IRS Bitcoin Donation Audits and Notices

Bitcoin IRS Donation
Bitcoin charitable contributions require filing of IRS Form 8283 and a qualified IRS appraisal in order to be tax deductible when donations exceed $5,000 annually. The charity also needs to provide a thank you letter to the donor.  The advantage to the donor is:

1. No capital gains on donated Bitcoin.
2. Fair market value is deductible amount if Bitcoin held more than one year.​

IRS Tax Notices 
Recently the IRS has issued tax notices for IRS Form 8283s with Bitcoin listed in Part 1 of IRS Form 8283.  The taxpayer making the mistake that Bitcoin is treated like stock donations is being disputed by the IRS and new signed IRS 8283s are requested. Providing signed IRS 8283s have successfully resolved IRS notices to date.

IRS Tax Audits 
Bitcoin charitable contributions discovered in Schedule An IRS charitable contribution documentation letter audits are being denied without signed IRS 8283s and qualified appraisal reports.  Even though clear IRS court cases deny noncash donation deductions with no original filing of Form 8283 recent IRS letter audits have been successful defended by quickly providing IRS signed Form 8283s and appraisal reports to the letter audit IRS examination department.