Crypto Audit Help: Who Can Represent You Before the IRS

Short answer: in an IRS crypto audit, a CPA, an enrolled agent or an attorney can represent you on any matter, authorized on Form 2848. Choose one who can read wallet and exchange data, and reconcile your history to Form 8949 before anyone answers the IRS. A crypto reconciliation firm prepares that evidence; your representative presents it.

An IRS letter about crypto often concerns a return filed from software output, with figures that are hard to explain line by line. The first instinct is to search for crypto audit help and hire the first firm that uses the right words. The words are cheap. What matters is who is allowed to speak for you, and whether anyone can prove the numbers.

This guide explains who can represent you before the IRS in a crypto examination, how to choose between them, what the work divides into, and what you should have in hand before anyone replies. I am Chris Herbst, founder of CountDeFi. We are US crypto tax accountants: we reconcile crypto histories and produce the reports a client's own CPA, enrolled agent or attorney uses. We are not a CPA firm and we do not represent taxpayers before the IRS, which is why this guide is about choosing well, whoever you hire. For the audit process itself, step by step, see our guide on what happens in an IRS crypto tax audit.

Who Can Represent You in an IRS Crypto Audit?

The IRS sorts tax professionals by representation rights, not by specialty. There is no IRS credential for crypto, so a firm calling itself a crypto audit specialist tells you nothing about what it may do on your behalf.

CPAs, enrolled agents and attorneys

According to the IRS, enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. They may represent clients on any matter, including audits, payment and collection issues, and appeals. Enrolled agents are licensed by the IRS itself, CPAs by state boards of accountancy, and attorneys by state courts or their designees, such as the state bar.

The preparer who signed your return

Publication 556 lists the person who prepared the return and signed it as the preparer among those who can represent you in an examination. Preparers in the Annual Filing Season Program have limited rights: they may represent clients whose returns they prepared and signed, before revenue agents and customer service staff, but cannot represent clients regarding appeals or collection issues.

Preparers with no credential

A preparer with a PTIN but no credential and no Annual Filing Season Program record may prepare returns. The IRS says that beginning January 1, 2016, that is the only authority they have: no authority to represent clients before the IRS, except for returns they prepared and filed on or before December 31, 2015.

Low Income Taxpayer Clinics

If cost is the barrier, LITCs can represent you before the IRS or in court on audits, appeals, tax collection matters, and other tax disputes, for free or a small fee. The IRS says eligibility generally depends on income being below a threshold, and the amount in dispute is usually less than $50,000.

Representing yourself

You may act on your own behalf. The IRS lists a right to representation, by oneself or an authorized representative, among your rights in an audit.

How Representation Works: Form 2848

A representative acts for you only once you have authorized them in writing.

What Form 2848 does

The IRS says to use Form 2848 to authorize an individual to represent you before the IRS, and the individual must be a person eligible to practice before the IRS. The form names the representative, the tax matters and the years, so it should cover every year the letter concerns.

Can your representative attend without you?

Yes. Publication 556 says that if you want someone to represent you in your absence, you must furnish that person with proper written authorization, and Form 2848 is one way to do it. For an in-person interview, the IRS conducts audits either by mail or through an in-person interview, and a field audit may take place at the accountant's or representative's office.

What Form 2848 does not do

It does not make anyone competent in crypto. It authorizes a person; it says nothing about whether that person can trace a transfer between two of your wallets or explain why software reported a gain on a deposit. That is the second half of the choice.

What Crypto Audit Help Actually Involves

An IRS crypto examination has two jobs that are often done by different people. One is representation: speaking to the examiner, meeting deadlines, negotiating and appealing. The other is evidence: proving every figure on the crypto lines of your return from source data.

Proving the figures

The IRS treats digital assets as property. If you sold, exchanged or otherwise disposed of a digital asset held as a capital asset, you report it on Form 8949, Sales and Other Dispositions of Capital Assets, and income from staking, mining and similar goes on Schedule 1. The IRS also says to keep records documenting your purchase, receipt, sale, exchange or any other disposition of the assets. In an audit, the examiner asks you to support those lines, and for most crypto investors the weak point is cost basis.

Why software output is not evidence

Tax software calculates from whatever data it was given. If an exchange was never connected, or a transfer between your own wallets was never matched, the software books a sale with no cost, or income that was really your own money moving. An examiner who asks where a figure came from needs an answer traced to exchange records and blockchain transactions, not a screenshot of a tool. Our guide on fixing missing cost basis covers the common causes.

Who does which part

Some representatives do both jobs. Many do not have the tooling to rebuild years of multi-chain history, and work with a reconciliation firm that hands them a documented history and reports. That is the part CountDeFi does: we rebuild the history, and your CPA, enrolled agent or attorney presents it. See who prepares crypto tax reports for your CPA for how that handover works.

Who Does What in a Crypto Audit

The table sets out each role against the IRS's own description of representation rights.

How To Choose the Right Help for Your Audit

The right choice depends on what the letter asks and how far the matter has gone.

A letter asking for documents on a few sales

If the IRS asks you to support a handful of crypto transactions and your records are complete, you may be able to answer it yourself or with the preparer who signed the return. If the records do not tie to what you filed, get the history reconciled first. Our guide to IRS crypto letters explains which letters are reminders and which need a response.

A full examination of several years

Where the examiner is looking at several years, many wallets or DeFi activity, hire a CPA, enrolled agent or attorney with unlimited representation rights, and make sure someone can rebuild the data from source. Ask each candidate directly which of the two jobs they will do themselves.

Penalties, large amounts or anything beyond a civil audit

If the amounts are large, if penalties are proposed, or if you have any concern about exposure beyond an ordinary civil audit, speak to a tax attorney before you respond. That is a legal judgment, not an accounting one.

How to check a representative's credentials

The IRS runs a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications that lists preparers holding IRS-recognized credentials or an Annual Filing Season Program record. A CPA licence is checked with the state board that issued it, and an attorney with the state bar. Our guide on whether you need a crypto CPA walks through each check, and questions to ask a crypto CPA covers the crypto side.

Questions that reveal crypto competence

Ask how they would treat a transfer between two of your own wallets that software booked as a sale, how they would establish basis for coins bought on an exchange that has since closed, and what they would hand the examiner to support a DeFi withdrawal. A competent answer names the source records, not the software.

What To Have Ready Before Anyone Replies to the IRS

Whoever represents you, the response is only as good as the evidence behind it.

The letter and its deadline

Keep the letter and note the response date. The IRS says that if you do not respond by the date on the letter, we will complete our audit and send you an audit report with our proposed changes. The IRS also says it notifies you of an audit by mail and won't initiate an audit by telephone, so treat a call claiming to open an audit with suspicion.

A reconciled history for every year in question

Assemble exchange exports, wallet addresses on every chain, and records from closed platforms, then reconcile them so every coin that arrives can be traced to where it came from. The totals should tie to the Form 8949 and Schedule 1 figures you filed, or show exactly where and why they differ.

Records for the right period

The IRS generally says to keep records for 3 years, and for 6 years if you do not report income that you should report and it is more than 25% of the gross income shown on your return. For crypto, the records that prove cost basis can be much older than the year under audit, because the purchase may date back years before the sale.

If the history shows a mistake

Sometimes the reconciliation shows the return was wrong. Your representative decides how to present that to the examiner. Our guide on amending a crypto tax return with Form 1040-X explains how corrections work outside an audit.

If You Disagree With the Audit Result

The IRS says an audit concludes in one of three ways: no change, agreed or disagreed. If you disagree, the path has fixed stages.

The 30-day letter

After the closing conference you receive a package including a letter (known as a 30-day letter) notifying you of your right to appeal the proposed changes within 30 days, with a copy of the examination report. The IRS also offers fast track mediation for many disputes arising from examinations.

The Independent Office of Appeals

The IRS describes its Independent Office of Appeals as there to resolve disputes without litigation, in a way that is fair and impartial to the government and to you. The Taxpayer Bill of Rights includes the right to appeal an IRS decision in an independent forum.

The 90-day letter

If you do not respond to the 30-day letter, or do not reach agreement in Appeals, the IRS sends a 90-day letter, which is also known as a notice of deficiency. You then have 90 days (150 days if the notice is addressed to you outside the United States) to file a petition with the Tax Court. At this stage an attorney or other practitioner admitted to the Tax Court is the right call.

Where CountDeFi Fits

CountDeFi is a firm of crypto tax accountants. We are not a CPA firm, and we do not sign returns or represent taxpayers before the IRS. What we do is the evidence half: we rebuild your full crypto history across exchanges, wallets and chains, match transfers, establish cost basis, and produce reports your CPA, enrolled agent or attorney can present to the examiner. I hold the Chartered Business Accountant in Practice (CBAP) designation with the Chartered Institute for Business Accountants and am a General Tax Practitioner (GTP) with the South African Institute of Taxation. If you are facing an examination, see our IRS crypto audit support service, or our crypto tax accounting service for the reconciliation itself.