The tax authority asks where my crypto comes from: what should I do?

Why the authority is asking

Requests about the origin of crypto arrive under different names: a questionnaire, an information request, an audit letter or an invitation to provide documents. They are becoming more frequent because tax authorities now receive data from exchanges and banks, including through international reporting such as the OECD Crypto-Asset Reporting Framework and, in the EU, DAC8. A request often means the authority already holds some information and wants to compare it with yours.

First steps

• Note the deadline and the authority that sent the request.
• Identify the scope: tax years, specific wallets or transfers, values declared.
• Do not send partial explanations in a hurry; a first answer is hard to retract.
• Check whether the assets were fully declared in past years; if not, discuss the options with your advisor before replying.

What a convincing answer contains

The tax authority wants to understand whether the crypto was bought with already-taxed money, earned as income or received from third parties. A good answer connects each step: the initial funds (for example a bank transfer to an exchange), the purchase, the movements between wallets and the current holdings. Blockchain data makes these movements verifiable, but only if the analysis is presented clearly and links on-chain addresses to documented events.

• Statements and transaction exports from exchanges, including closed ones where possible.
• Bank statements showing the transfers to and from exchanges.
• A list of wallet addresses and the path of funds between them.
• Evidence of income events (mining, staking, salary in crypto).

When records are missing or past years are incomplete

Many early holders bought on exchanges that no longer exist or kept no records. The blockchain itself is still there: a forensic reconstruction can show when coins arrived at your addresses, from which type of source and how they moved afterwards. It cannot replace every document, but it often gives the authority a credible and verifiable picture.

If the review shows that some holdings or income were not declared, your answer and any regularisation need to be coordinated. In many countries a voluntary disclosure made after the authority has already asked no longer qualifies for the same treatment, so this is a question for your tax advisor or lawyer before anything is sent.

How Advisorn helps

Your tax advisor or lawyer handles the correspondence with the authority; this page is general information, not tax advice. Advisorn Forensics prepares a signed source-of-funds report based on on-chain data, written so that a tax official in any country can follow and verify each step.