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Coinbase recently informed about 13,000 of its customers that it was transmitting their information to the United States. Coinbase informed those concerned that it would provide tax identification number (social security number), name, date of birth, address and transactions from 2013-2015 to the Internal Revenue Service (IRS) before March 16, 2018.

So, what should you do if you received one of these letters? Coinbase advises recipients to contact a tax lawyer. It sounds good, but also quite boring.

If you feel up to it, you might also want to consider it first, panic, and then use one of the many "creative" approaches designed to make the problem completely disappear. Here is a handy guide to some of these poorly designed approaches, all based on the recent Department of Justice tax lawsuits:

Transfer Assets and Financial Accounts to a Parent or a friend, so the IRS can not reach them. That's what the Tennessee dentist, Andrea Polk, tried unsuccessfully to do after being valued at $ 160,000 in payroll taxes and $ 113,781 in income taxes. What could (and probably should) be a simple case with IRS Collections turned into a criminal trial, a three-year prison term, and a court order for Ms. Polk to pay over $ 650,000 at the IRS.

File false returns and ment to IRS agents. That's what Colorado businessman Sergio Murillo tried to do, according to the DOJ's indictment. He would have had customers write him checks and put them in his personal account, rather than the business account. Then he would have filed false tax returns and, most importantly, lied to the IRS agents about the accounts. Undervalued amounts each year were relatively small compared to other federal offenders and never exceeded $ 100,000. One may wonder if he would have faced criminal charges if he had not lied to agents.

Create fake documents to give the IRS an audit. This is remarkably what the Tax Court Judge, Diane Kroupa, has attempted to do, according to an indictment from the Department of Justice. She and her husband allegedly misled the agent into believing that the personal expenses were in fact business expenses. Perhaps if Judge Kroupa had not been a judge of the Federal Tax Court sitting, and maybe they had not tried to induce the auditors in error, that would not have ended up being a criminal case. But hey, it's worth trying, is not it?

As these cases show, some taxpayers panic and make their problem (probably manageable) IRS much, much worse. Panic in the face of a possible IRS investigation is undoubtedly understandable. Nobody wants to deal with an IRS agent asking deepening questions, especially if you have made reporting errors in the past. But it's often worth taking a step back, breathing deeply and carefully evaluating your options.

It is also important to remember that IRS employees are also people. Now, that does not mean that you have to love them or that you want them to manage to collect as much tax as possible. But this should mean that you think about how to approach them strategically, since they are human and that we can expect to have some normal human reactions.

Suppose that an IRS agent has a dozen records, all with a series of crypto-tax related issues, as well as various compliance history. Which taxpayer do you think they will refer to for criminal prosecution? The one whose tax returns had the biggest adjustments in terms of dollars? Or the taxpayer who was rude to them, who lied to them, and who then refused to cooperate with the investigation? Fair or not, too often, it's the little things that make the difference, especially when the emotions are strong.

So, the advice of Coinbase to consult a qualified attorney is probably a good start if you have received the letter (or if you know you have problems with crypto tax compliance to otherwise clean up ). But beyond that, staying calm and thinking clearly is essential. Crypto-tax problems will inevitably lead to heavy fines, and some people will be prosecuted. However, for most people, problems can be handled with care and responsibility. Be careful there

The opinions and interpretations in this article are those of the author and do not necessarily represent those of Cointelegraph.