Hi,
I'm hoping for some straightforward guidance on how to best approach my situation with the ATO.
I've been involved in cryptocurrency since 2014. During the early years there was very little clear tax guidance around crypto in Australia and I didn't maintain thorough records as a result. Over time several of the exchanges I used were rugged — meaning they collapsed fraudulently or shut down without warning, taking user funds and records with them — making historical transaction reports impossible to retrieve.
Since COVID-19 I have been dealing with ongoing and unresolved health issues that have significantly impacted my day to day functioning and mental health. This unfortunately led to me falling further behind on my tax obligations than I ever intended. I want to be upfront about this as context for why this has taken longer to address than it should have.
My situation in brief:
- I haven't lodged a tax return since approximately 2020
- For the years I did lodge returns from 2014 to approximately 2020, I did not include any cryptocurrency declarations — I understand these returns would need to be amended to reflect my crypto activity as accurately as possible for those years
- My crypto activity from 2014 through to recently has involved numerous exchanges, many of which no longer exist, as well as numerous software wallets over the years including MetaMask, Phantom and others — while I do have access to my current wallets holding my main balances, there are likely older wallets from earlier years that I no longer have access to or am even aware of
- The majority of my crypto history involves losses, with only minor gains along the way that I believe are largely offset by those losses
- During this period I regularly transferred crypto to and from a friend due to banking restrictions on crypto purchases. These were not income — just practical transfers between us to facilitate purchases. We are no longer in contact which makes separating these transactions difficult
- I have limited but not complete records and would need to reconstruct much of this history as best I can from memory and available wallet addresses
I currently have some unrealised crypto gains that I fully intend to declare properly if and when I sell and realise those gains. My concern is ensuring that as long as I have submitted everything else as accurately and honestly as possible up to this point, declaring a future realised gain — even a substantial one — will not create any issues or raise red flags provided everything prior has been addressed to the best of my ability.
My questions are:
- What is the recommended process for voluntarily coming forward with incomplete historical crypto records including amending previously lodged returns that did not include crypto activity?
- Is there an ATO voluntary disclosure process that would reduce any potential penalties given I'm approaching this proactively?
- How does the ATO treat years where accurate records simply don't exist, particularly around the 2014 era when record keeping tools and clear tax guidance for crypto were not yet available?
I am reaching out now because my health has been improving and I want to resolve this properly and move forward with a clean slate. I take my obligations seriously and am committed to getting this right going forward with proper tracking software and professional assistance.
Any guidance on the most practical path forward would be sincerely appreciated.
Thank you
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