypto audits.
Can the IRS Audit Digital Asset Transactions?
The IRS actively audits crypto activity, focusing on incomplete filings, unreported income, and cost basis discrepancies. The agency has issued John Doe summonses to major cryptocurrency exchanges to obtain customer records and uses third-party reporting from exchanges to identify taxpayers with potential underreporting. Consistent, accurate reporting supported by complete records is an important defense.
What Should I Do if I Receive an IRS Letter About Cryptocurrency?
An IRS letter about cryptocurrency should prompt immediate legal review. The right response depends on the type of notice, your filing history, and whether the underlying transactions were accurately reported. Responding without counsel can increase the risk of making statements that complicate your position. Contact our office before responding to any IRS correspondence about digital assets.
If you have questions about cryptocurrency reporting, need help responding to an IRS notice, or want clarity on digital asset tax obligations, contact The Law Office of Michael K. Miller, P.A. today.
How the IRS Enforces Cryptocurrency Tax Compliance
The IRS has treated cryptocurrency as property since IRS Notice 2014-21. That classification means general property tax rules apply: when you sell, trade, or otherwise dispose of a digital asset, you recognize a gain or loss based on the difference between your cost basis and the fair market value at the time of disposition. The same principles that apply to selling stock or real estate apply to selling Bitcoin.
Taxable events are broader than most investors assume. Selling crypto for U.S. dollars is the obvious one, but trading one cryptocurrency for another is also a taxable disposition. Using crypto to pay for goods or services generates a gain or loss at the time of payment. Receiving cryptocurrency as payment for services is treated as ordinary income at fair market value on the date of receipt, not when the crypto is later converted to dollars.
The Form 1040 Digital Asset Question
Since tax year 2019, Form 1040 filings have included a question about digital asset activity. Beginning with the 2020 tax year, the question moved to the top of the form itself, and since the 2022 tax year, all taxpayers are required to answer it regardless of whether they engaged in digital asset transactions. Answering “no” incorrectly, or leaving the question blank, can itself attract IRS attention. The question exists precisely because the IRS uses it to identify potential underreporting.
Starting with rules phased in beginning in 2025, the IRS has required major cryptocurrency exchanges to issue Form 1099-DA to customers and report transactions to the agency. This third-party reporting significantly expands the IRS’s ability to match taxpayer returns against actual trading activity. The gap between what exchanges report and what appears on a return is one of the primary triggers for IRS inquiry.
Staking, Mining, and Other Crypto Income
Staking rewards and mining income are treated as ordinary income at fair market value in the year received, not when converted to fiat currency. Airdropped tokens and cryptocurrency received through promotional programs are similarly taxable as income when the taxpayer obtains dominion and control over the assets. These income events are distinct from capital gains transactions and are reported separately on the return.
Common Crypto Tax Mistakes That Create IRS Risk
Most crypto tax errors stem from a misunderstanding of when a taxable event occurs and how gains and losses are calculated. The consequences range from underpayment penalties to, in cases of willful non-disclosure, potential criminal referral.
Treating Crypto-to-Crypto Trades as Non-Taxable
One of the most common misconceptions is that exchanging one cryptocurrency for another is a tax-free swap. It isn’t. Each trade is a disposition of property. If you exchange Ethereum for Solana, you recognize a gain or loss on the Ethereum at the moment of the trade, based on its fair market value at that point compared to your original cost basis. This applies regardless of whether you ever convert the proceeds to dollars.
Incorrect Cost Basis Calculations
The accounting method used to calculate cost basis, whether FIFO (first in, first out), LIFO (last in, first out), or specific identification, materially affects the gain or loss reported on every transaction. Investors who purchased the same asset at multiple price points and didn’t maintain per-lot records often can’t use specific identification retroactively. Both the choice of method and the quality of underlying records affect audit risk.
Missing Income from Staking, Airdrops, and Payments
Staking rewards, airdropped tokens, and crypto received as payment for services are taxable in the year received. Many investors record these only when they eventually sell, effectively deferring income that should have been reported earlier. This creates discrepancies between exchange records and tax returns that are visible to the IRS when third-party reporting is cross-referenced against filed returns.
Incomplete Records Across Multiple Platforms
Investors with high-volume portfolios or activity across multiple exchanges and wallets often have fragmented records. Cost basis from one platform may not carry over to another. DeFi transactions, liquidity pool deposits and withdrawals, and wrapped token conversions raise additional questions where IRS guidance is still developing. Even where the rules are unsettled, thorough documentation is essential to support the position taken on the return. Reconstructing records after the fact is possible, but more difficult the longer it’s delayed.
“My experience working with Mr.Michael Miller was fantastic.”
My experience working with Mr.Michael Miller was fantastic. His expertise made navigating an unfamiliar and potentially intimidating subject matter possible. He was easy to contact and communicate with through out my case, I appreciated his efficiency , promptness and professionalism all while being friendly and personable. I have already recommended him to friends and wanted to spread the word here as well.
