David Gebhardt was a Tennessee-licensed attorney from Brentwood. According to DOJ, he bought cryptocurrency, used decentralized exchanges and nominees to conceal income, and failed to report millions of dollars in income from cryptocurrency sales and his consulting business.

From March 2018 through December 2022, DOJ says Gebhardt withdrew approximately $6.6 million from cryptocurrency sales. Despite being warned by his accountants to report all cryptocurrency income, he failed to do so, and on his 2020 through 2022 returns he indicated that he did not engage in virtual currency transactions when he had.

Jason explains why the digital asset question on Form 1040 matters, how crypto records can become evidence, and why “I didn’t receive a tax form” is not a defense to failing to report income. The episode also covers the better path: transaction reconstruction, Form 8949, Schedule D, amended returns, payment planning, penalty strategy, and keeping serious tax problems in the civil IRS lane whenever possible.

This episode is for taxpayers, business owners, crypto investors, attorneys, accountants, enrolled agents, CPAs, and anyone who has digital asset activity that has not been properly reported.

Key Takeaways:

• The IRS digital asset question must be answered accurately. Taxpayers must answer “Yes” or “No” to whether they received, sold, exchanged, or otherwise disposed of a digital asset during the year.
• Digital asset income must be reported on the federal tax return.
• Sales, exchanges, and other dispositions of digital assets held as capital assets generally belong on Form 8949, with totals summarized on Schedule D.
• Ordinary income from digital assets, including forks, staking, and mining, generally belongs on Schedule 1.
• Taxpayers must report digital asset income, gains, or losses whether they receive Form 1099-DA or not.
• When accountants warn a taxpayer to report income, that warning can become a major fact if the taxpayer later files false returns.
• A prior filing problem is usually easier to fix before IRS-CI is involved.

Resources Mentioned:

• DOJ case source: https://www.justice.gov/usao-mdtn/pr/brentwood-attorney-pleads-guilty-tax-fraud
• IRS digital assets page: https://www.irs.gov/filing/digital-assets
• IRS digital asset reporting reminder: https://www.irs.gov/newsroom/reminders-for-taxpayers-about-digital-assets
• The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com