The Clinton Donnelly Show

A wallet transaction can show that crypto moved, but it cannot show whether the transfer was theft. Clinton Donnelly of CryptoTaxAudit discusses the records that may help document a claimed loss, including an FBI IC3 report, a police report, transaction history, and forensic analysis. He also explains why the IRS may examine the claim. FBI Internet Crime Complaint Center: https://www.ic3.gov/ Disc...

Crypto taxes not ready by April 15, 2027? Filing an IRS tax extension gives you more time to prepare your return, but it does not extend the deadline to pay taxes owed. In this episode, Clinton Donnelly of CryptoTaxAudit explains the difference between filing and payment deadlines, why cryptocurrency gain calculations and K-1 forms can delay tax preparation, and why overpaying taxes does not earn...

How do exchange records connect crypto investors with the IRS? Clinton Donnelly of CryptoTaxAudit discusses IRS Letters 6173, 6174 and 6174-A, exchange information, and crypto tax reporting. He also shares his analysis of AI, Palantir, IRS case selection, notices concerning 2024 tax returns, and staffing and collections. The episode closes with bringing prior-year crypto reporting up to date. Rece...

FinCEN has withdrawn two proposals involving unhosted wallets and crypto mixing. Clinton Donnelly of CryptoTaxAudit discusses the proposed reporting requirements for banks and financial institutions and why he sees the withdrawals as a shift in regulatory direction. The discussion covers KYC information, suspicious activity reports (SARs), Tornado Cash, and Clinton’s comparison with the SEC and CF...

Can you replace a tax return you've already filed with the IRS instead of submitting an amended return? In this episode of The Clinton Donnelly Show, Clinton Donnelly explains how superseding tax returns work and why filing an extension may provide taxpayers with more flexibility when their tax calculations are not yet finalised. Clinton discusses a recommendation from National Taxpayer Advoca...

Crypto tax software can produce questionable results when transaction history or cost basis is incomplete. In this episode, Clinton Donnelly shares two real client examples involving missing crypto records. In one case, records from an old exchange were unavailable. Trade confirmation emails and Coinbase records helped support that incoming Bitcoin represented a transfer of the client’s own assets...

In this focused excerpt from a longer Q&A, Clinton Donnelly speaks with Michael Raanan of Landmark Tax Group about what happens after a substantial IRS tax bill arrives. Michael explains why the first step is to open the notice, check the deadline, and determine whether the amount is actually correct. They then discuss how the IRS evaluates a taxpayer’s ability to pay and when options such as...

Clinton Donnelly of CryptoTaxAudit discusses the BitBank sanctions story, access to the U.S. dollar system, and the risks associated with holding crypto on an exchange. The discussion covers correspondent banking, potential effects on customer deposits and withdrawals, and the distinction between exchange solvency risk and sanctions exposure. Clinton also references FTX before turning to the wider...

Form 1099-DA provides transaction information to the IRS. How useful is it for taxpayers and their preparers? Clinton Donnelly of CryptoTaxAudit discusses customer experiences with the forms for the 2025 tax year, including document length, first-year cost-basis reporting, different exchange formats and Form 8949 boxes. He also considers crypto income reporting estimates, questions around study me...

Could fewer IRS employees mean fewer crypto audits? Clinton Donnelly, founder and CEO of CryptoTaxAudit, discusses IRS staffing changes, automation, and what they could mean for cryptocurrency investors. This episode covers workforce reductions, planned customer service hiring, AI-assisted systems, and audit selection. Clinton also discusses CP2000 and CP2501 notices and shares CryptoTaxAudit’s ap...

TIGTA found that more than 14,000 IRS employees on administrative leave retained access to one or more sensitive systems. Clinton Donnelly explains what this potential security risk could mean for crypto holders, including what 1099-DA and exchange data may reveal, why private-wallet balances are not automatically visible to the IRS, and how a virtual mailbox may help protect your home address. Th...

Missing crypto transaction records can make it difficult to calculate and support your cost basis accurately. When exchange data is incomplete or no longer available, crypto tax software may calculate gains using incomplete information. In this episode, Clinton Donnelly explains ways missing crypto records may be reconstructed using supporting evidence such as trade confirmation emails. He also sh...

California’s proposed billionaire wealth tax could impose a one-time tax of up to 5% on covered wealth above $1 billion. In this episode, Clinton Donnelly breaks down what that could mean in practice, including the potential need to liquidate investments, the additional tax consequences that can follow, and why some wealthy residents may decide to leave California altogether. Clinton also looks at...

Crypto exchanges may report a transaction as short-term or long-term based on when the asset was transferred onto the exchange. That can create a reporting mismatch when crypto was bought elsewhere, moved through private wallets, and held for more than a year before being sold. In this episode, Clinton Donnelly explains: Why exchanges may not know your true cost basis How wallet transfers can affe...

If you have traded on BitMEX, BitMart, AscendEX, or another cryptocurrency exchange that is closing operations, download your transaction history before you lose access. Without those records, it may become much harder to prove your crypto cost basis for tax purposes. Missing transaction data can also cause crypto tax software to use older or lower cost basis figures, potentially overstating your...

The National Taxpayer Advocate has proposed four changes intended to help cryptocurrency investors correct reporting mistakes, understand the tax rules and reconstruct missing transaction records. But do these recommendations address the real problems crypto taxpayers face? Clinton Donnelly, EA, examines each proposal and explains why crypto tax compliance is more complicated than issuing addition...

The IRS has officially classified certain abusive Charitable Remainder Annuity Trust arrangements as listed transactions. CRAT strategies have been promoted to crypto investors and other owners of highly appreciated assets as a way to claim a charitable deduction, receive annuity payments, and potentially pay 0% tax. But these arrangements can involve strict disclosure requirements, substantial pe...

The answer depends on what actually happens to the asset during the bridge. In this episode, crypto tax expert Clinton Donnelly explains why different bridging methods can produce different tax outcomes. A wrapped asset may not create an immediate taxable event if the original asset remains locked and ownership does not change. A mint-and-burn or swap-based bridge may be treated differently if the...

Illinois passed SB 3019, introducing a 0.2% tax on digital asset transactions by Illinois residents. At first glance, 0.2% may seem insignificant. Clinton Donnelly argues that the real issue is not the size of the tax. It is the precedent it creates. In this episode, Clinton explains: What the Illinois Digital Asset Tax Act does Why it is being described as a “privilege tax” Which exchanges and br...

The IRS is moving toward stricter crypto tax reporting through expanded 1099-DA requirements and potential application of wash sale rules to digital assets. In this episode, we break down what is actually changing, how it affects crypto investors, and why this represents a major shift in how digital assets are tracked and taxed. We cover: • How wash sale rules may apply to crypto transactions • Wh...

A new AI wealth fund proposal would give the public a 50% stake in major AI companies. In this episode, Clinton Donnelly breaks down the American AI Sovereign Wealth Fund Act and explains why this proposal may be more political talking point than future tax law. Clinton looks at the risks of forced public ownership in AI companies, including government control, shareholder influence, corruption ri...

ADA Cardano staking rewards may be taxable when received if the taxpayer has dominion and control, but Paschall v. Commissioner also raises important questions about constructive receipt and Cardano validator mechanics. In this episode, Clinton Donnelly, founder of CryptoTaxAudit and known as the Crypto Tax Fixer, breaks down Paschall v. Commissioner, T.C. Memo. 2026-46. Paschall was staking Carda...

The IRS rolled out Form 1099-DA, and Clinton Donnelly says the first version is already creating serious problems for crypto investors and tax preparers. In this episode, Clinton explains why the 1099-DA collects the data the IRS wants, but fails to help taxpayers file correctly. The information may be there, but it is hidden, buried, and difficult to enter properly on a tax return. He also explai...

The IRS says tax season was a success, but crypto taxpayers may be facing a very different reality. In this episode, Clinton Donnelly explains why the new IRS Form 1099-DA may give the IRS more crypto transaction data while still leaving taxpayers and tax preparers unsure what numbers actually belong on the tax return. Clinton breaks down how IRS automation, CP2000 under-reporting letters, missing...

Clinton Donnelly recently attended the CERCA IRS conference, where IRS electronic tax reporting, taxpayer communication, automation, and modernization were discussed with IRS leadership. One major takeaway stood out: CryptoTaxAudit was the only crypto-related firm attending the conference. That matters because the 1099-DA is becoming one of the most important reporting forms crypto taxpayers will...