What was your journey into cryptocurrency like? What initially caught your attention and why?
The reason I got involved in cryptocurrency was after hearing about it around 2014. I was very interested in the impact triple-entry bookkeeping could have on our economy, and the potential of bitcoin. I also noticed while working at the Big 4 that they were paying attention to this technology as well, even in its early stages. The reason Camuso CPA began offering cryptocurrency accounting services was after I realized a personal accounting need, like many other investors. My professional background, with years of financial service experience at the world’s largest asset managers, allowed us to quickly add value to investors by providing accounting and tax-related services.
When did your firm begin offering crypto accounting as a service? What specific services do you offer to crypto clients?
We began offering cryptocurrency services at scale during 2017. We work with hundreds of investors nationwide.
We are a full-service firm which offers cryptocurrency accounting, tax preparation and tax planning. We have saved crypto investors millions of dollars in taxes, but are even more concerned with protecting investor’s assets through proper advisory and accurate accounting. Outside of cryptocurrency, we work heavily with other types of investors including real estate investors and small businesses.
What are the top three mistakes you see crypto clients make when it comes to accounting?
1. Lack of documentation and accounting/documentation systems.
2. Lack of understanding of tax code and tax planning opportunities.
3. Lack of proper cash flow management and financial planning.
What are the top three challenges when it comes to accounting for crypto?
1. IRS Clarity
Like many investors, CPAs are also waiting on IRS clarification regarding many specific questions on tax and accounting for cryptocurrency. After recent published comments from the IRS, I am becoming more hopeful that we will see at least basic clarification sooner rather than later.
2. Investor Tax Awareness and Clarity
Often I still see new clients who leave money on the table with the IRS either though tax penalties or missed planning opportunities. Crypto investors need to become as knowledgeable about tax as they are technology.
3. Lack of Documentation Systems for New Clients
What's the future of crypto accounting?
This is hard to determine for sure but it will involve further IRS clarification on the tax code related to cryptocurrency, then enforcement actions for non-compliant taxpayers. Enforcement will become increasingly more sophisticated and frequent, using a combination of general inquiries like we have seen in Canada, international cooperation using agreements like the J-5, exchange audits, technology, and check the box provisions, similar to FBAR on returns to detect non-compliant cryptocurrency investors. With more IRS clarity and tax enforcement, more investors will be able to become confidently compliant with the IRS, and more investors will work to legally minimize their taxes with strategic tax planning.