IRS audit business drops to 40-year low, crypto tax panic or exaggeration

The Wall Street Journal recently reported that the IRS's auditing business has fallen to its lowest level in at least 40 years as a result of spending cuts. By 2019, the percentage of audit business in all personal income tax returns is only 0.45%, the lowest level for at least 40 years. This is the eighth consecutive year that the U.S. economy has fallen since the Trump administration took office. Currently, IRS has fewer auditors than at any time since World War II.

Last year was a turbulent year for cryptocurrency traders to cope with audit pressure. In the summer, the IRS announced that it would issue about 10,000 warning letters to cryptocurrency traders, causing a stir. The IRS requires them to clarify whether they have received, sent or exchanged any cryptocurrency since 2013, and advise relevant taxpayers to pay any taxes that may be owed or submit a modified return on the assets they hold. In the following October, sources from the IRS confirmed that a "new batch of audit notices" would be issued soon. However, there was no follow-up to the notice and it was unclear how many people were audited. Judging from the current audit situation, the warning issued by the IRS may be a bit of an overstatement for cryptocurrency traders.