In this episode of Block & Order, Kyle and Moish welcome Mark DiMichael, Partner at Citrin Cooperman in the Valuation and Forensic Services Group and founder of the firm’s Digital Assets practice, for a conversation on crypto forensics and blockchain investigations. Mark explains how forensic accountants trace cryptocurrency across wallets, exchanges, and the blockchain to uncover hidden assets in cases like divorce disputes, fraud, and litigation. The discussion also explores how investigators translate complex blockchain activity for courts and how evolving regulations and IRS reporting requirements are shaping the future of crypto investigations.

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Chapters:

00:00 Welcome to Block & Order
05:00 Meet Mark DeMichael: Crypto Forensics Background
09:10 Investigating Hidden Crypto in Divorce Cases
12:46 Challenges Recovering Crypto in Scams & Frauds
21:11 Subpoenaing Exchanges
25:57 Managing Crypto Taxes for Investors & Traders
29:49 IRS Tools, 1099-DA, and Crypto Tax Enforcement
33:59 Reporting Gains: HIFO vs. FIFO and Compliance Tips
38:18 Handling Losses: NFTs, Bankruptcies, & Write-Offs
41:05 Corporate Governance Issues with Crypto
44:02 Litigation & Disputes in Crypto Companies
54:23 Tax Compliance & Protecting Yourself

 

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Transcript:

**This transcript has been prepared automatically by AI and may contain inaccuracies**

Mark DiMichael [00:00:00]:
I’d say for the people who are worried about the taxes and the 1099s, if you’re behind on taxes, it only gets worse. Do something about it now.

Kyle Lawrence [00:00:21]:
Welcome to Block Order, the show that brings order to the manic pace of legal news in the world of Web3 and AI. I’m your host, Kyle Lawrence, and with me as always, by the power of post-production editing, Mr. Moishe Peltz.

Moish Peltz [00:00:36]:
Here I appear, Kyle.

Kyle Lawrence [00:00:37]:
Well, I’m glad that it’s you and not the AI version of you. So that’s always—

Moish Peltz [00:00:41]:
you can’t tell these days. I can’t. I wouldn’t take that to the bank.

Kyle Lawrence [00:00:45]:
If we’re being honest, I don’t know if it’s you and you don’t know if it’s me. Well, Moishe, I don’t know if you know this, but it is tax season. And so what do we do at Block Order? Give the people what they want. So coming up, we have Mr. Mark D’Amico. Who heads up the digital assets group at Citron Cooperman. And he is a true authority in the world of crypto taxes, reporting, finding assets in divorces. He’s got quite the CV, as it took me half the episode just to run down his list of accomplishments.

Moish Peltz [00:01:12]:
Well, you know, I knew it was tax season because I got my 1099-DA form in the email. And like, oh man, good thing we’re having Mark on. So it’s very, very appreciative of Mark taking time out of busy tax season to come spend a few to spend some time with us. So yeah, here we are.

Kyle Lawrence [00:01:29]:
You know, I always, as we say on the show, not legal advice, not financial advice, but everybody file your taxes. Don’t do not cheat on your taxes. And obviously we know enough. We’re not tax lawyers, but we know enough about not how not to step in landmines vis-à-vis our holdings. But one of the things that Mark talked about is admittedly something I don’t have a ton of experience with is what happens to these assets in the event of a divorce. I mean, he’s really an expert in that field. And I know you have some experience in that as well.

Moish Peltz [00:02:01]:
Yeah, I’ve seen some stuff, as they say. And yeah, it’s not, it’s not pretty. You know, it’s just the amount of time and energy that it takes to chop up someone’s crypto is not something I guarantee anyone wants to go through. So I would recommend one, not, not getting divorced, but, but two, no matter what, keeping track of your crypto so that if you have to chop it in half, it’s going to be easier to do so. And obviously file your taxes.

Kyle Lawrence [00:02:32]:
And if you are getting divorced and you feel that your soon-to-be ex-spouse is hiding assets from you, you should contact Mark. We will endorse Citrin Cooperman for that. There you go. Well, without further ado, everybody pay attention and buckle up. Coming at you with Mark DeMichael. So Mark, I have to ask you a question before we get into anything of actual importance. Your name, as you know, is Mark DeMichael, and I want to ask you how often your name just gets completely inverted and/or butchered. And before you answer that, the reason I ask is twofold.

Kyle Lawrence [00:03:05]:
One, you’re talking to two people whose names just get eviscerated all the time inexplicably, which I don’t understand. But lo and behold, that’s how the cookie crumbles. And secondly, my father had this friend, his name was Don Douglas, but they all made fun of him and called him Doug Donless to the point where I think when he invited him to his wedding, they sent the invitation to Doug Donless. So does that ever happen to you? How often do you get Mike DeMarco?

Mark DiMichael [00:03:32]:
Am I just talking about that? Yeah, fairly often. Just people calling me Michael in general. And it’s something, you know, over the years I was always like, maybe I to just go by Mike. My grandfather, everybody called him Mike. His name was Salvatore DeMichael, but he just went by Mike, I guess, because it was easier.

Kyle Lawrence [00:03:51]:
Our mascot is here. I mean, I’ve tried that sometimes. I’ll go to Starbucks and I’ll tell them my name is James, but when they start calling James, I forget that I told them that and I just stand there and kind of know this guy really isn’t rude.

Moish Peltz [00:04:04]:
I definitely have a Starbucks name because, you know, It’s just like, all right, I don’t want to deal with it today.

Mark DiMichael [00:04:11]:
Yeah. Oh, I’ve just always gone with Mark. It works. It’s one syllable, nice and easy, hard to mess up. But you’re right, when it does get combined with my last name, there’s—

Kyle Lawrence [00:04:21]:
I would just think it’s rude. Like if somebody called you Mike, I’d say, well, one, that’s not my name, but two, if it was Michael, why would you assume that I like to be called Mike? Now you’re just wrong and rude.

Mark DiMichael [00:04:31]:
I don’t know. Yeah, it just, it happens often enough. I know people don’t mean it for the most part, so rolls off my back.

Moish Peltz [00:04:38]:
I get it. The kind of content you can only get on Block Order.

Mark DiMichael [00:04:42]:
That’s right.

Kyle Lawrence [00:04:43]:
There you go. Well, joining us on Block Order, Blockheads, we’d like to give a very warm B&O welcome to Mark DiMichel. Mark is a partner— now we’re going to be conscious about it the rest of the episode. Mark is a partner at TitchenCooperman and the founder and leader of the firm’s digital assets practice group. He works across crypto forensics, valuation, and litigation support, helping his clients from mining companies and funds to token issuers and NFT marketplaces to navigate accounting, tax, investigation, Investigations and Disputes. I don’t have enough time in the episode to list all your certifications, but I’m going to try it. You’re a CPA, a Certified Cryptocurrency Forensic Investigator, CFF, ABV, CFE, expert testimony experience in federal and state court arbitrations. You’ve been featured in the New York Times and CNBC, specifically talking about crypto and divorce and hidden assets, which we’re definitely going to get into on this episode.

Kyle Lawrence [00:05:33]:
And you’ve helped track millions of dollars in crypto since focusing on tracing digital assets. Since starting back in 2018. Please give it up. Warm B&O welcome for our friend and yours, Mr.

Mark DiMichael [00:05:44]:
Thank you.

Kyle Lawrence [00:05:45]:
Thank you, Kyle. Yeah, that was pretty good. That’s a, that’s a pretty long laundry list of accomplishments there, my guy.

Mark DiMichael [00:05:50]:
Yeah, I’ve been doing this a while. I’ve, as you mentioned, 2018, I started doing crypto forensics and there weren’t that many people in the private sector at that time doing crypto forensics. There was, you know, government work that was out there. Any money laundering, shutting down Silk Road. But at that time, when I wrote my first article on digital asset forensics, it just wasn’t that common for an accounting firm or an investigation firm on the private side of things to do this type of work, this litigation support work.

Kyle Lawrence [00:06:23]:
That’s really true. What was your first foray into crypto? What was the sort of inflection point where you said, wow, there’s something here, let me devote part of my professional life to looking at this?

Mark DiMichael [00:06:35]:
Stuff? Well, I’d say it was back in 2016 I started learning about digital assets, Bitcoin specifically. I didn’t think I even knew about the others at the time, but I thought it was so interesting. I thought it was the concept of like data privacy and the concept of, you know, privacy on the computer, on the internet, on your phone. This is like the biggest spy device that has ever been invented. Um, that concept is always something that kind of resonated with me and I don’t feel, as an accountant, money is what I do, and I don’t feel that our financial system gives that level of privacy to the participants that it should. Like, if I swipe my Visa card in a gas station, a grocery store, wherever, Visa knows about my transaction, and they’ll turn that information over to the government or whoever. I don’t know if they even have the right to sell that data. To me, that’s a problem.

Mark DiMichael [00:07:32]:
That’s not the way money should work. Back with cash, it used to be if I spent money at the grocery store, it was between the two of us. It was between me and the grocery store. That was the transaction. Now there’s this third party that’s in there that has potentially government reporting responsibilities as well. That just never sat well with me. Bitcoin kind of, I saw it as a way out of that crazy system that it kind of, it just made sense. And I also realized my practice investigations, people hiding assets, hiding income, I deal with that all the time.

Mark DiMichael [00:08:08]:
And I just figured one day I’d be finding hidden Bitcoin in a divorce case. That was kind of something I had in my head and now I do it all the time.

Kyle Lawrence [00:08:18]:
Yeah, it’s fantastic. And, you know, it kind of leads into one of the initial questions that I have. And you’ve alluded to it in the lead up to it. That picture just changed. That’s not— that’s an electric picture frame. Whoa.

Mark DiMichael [00:08:30]:
I didn’t even expect that.

Moish Peltz [00:08:33]:
Yes.

Mark DiMichael [00:08:33]:
Yes. It’s called a mural. It cycles through. I probably have 100 pictures loaded on it.

Kyle Lawrence [00:08:38]:
It’s a picture frame TV. You just interrupted my momentum. I don’t know where to go.

Moish Peltz [00:08:45]:
All right.

Kyle Lawrence [00:08:45]:
Here. Well, the power of editing. So crypto is auditable. Identity is the hard part. Blockchain, as we all know, is immutable, but the attribution and obfuscation are where the investigations get tricky. How do you, as a practitioner, as a forensic accountant, where do you even start when somebody comes to you and says, you know, I think my, you know, I’m going through a divorce, my spouse, I believe, has millions of dollars in assets. Where do you go?

Mark DiMichael [00:09:11]:
Just where’s the starting point? Yeah, absolutely. We have a number of tools at our disposal, but usually my starting point is the information that we have that’s in front of us. We usually have bank statements that we can work off of. Let’s say it’s a divorce case, just because we were talking about that to begin with. We look at the on-ramps and the off-ramps. There’s usually dollars going from a bank account to Coinbase or some other crypto asset exchange, or coming back in. You quantify that, and then you at least know where to send the first set of subpoenas. Once you get the records back, that’s when you might have to start doing blockchain tracing.

Mark DiMichael [00:09:48]:
So I might see They bought 5 Bitcoin on Coinbase, they move it to an address, and that’s when I start to use the blockchain itself. And we have a tool called Qlue, Q-L-U-E. It’s by Blockchain Intelligence Group. It’s a competitor of Chainalysis. That’s the one everybody talks about, Chainalysis and Elliptic. I like Qlue. I’ve thought about switching, but what I like about Qlue over Chainalysis is it’s very good at showing timing of how things happen. The coins were here, then they moved here, then they moved there.

Mark DiMichael [00:10:23]:
It shows everything. I’m able to show things chronologically. And with the Chainalysis product, it’s— I think it’s more designed for like bank compliance. They don’t care as much about when things happened. They just want to know, oh look, this address touched a dark web address 3 years ago. We want to know about it. But they don’t, they don’t need that chronological kind of layout like I do in my work generally. That’s why I’ve stuck with C.L.U.E.

Moish Peltz [00:10:49]:
over the years. No, I was going to ask, you know, we’ve also served as co-counsel to matrimonial counsel in the divorce context. And it’s a super interesting— I’m sure you’ve seen some. I don’t know. I feel like I, for me, doing mostly commercial work, to step into a divorce courtroom was a bit eye-opening and much more personal. Dispute than I expected. But one of the things that I don’t think I expected to the degree of, and I’m wondering how you confront this, is the suspicion from specifically in divorce, but I don’t think it’s just divorce, of proving the negative of, all right, you must have $100 million in Bitcoin somewhere because you talk about Bitcoin all the time. And then the other person says, no, I only have X dollars.

Moish Peltz [00:11:42]:
And and then it’s like, well, we come to Mark and we say, Mark, I think he has $100 million. Where is it?

Mark DiMichael [00:11:49]:
How do you solve that problem? Yeah, I guess using the techniques I kind of just described, it’s harder if they’re mining. That makes it harder because there’s no on-ramp I can kind of latch onto. If they’re taking payment in crypto for like goods or services, that’s the kind of thing that’s harder. But for the most part, If we’re talking about divorce cases, there’s usually that record there of, at least I can start with the bank accounts and that gets me a starting point. For other types of cases, like if it’s a hacking or a fraud, like an online romance scam, sometimes we get hired for those. I usually try and talk the clients out of it, ’cause I tell them, the likelihood of recovery is very low. I’ve done some of those cases. We trace the coins, they go to some exchange in Vietnam.

Mark DiMichael [00:12:46]:
We can’t subpoena records. It’s game over. The odds of recovery are so low. If you are scammed by someone you don’t know, the odds, it’s just not gonna happen. The times we could recover assets in those cases, they’re often, sometimes they sent money to a US bank account that was supposed, they say, “Oh, it’s a crypto investment. I send my dollars to this bank.” they send it to a US bank and then it goes overseas. Sometimes I’ve had instances where, oh, we could freeze that account. There’s some money left in there from probably some other investor where you can kind of freeze money and get some recovery that way.

Mark DiMichael [00:13:23]:
But the crypto’s just, there’s no way to, it’s not really freezable for the most part. Although I have heard of some instances where like USDT gets frozen on-chain with the help of law enforcement. It’s usually, too far gone by the time you get to it.

Moish Peltz [00:13:39]:
Yeah, we’ve had similar experiences where we get inquiries all the time for scams and fraud and romance scams and pig butchering related and take the same approach as you is like there’s a very small percentage chance here and your money might be just spending good money after bad. Right. And so that’s, it’s always a hard conversation to have, but we have had successes. It sounds like just have you and typically with law enforcement involvement where they have just more resources and power and they’re working on multiple cases where they might find, you know, some access of a larger scheme and can track it down overseas, things like that.

Mark DiMichael [00:14:24]:
So, right. They could potentially get records overseas, whereas a civil case, it’s, it’s all, I You would know better. You two lawyers would know better than me. I just don’t think you have the jurisdiction. Is that the issue?

Moish Peltz [00:14:37]:
I think essentially, yeah. I mean, if you’re dealing with an exchange like you mentioned, like, oh, they’re in Vietnam and they’re just not going to comply, it’s like, well, go after them. It’s like, well, you got to go to Vietnam to do that. So it makes it harder, just practically speaking, and it makes it significantly more expensive. And unless you’re talking about a romance scam where someone’s lost You know, because the other problem is like someone loses $3 million and that’s their entire net worth. It’s like, well, now you got to spend another half million dollars to go after it. It’s like, well, no, I just lost my net worth. I don’t have the money to go right into it deeper.

Mark DiMichael [00:15:12]:
So, right. I’m curious, do you think that would ever change? Like, I feel like the world is smaller than it used to be. Uh, international trade and transactions happen more often. These scams are happening all the time. Do you think maybe these governments will cooperate with each other more in information sharing?

Moish Peltz [00:15:31]:
Do you think that’s on the horizon? I think they will and they are. And I think you’re seeing like, I mean, it’s probably more focused right now on like tax information sharing and making sure people aren’t cheating on their taxes, which is probably another conversation we could talk about later in the show. But I feel like, yes, there is more international coordination amongst the countries. And I think there’s standard setting as to what what the exchanges should do and how they should respond to these. I think just fundamentally the problem is like the bad actors are always going to navigate to the weakest jurisdictions where the standards are not being complied with. And so I think unless you really have global compliance, which I don’t think is, you know, I don’t think that’s going to happen. I think it’s practical. There’s, there’s, I think there’s just going to be leaks and there’s going to be places where people know they can escape to and maybe that narrows the problem for this situation, but I think that’s probably a long time coming.

Kyle Lawrence [00:16:31]:
Right.

Moish Peltz [00:16:31]:
Right.

Kyle Lawrence [00:16:31]:
But with which our government moves, we talked about it on a prior episode about how the US government created a task force and one of its charges was one year from now, give us a summary of your findings of how these scams operate and what can we do to mitigate them. And a year from now, it may as well be 1,000 years from now. It just be because of where are we going to be a year from now? We can’t even project it. So what the scams are going to look like, and Moish is exactly right, as he often is, where the scammers, I mean, they can see what’s going on. They can see the new tactics that are being used by these regulatory bodies and the enforcement agencies, and they’re just going to pivot to something that works. So it’s tough to catch up to them and stay ahead of them.

Mark DiMichael [00:17:13]:
Right. Well, the governments and everything, the government, it’s in the light. It’s inherently that we want that. We want transparency from our government. And the criminal activities are happening in the dark and they want that as well. So it’s just harder to see in the dark.

Kyle Lawrence [00:17:29]:
But if we can sort of loop this back to your specific practice, when you talk about obfuscation and hiding assets and the efforts that people take, especially in divorce, which, you know, when we get these calls, it’s people been scammed, it’s pig butchering in the dating scams, but you’re dealing with people’s divorces. It’s a much different conversation and a much more personal one than, you know, the ones we have. But what are the 3 top tactics you see people employing, you know, mixing and coin joins and chain hopping and, you know, wash trading and privacy stuff? What do you see the most out there in your practice?

Mark DiMichael [00:18:08]:
Well, I would say, I mean, I’ve seen some, some money going to mixing services and whatnot, in which case you’re right, we can’t trace through mixing services. There are some like theoretical ways to do it, but it can vary by the mixer, and usually it’s just not even worth the effort even if you could. In something like a divorce case, there’s often another asset you can grab onto, you know, though this Bitcoin just went to an overseas exchange, the spouse can’t explain it, I’ll quantify the numbers for the court, say, look, this— it was 2 Bitcoin, that would be worth X today, whatever that is. And then, then it’s up to the judge to do something with that, right? Yeah, as yesterday. So that’s, that’s often it would— if it’s— if it goes to a mixer, you really can’t follow it any further. Um, I do see a lot of— see, I don’t know, sometimes I don’t know if it’s them intentionally trying to hide it or it’s just the nature of the blockchain. If you do a lot of decentralized, like DeFi-type trades, it makes the trail a lot harder to follow. Something like Uniswap, where the coins leave your wallet and come right back into the same wallet, really easy.

Mark DiMichael [00:19:17]:
There’s nothing to do. The coins are still in the same place. But if it’s something like, what’s it called, like Changelly, where you send money out of your Bitcoin wallet and then it appears in your Ethereum wallet somewhere, you know, that will often just, it’s like hard to detect unless your block explorer handles both of those things and you can kind of match it up in both wallets essentially. So that, that’s a tough one when they chain hop with a decentralized exchange. Um, I haven’t seen much efforts to hide things with privacy coins, uh, but that, that’s another— that’s going to be as about as effective as a mixer service that you can’t trace for the most part through privacy coins, um, if it went into Monero or something like that. And that’s an area that’s really been growing the past year. I, I know everything’s down right now, as you said, but during 2025, Bitcoin was basically flat, but the top privacy coins— Monero, I think, was triple in value during the year 2025, and Zcash was even more. Zcash went from Yeah, maybe coin number 100 on the market cap and to the top 20 in there.

Mark DiMichael [00:20:32]:
So those have, I think, really been a story of growth that I find to be an interesting area. But it is hard to, you know, incorporate privacy coins into your accounting business or investigation business just because the nature of what they are. But from a personal standpoint, I find it interesting. It sort of aligns with what I was talking about before. Privacy of a transaction and how our financial system should work.

Kyle Lawrence [00:20:55]:
I was going to say, talking about the subpoena question, just because we talk about subpoenaing an exchange in the Philippines or wherever, and you’re not going to get very far with that, but have you had success subpoenaing records from Kraken or Gemini or some of the ones over here or not really?

Mark DiMichael [00:21:11]:
Oh, absolutely. All the US-based exchanges, they respond to subpoenas. Sometimes there’s some back and forth. But nothing out of the ordinary. You could have some back and forth with Bank of America if the subpoena is not laid out right, or they have follow-up questions or something like that. So yeah, any US-based exchange, it’s no problem. Foreign exchanges, sometimes they have like a US office, but it’s not really my area of expertise. But I have gotten like Binance records, but I think they were Binance US.

Mark DiMichael [00:21:44]:
And there was time, there was a time I got actual Binance records, but I don’t even know how the attorney did it. It’s kind of not my area. I go to the attorney and they bring me back records or they don’t.

Kyle Lawrence [00:21:55]:
I was going to ask Moish about that.

Moish Peltz [00:22:00]:
Yeah. Well, no, it’s a really good point, which is, you know, we rely really heavily on our investigators, our tracing team to here are the documents we have, here are the tools that you have, go tell us what’s on the blockchain or match off on-chain and off-chain records and tell us what other records we need to complete that picture. So it’s definitely a relationship where we’re relying on each other to work together to try and help put together this often really complicated picture of really diverse data sources. And then, you know, I guess I’m curious what your experience has been at that point, right? You’re trying to take all these different data sources, compile them, investigate, put them together, make them make sense. But then from there, put them into English and explain them to, you know, perhaps an attorney that isn’t as fluent with blockchain. Or opposing counsel or, you know, a spouse or, or ultimately a judge. And there’s obviously a huge disparity in people’s knowledge of what crypto is and how it works and how easy it is to trace it versus hide assets through it. And so what’s your experience been trying to communicate these, you know, admittedly somewhat opaque topics to, to less blockchain-fluent individuals?

Mark DiMichael [00:23:34]:
Yeah, absolutely. I, I feel like I’ve done a good job of that over the years. I’ve just got a lot of practice because I was one of the early, you know, people who knew about this technology in 2018. So I taught a CPE class for my firm, I taught CLE classes for the New York State Bar, the New York City Bar, the Westchester Bar, the Brooklyn Bar. I went to all the local legal associations and just got more and more practice explaining these concepts to people who knew nothing about cryptocurrency. So definitely it’s a skill that was learned and refined and improved over time. The thing that I find helps the most is tying it back to things that they know. So I’ll often describe the way we trace Bitcoin on the blockchain with the change addresses.

Mark DiMichael [00:24:21]:
I don’t know if you’re familiar with that concept. But I kind of describe it like buying groceries at the grocery store. You pay with a $20 bill. You can’t rip the $20 bill in half and give them half of it. You give them a $20 and they give you back $5. I use analogies like that to tie it back to things they know and understand, other financial concepts they’ve grasped in the past.

Kyle Lawrence [00:24:44]:
I find that helps. Yeah, that’s a great approach. Part of the mission of the show and part of what Moish and I do just as our day-to-day practice is that education concept. And I feel as we’ve become more experienced in the space and as the space has matured, so has our ability to explain really complicated things in a simple manner. I’m patting ourselves on the back. I’m supposed to be plugging you. I’m plugging ourselves. Shouldn’t do that.

Kyle Lawrence [00:25:08]:
But it’s true. And we’ve presented together. And, you know, with what you do, I’m not a numbers guy. Accounting to me, and I feel like I have a decent understanding of it, is you may as well be speaking Greek. So I find it really impressive, which is good. You’re very welcome. And we have one coming up, which I think we can plug separately if we will. Oh, that’s right.

Mark DiMichael [00:25:29]:
I don’t know if we can or can’t.

Kyle Lawrence [00:25:31]:
Well, next Friday, I want to say. Yeah, it is. That’s right. It is on the 20th. But when people come to you, it’s a great segue. Thank you. When people come to you, your new clients, and they say, I have a ton of crypto here, help me with my taxes. Where do you begin? Because we’ve spoken to different accountants about this and there’s different service providers who help with this.

Kyle Lawrence [00:25:57]:
But it’s one thing if somebody just has some Bitcoin, you know, in their account and whatever, that’s easy. But if you have some real degen people who are traders and I don’t know who I could possibly be talking about and they have tens of thousands of transactions, where do you even start? What do you tell them and what is their expectation in terms of what tax they have to pay? To pay.

Mark DiMichael [00:26:15]:
I’m really interested in doing that. Right, right. Yeah, a lot of times they’re not quite understanding exactly how, how it works. How— oh, I put it all in crypto, I never take any money out, I never take any dollars out, so I’m not taxed. And no, that’s not, not the way it works. Um, we, for the most part, I have an accounting software we’re using. Sum is the main accounting software we use. I’ll plug their wallets, plug their exchange API keys into the program, it starts pulling down the transactions.

Mark DiMichael [00:26:47]:
The programs have improved drastically over the past, I’m gonna say 5 years, let’s say 5 or 6 years. We used to use something called Cointracking.info, which was one of like the early ones along with like Lucca and BitcoinTax. But in 2017, it was a good program. And then eventually it just wasn’t anymore. So we’ve migrated to other programs. We will sometimes use whatever our clients are using or want us to use, ’cause they may have something set up already, but for the most part, we try and use that particular program. But I do have, there’s been a number of times, like you said, where the transactions are overwhelming. I’d say the programs can handle mildly overwhelming or overwhelming transactions, but then we’ve sometimes come across clients where they have 60,000 trades a year, or 60,000 trades a day, in which case we need to migrate.

Mark DiMichael [00:27:45]:
Then I kind of take it back lower tech. We go back into Excel. The way it works is if you, you know, when you sell a coin and then buy some other coin, your basis kind of resets. So, you know, if I bought Bitcoin for $1,000 and now it’s $75,000, I still have that old basis. That’s where I can kind of save. On taxes because I didn’t sell the Bitcoin yet. But these folks who are doing 60,000 trades a day, these arbitrage-type individuals, I know that their basis and their fair market value is about the same because they didn’t buy anything 6 months ago or 6 years ago. So what I’ll do is I’ll, I’ll sort of isolate the wallets they do arbitrage in, and those wallets I kind of keep track on a on a mark-to-market basis.

Mark DiMichael [00:28:37]:
Like, did they make money or did they lose money? And that’s— I’ll flow that into my calculations because it’s impractical to give the government a 60, you know, 6 million row spreadsheet.

Kyle Lawrence [00:28:49]:
They just would choke on the data. You should, though. They deserve it. I mean, I would think—

Moish Peltz [00:28:56]:
I would think—

Kyle Lawrence [00:28:57]:
in a banker’s box, here you go.

Mark DiMichael [00:28:59]:
Right here you go. Thanks. Oh, you know, one of my clients— I think I was not exaggerating on that 60,000 trades a day number. One— one of my clients, I think, is like one of the top traders on Coinbase as far as volume goes. I don’t know what his 1099-DA form is going to look like because it’s supposed to be one page per trade, basically, that form.

Moish Peltz [00:29:21]:
It’s—

Mark DiMichael [00:29:22]:
oh my God, he’s going to need— they’re going to need to send him a hard drive.

Kyle Lawrence [00:29:25]:
That’s horrible. But I would imagine— I’ve heard this anecdotally— in spite of the rollbacks at the IRS and reduction in staff, I would think, and I’ve heard this from other people, that even the IRS tracking tools have also improved dramatically. So just the idea that the IRS is ill-equipped, maybe a couple of years ago they were, to properly trace these things, now that’s not the case or is becoming less so the case.

Mark DiMichael [00:29:49]:
Is that your experience as well? Yeah. Oh yes, they’re using the same tools as me. I do know they did an RFP for, for some, which used to be called Crypto Tax Calculator, and they sent one to Aldi. The crypto accounting softwares and they all bid on that IRS work. They’re using this and same with they’re using Chainalysis. They were using Chainalysis before private sector folks like me were using Chainalysis. So yeah, they’re using all the same tools we use.

Kyle Lawrence [00:30:14]:
They’re very much up to speed on this. Well, since you mentioned the 1099-DA, which as of this year is now in full force, what should tax advisors and custodians, you know, what should they focus on first with this new form that’s going to be? Is it customer data, cost basis, transaction classification? I’m just curious as to where you— what your thinking is and what your experience is in advising people.

Mark DiMichael [00:30:40]:
Yeah, absolutely. So yeah, for your audience, if they’re not aware, those 1099-DA forms, you should be getting them in a week or two if you haven’t already gotten them. As of this year, they’ll only have your proceeds from sale. They should not have your cost basis on them yet. So if you were hoping to use that form to figure out what you owe, it’s not going to do it. Maybe next year, depending on how you trade, but maybe not. Like if you’re staking and earning income staking or— Yeah, you receive crypto as payment for goods or services. The exchange is not going to have your basis if you transfer coins from an exchange to a wallet.

Mark DiMichael [00:31:23]:
Back to another exchange, they’re not going to know your basis. And there’s no one going to be reporting your basis to them. Theoretically, eventually, if you go like Coinbase to Gemini, that would be transferred. But if you put a wallet there in the middle, your basis isn’t getting reported there either. So there’s going to be some problems, I think, next year where the IRS thinks the basis is X and it’s really X plus 10 or something like that. So That I think will be more of a problem. This year the main thing to do is you’re only going to have your proceeds. So we’re going to be essentially, let’s say we get a package of 200 1099-DA pages from Coinbase.

Mark DiMichael [00:32:05]:
I’m going to extract the total proceeds. That’s the number I got to get to. I then go back to my coin tracking program and I should have total proceeds. Our program doesn’t have this yet. They’re building it in. I think it’s getting added this week. It’s going to say where it was sold. On the gains report.

Mark DiMichael [00:32:24]:
It doesn’t— it’s in the system, obviously, but it’s not in the gains report. It’s getting added this week. I’m going to make sure my total Coinbase sales equal my total Coinbase 1099-DA or thereabouts, because they may have slightly different valuation methodologies. If I’m within a couple percentage points margin of error, I’m done. We got good numbers. We’ll, we’ll go file the tax return. That’s my main idea. The only quirk is, you know, there’s also like a box you need to check because some, you know, if, if I have a client selling on Uniswap and Coinbase and Changelly and maybe some private sales, the Coinbase stuff’s going to be on a 1099-DA and the other stuff is not.

Mark DiMichael [00:33:07]:
So there’s— I need to file two separate pages with two separate boxes checked.

Kyle Lawrence [00:33:14]:
So when the IRS when you, when you have an exorbitant tax bill because of that, or if you try to underreport or overreport what your basis is to minimize the delta, what would you— how, what recordkeeping would you need to have in order to fight that or dispute that? Is it simply just the transaction hash or what? You know, it’s like, where would you begin to fight that?

Mark DiMichael [00:33:38]:
Well, it’s more their job to fight you on it if they, if they think you’re wrong in some way. If you have good accounting records, you should be okay. Uh, there’s— I don’t know if we want to go into FIFO versus HIFO. Have you had that discussion with people? I certainly haven’t.

Moish Peltz [00:33:56]:
Okay, so we have not, we have not had it on the show, but I think we should go there.

Mark DiMichael [00:33:59]:
Yeah, yeah, I think we should do it. I don’t know how interesting it would be for the audience, but I’ll try and cover it quickly. —to hell with what everybody else wants. Yeah. So if I bought Bitcoin, you know, let’s say I bought 1 Bitcoin a year for the past 5 years, and now I have 5 Bitcoin in a wallet. Do I— if I sell 2 Bitcoin, which Bitcoin did I sell? Did I sell the first ones, the ones that are the most tax beneficial to me? That would be the highest basis coins. That’s sometimes called HIFO. So FIFO is first in, first out.

Mark DiMichael [00:34:34]:
HIFO is highest in first out. The accounting programs have been pushing HIFO, saying, look, our program lets you save on your taxes. That’s how they’re branding HIFO, and they’ve been doing this for years. They say, we offer HIFO, you should use our program. It’s branding. The IRS came out, and I never thought HIFO would fly. It Technically, if you have a brokerage account and you have different lots of stock, you’re supposed to tell your broker which lot you sold. That’s been the rule for 30— forever.

Mark DiMichael [00:35:10]:
I don’t even know how long. With crypto, these accounting programs just kind of assumed you didn’t need to do that. The IRS—

Moish Peltz [00:35:18]:
so they’re just doing some magic hand waving, even if the actual Bitcoin that you bought in 2017, what was the one that you sold, and they have that low basis, the software says no, we’re just treating it as if it was the HIFO?

Mark DiMichael [00:35:32]:
Correct. Even if it’s on a different exchange, that was what they were doing. So the IRS said, okay, no more of this. Starting in 2025, you have to go wallet by wallet. So you can’t say, if you sell your Coinbase-purchased coin, you can’t say I’m selling my Binance-purchased coin that’s on a different— you can’t do that anymore. Yeah, you probably never should have, but people are doing it. So that’s one. They said you can’t use the universal method.

Mark DiMichael [00:36:01]:
And they also said if you’re going to use HIFO, you need to inform your broker, just like we talked about with stocks. So with Coinbase, you can inform your broker. You’re required to start doing that next year. Um, if you’re selling on Uniswap, there’s no broker to inform.

Moish Peltz [00:36:23]:
It’s a software program.

Mark DiMichael [00:36:24]:
Yeah, I was going to say, if you just have a cold wallet and you’re swapping, you’re right. So the IRS said the way you document that, since there’s no broker to inform, is you need to mark it down in your accounting program at or before the time of sale. You need to mark down which coin you were selling. So for that example, the 5 different Bitcoin purchased in 5 different years. If I select the HIFO setting on the accounting software and I update the accounting software regularly, that is supposed to protect me from the IRS claiming that I didn’t elect the coin on a timely manner. If a client tries to, I have had some clients say, oh well, you know, I want to use that HIFO method. Oh, and I haven’t filed in 3 years. That just clearly doesn’t fly anymore because they clearly didn’t make that election at the time.

Mark DiMichael [00:37:17]:
But if you’re doing your accounting records and, you know, have one of these programs automatically pulling transactions off the chain, that should protect you from the IRS’s claim that you didn’t make the right election.

Moish Peltz [00:37:29]:
Makes me feel like I should just start trading from like within my accounting app versus Coinbase.

Mark DiMichael [00:37:37]:
Probably. Oh yeah, I make sure when I’m— I don’t trade that much of my own, you know, assets, but when I do, I make sure to periodically at least make sure I’m updating that because it can get unwieldy when you’re catching up in multiple years and you don’t remember what you did several years ago.

Moish Peltz [00:37:54]:
When clients got extension and it’s October and you’re thinking of a trade that happened a year and a half before, yeah, I don’t know, you probably didn’t care in the first place.

Kyle Lawrence [00:38:04]:
But it reminds me a lot of what we used to flippantly joke about was the end of 2022 and nobody reported their gains. But after 2023, everyone tried to report all their losses.

Mark DiMichael [00:38:18]:
Yeah, that’s a problem. Exactly. Yeah. Yep. I’ve still got clients taking NFT losses this year, burning NFTs right now to liquidate, selling them. They bought it for $600. Now they sell it for $2.32.

Moish Peltz [00:38:32]:
And they get the tax loss. That’s, that’s what I do.

Mark DiMichael [00:38:37]:
I still got some more NFTs to sell, so.

Moish Peltz [00:38:41]:
Oh, you’re still burning?

Mark DiMichael [00:38:41]:
Yeah, I was doing this too. Yeah, I, I missed the NFT craze luckily. Oh, they’re coming back? I don’t think so. I could see the ones that I’m gonna sell. Yeah, I mean, the concept— I mean, you— and the NFT concept could be the basis behind like tokenized assets, tokenized gold, tokenized precious gems. I think that has legs to it, but the digital art has been unpopular for a few years now.

Kyle Lawrence [00:39:15]:
Well, funny, Moish and I just yesterday released an article on tokenization. One of the points we made was think of NFTs, but it’s an actual asset that it symbolizes.

Mark DiMichael [00:39:24]:
It’s it’s also fungible, but it’s a thing, not that. Right. Oh, and real property too. I think that’s an area that—

Kyle Lawrence [00:39:36]:
I mean, it’s coming whether people like it or understand it or not, it’s all happening.

Mark DiMichael [00:39:42]:
Right, right. No, I mean, ’cause to me, that’s the amount of effort involved in transferring real property from one person to another it’s a lot. And if you can theoretically do that or just do that in a tokenized way, even if you’re like passing it to a family member, that’s even easier. Like, oh, I’m giving it to my daughter. I just hit send on my wallet then, theoretically. That’s the idea. I think that’s an exciting possibility.

Kyle Lawrence [00:40:09]:
One of my life’s greatest joys, and it happens every time when I’m at a conference and people are talking about, you know, what is blockchain technology good for? For it. And I preface what I say with, are there any title insurance people in the room? And invariably there’s one or two. So you’re not going to like what I’m going to say. And I tell them, I say, blockchain is going to make you useless and meaningless. And quite frankly, you have no place in the chain. All you do is clog it up and charge fees. And there’s no assurances that what you’re telling us is correct anyway. Blockchain is correct, and I don’t have to pay thousands of dollars for a title policy or tip the $300 title person at closing, everything is better.

Kyle Lawrence [00:40:47]:
So I’m right there with you. And I hate those people. And we could, we could short that. I don’t care.

Mark DiMichael [00:40:54]:
Let’s put it out there. Yeah, that’s one. And the, the one that I’m kind of curious where it’s going next is these treasury companies, the DATCOs. Yeah. I—

Kyle Lawrence [00:41:05]:
they have not been performing well. At all.

Moish Peltz [00:41:10]:
Strategy is having a rough week.

Mark DiMichael [00:41:12]:
You know, but like Tom Lee’s having a rough week too. Yeah. I mean, from a consulting standpoint, for my firm, we’ve gotten a decent amount of work in that area. We’ve gotten a few clients where they’re big public companies. They need a lot of help. Have you guys come across work from the dat co side of things?

Kyle Lawrence [00:41:30]:
Oh, for sure. Yeah. And what’ll be really interesting is when the market turns, that’s when the knives come out and all of the shareholders will come over and say, hey, we didn’t actually agree to this or we didn’t vote. The vote was improper. And all of the corporate governance things that our clients, and I’m sure your clients and most entities take for granted where you don’t have the proper corporate management guardrails, you didn’t do the written consent, you didn’t provide the shareholders or your fellow board members with the appropriate information. When things like this happen, like Strategy’s kind of an outlier. They’re a unicorn with this. Like they’ll probably Probably be okay, but you know, they own like 4% of all Bitcoin.

Kyle Lawrence [00:42:09]:
It’s crazy. But you think of the smaller companies who were encouraged in part by guys like us, who were like, you have all this cash sitting on your balance sheet, put it into Bitcoin, put it into something else so it has price appreciation. You know, those people are going to get railroaded. I mean, that’s a problem for them. They can fall out of their LTV ratios on their bank covenants because of stuff like that.

Mark DiMichael [00:42:29]:
Right, right. Yeah, I think I was reading that there’s over 200 companies that— public companies now that have digital assets on their balance sheet in some way, shape, or form. A few years ago, that was a handful. Yeah, it was a pipe dream. Yeah, really. But these— a lot of these companies are new to handling digital assets. Like, oh, we were a software company before and now we’re digital assets. We were a retailer before, now we’re digital assets.

Mark DiMichael [00:42:55]:
They don’t have the policies and procedures in place. They don’t know about the accounting for it. So they really need a lot of advisory services. So we’ve picked up a few of those sort of helping out in the transition, just because management is sometimes finding themselves outmatched.

Moish Peltz [00:43:09]:
Well, I think that’s where you’re going to see now with this market shakeout, you know, a bit more differentiation of companies like Strategy where I think, you know, Saylor understands the economics here. And even if they’re underwater, I assume they’re thinking about it defensively and strategically, whereas I think some of the companies I’m concerned about are the ones that were following the pack. And now that things are a bit more chaotic, might not know like the natural next— and that’s where you see like a lot of forced selling and a lot of concerns in the market right now. And I’m sure that’s going to cause quite a bit of damage for folks like you on the accounting side and ultimately litigation and forensic side of who was doing what, why, and was that proper?

Mark DiMichael [00:44:02]:
And I’m sure there’s going to be a lot of litigation around companies that may have failed or may fail in the future. Yeah, it’s not a proven business strategy yet by any means. I mean, it’s a very new concept. Even MicroStrategy was only doing it for for 5 years now. But all the companies that are doing this, they’re kind of flush with cash. Even if they’re down, it was— they were issuing equity to get this, so it was kind of free money for them. So it’s not an immediate liquidity problem, but you’re right, if that does come to a head down the road and these companies do start failing down the road as they burn through more and more of depreciated tokens right now., it could be a lot of litigation.

Moish Peltz [00:44:46]:
Right. I think it’s probably a better time for someone to start their, their debt now with a 50% discount on, on their assets than, you know, there were, there were a lot that were launching when, when Bitcoin was at its all-time high and like, you know, the $120s and, uh, now they’re underwater and it’s, it’s just, it’s just a new business model. And you’re right, there hasn’t been enough time that’s run on it. And even if a lot of them were purchasing with with money that was sourced from equity. So there’s not like a huge debt load that is now bearing on them.

Mark DiMichael [00:45:17]:
It’s still, I think, a concerning situation for the ecosystem that was entirely predictable. And it can vary so much. I mean, some of these DAPPs are Bitcoin, some are Ethereum, but others are much further down the chain. And so some of these stocks are really getting hammered right now. Volatility, right? Yeah, yeah. Um, how— I’m kind of curious because you’re talking about the corporate governance issue of that. I guess it’s something you’d normally have the board would vote on that, or how’s it supposed to go if you were— if the— it’s a public company, I gotta think it’s the board would vote and then management does it, or is it sometimes the other way around?

Kyle Lawrence [00:45:59]:
No, it’s definitely a board vote. You want to think about what requires a board board vote is basically anything that’s outside the ordinary course of business. The strategy is a unique case because what is their ordinary course of business? An easier example is a law firm. You know, if a law firm is in the business of practicing law, but it wants to put some of its cash into Bitcoin or whatever else, it needs to have a vote of its board, of its managing partners and whatever it may be. And if it doesn’t do that and somebody just does it, some of the other owners can be like, hey, you know, what are you doing? It’s a breach of fiduciary duty. It’s withholding information. It could be corporate waste, fraud. I mean, go down the list of things you could claim.

Kyle Lawrence [00:46:41]:
And some of the companies, I mean, look, I’ve been doing this 20 years. I’ve had a lot of companies from small pizza shops to multinational, you know, corporations with offices all over the world and, you know, do hundreds of millions of dollars in revenues. And they all make the same mistake. They just think it’s like, well, I’m the CEO, I can do whatever I want. And I say, well, no, there are rules. Don’t be mad at me. I didn’t create the rules. I’m just here to tell you what you have to do.

Kyle Lawrence [00:47:08]:
And by and large, most companies, it’s not because they’re bad people. It’s I didn’t, you know, I am the board. I’m the sole director. I’m also the CEO. Do you have a written consent saying I, the board, approves of this? I recommend the shareholders also approve it. And then, and so on and so forth. And the majority of the time, people don’t do that. Again, it’s not because they’re bad, they just, they don’t think of it.

Kyle Lawrence [00:47:30]:
And I do think that where the chickens come home to roost is when something like this happens. When, yeah, you put your money into Bitcoin, you didn’t tell me, well, I don’t care. But now I care because it got cut in half. And now we’re, you know, we have half the money that we had a couple of weeks ago.

Mark DiMichael [00:47:44]:
So I’m sure you’ll start seeing some of those actions come out. Yeah, I’m sure even if there was a board vote, they might say, well, it wasn’t disclosed the right way or things along those lines.

Kyle Lawrence [00:47:55]:
You didn’t tell me it was risky. I’m going to sue you. That’s always the one, like from a security standpoint, because you write a private placement memorandum. I’m on my soapbox. You write a private placement memorandum and there’s 40 pages of risks as to why you as the investor shouldn’t do this. And no one reads it until the deal goes sideways and they’re they read it and they say, oh, you didn’t, you didn’t tell me that, that the moon could crash into the Earth and destroy the planet, thereby reducing my investment to zero. Therefore, I’m suing you. Like, these are the things people come up with when they lose their money, right?

Mark DiMichael [00:48:27]:
Right. Okay, so we got to get ahead of this, Moisture. I think we need to do some thought leadership on DATCO litigations. It seems like that could be something that could— I mean, You never— there could be a turnaround. Fortunes are won and lost in this business, in this industry, so quickly. Um, could turn around, but you’re right, the way it’s going—

Moish Peltz [00:48:51]:
look, I, I don’t, I don’t think— I think everything could be peachy and roses and everything appreciates back to all-time highs like in March, and that’s great. I still think the litigation is going to come because that’s just the way these industries work. And so if you have, you know, just small-cap stocks in any industry that are doing all this pipe and equity raising and whatever else, like there’s going inevitably to be litigation. And then you put on top of that the concept that there’s 50% swings in asset values and the volatility and everything else that goes with it. And, you know, not to mention, you know, people getting scammed and custody issues and all the sorts of fun things that crypto brings to the mix. I just— we know We know, we know, because we went through 2022 and 2023 of FTX and Celsius and Voyager and all these fun cases that are still pending. And, and it doesn’t, it doesn’t need a bankruptcy for, for those litigations to pop out. So I’m with you.

Moish Peltz [00:49:52]:
I hope this all gets smoothed over and everyone, you know, comes open to a new day with, with, you know, unscathed. I just think the realist in me says we’re in for a lot of litigation, if not in this moment, in the near future.

Mark DiMichael [00:50:08]:
Right, right. And I’ve got a CPE presentation that’s— it’s a 1-hour CPE or CLE that’s on digital asset losses. How do you claim your losses? Can you call it a casualty loss? Can you call it a theft loss? What if you lose your keys? What if you’re hacked? I kind of go into all of that. It’s such a rich area for advice. And it came in handy a few years ago. And you’re right, it’s going to come again, come in handy again soon.

Moish Peltz [00:50:34]:
But every 5 years you need to dust it off and bring it back out. I mean, until it’s this really interesting point in crypto where, you know, this is almost the institutional cycle of crypto, right? As you have Fidelity and BlackRock and, you know, JPMorgan and everyone’s getting into crypto, everyone’s in the blockchain now. It’s like, oh, so I guess we’re immune to volatility. Like, no, that’s not how it works. So, you know, here we are. People are learning that lesson again. It’s another point of the cycle. And so, yeah, you’re going to need to dust off the claiming your losses playbook.

Mark DiMichael [00:51:10]:
And that would be a great place to start for all the listeners out there. Right. Yeah. I’ve still got clients that are waiting for payouts from FTX and other bankruptcies and whatnot. You can’t even deduct those losses because you don’t know how much you lost yet. Are you going to get 10 cents on the dollar? Are you going to get 40 cents on the dollar? Who knows?

Moish Peltz [00:51:29]:
You can’t deduct it until you know. Yeah. They might get 100 cents on the dollar because if it’s fixed in, you know, petition date prices and now, well, now as of last month everything was higher, but maybe now we’re back closer to petition date prices.

Mark DiMichael [00:51:47]:
Right. Yeah. The whole, the whole That’s such a crazy thing though. I mean, I had a Bitcoin. Why you’ve— I know the law says it, but it’s crazy. It was a Bitcoin. I want my Bitcoin back. I don’t want $3,000 or whatever that— oh, I— because it was worth $3,000 at the time of your bankruptcy.

Mark DiMichael [00:52:07]:
No, I, I want the thing back that I gave you.

Moish Peltz [00:52:11]:
That’s not what the bankruptcy code says. And that’s not what the bankruptcy judges have ruled. And that’s not what the tax code says. So, you know, we’re just going with what we got to go with.

Kyle Lawrence [00:52:21]:
That’s a source of contention. I’ve seen a lot of these types of matters where somebody loans, like, I need $500,000 and they denominate it in Bitcoin and then the price skyrockets. What do you owe back to the other person? And that’s been a big source of disputes.

Mark DiMichael [00:52:36]:
And we’ve had a few of those matters and those are Those are always fun. Oh yeah, that’s something I always need to iron out from a tax perspective too. I said, okay, you loan them a Bitcoin, what were they required to pay you back? If they’re required to pay you back 1 Bitcoin, that’s different than they’re required to pay you back the value of 1 Bitcoin at a certain point in time. Um, if it’s the value, some, you know, technically if you loan an asset, it’s arguable whether it’s triggers a tax at that point in time. There’s special exemptions for securities, but for crypto it’s not, not as clear. But if you loan a Bitcoin out and you say you got to pay me back $75,000 now, to me that’s a sale. I don’t see how you argue that it’s a loan anymore. You’ve, you’ve, you no longer are subject to the volatility of the price anymore.

Mark DiMichael [00:53:30]:
To me, you’ve You’ve effectively sold it and lent out $75,000.

Kyle Lawrence [00:53:35]:
Yeah. I mean, that’s depending on what side of the table I’m on.

Mark DiMichael [00:53:40]:
That’s the argument. Well, I would, I wouldn’t want to be on the other side there.

Kyle Lawrence [00:53:45]:
Well, listen, I go, I go where the money is. If somebody wants to retain me, I’ll argue whatever they want for the most part.

Mark DiMichael [00:53:54]:
Not everything. Yeah, no, I know you’re not a total hack.

Kyle Lawrence [00:53:57]:
I get it. You’re good. Always, only on the days that end in Y. Well, Mark, gracious with your time as we wind down this very special episode and, you know, at the onset of tax season, here you are giving up a full hour of your time. Any final thoughts out there for the viewers and listeners who are, you know, don’t know what to do or are terrified about paying taxes or are terrified that they’re going to get divorced and lose their shirt?

Mark DiMichael [00:54:23]:
Oh gosh, that’s too many things. We’ve talked about many, you know, so many different areas on this this podcast here. I’d say for the people who are worried about the taxes and the 1099s, if you’re behind on taxes, it only gets worse. Do something about it now. Your tax liability just gets worse. There’s interest, there’s penalties, there’s non-filing penalties, non-payment penalties. Both of those stack up and accrue at the same time. It only gets worse if you’re not caught up on your taxes.

Mark DiMichael [00:54:56]:
Get caught up and now’s the time to do it because you really can’t. If you’re going to cash out of your crypto at any point, you’re under this 1099-DA regime now. There’s no way, there’s no off-ramp from your non-payment of taxes. Clean it up now, I’d say. Yeah, that’s good. And then for divorces, I guess just don’t, don’t— there’s, that’s just a terrible situation. Don’t get divorced. Don’t get divorced.

Mark DiMichael [00:55:24]:
Make the right decision before you get married and then you’re much better off. But yeah, it’s just a bad situation. No matter whether there’s crypto involved or not, it’s just a messy situation.

Kyle Lawrence [00:55:36]:
Especially in New York. Yeah, it’s true. Well, Mark and Michael, we really appreciate your time and we look forward to having you on again, you know, as regs continue to come out and this industry continues to develop and you and and your team are at the forefront of it. We would love to take that journey with you side by side, and we can’t wait to have you back on.

Mark DiMichael [00:55:53]:
Thank you. Thank you for having me here. I appreciate it. Anytime.

Kyle Lawrence [00:55:57]:
Thank you, Mark. Take care. Well, that wraps up a very special tax season edition of Block Order. An extra special thank you to Mark and Michael for coming by. Please don’t forget to like and subscribe. Follow us on all our socials. Links are down below in the show notes. If you have any comments or questions, please leave a comment down below.

Kyle Lawrence [00:56:13]:
We do actually read them. Remember that nothing contained herein is meant to be construed as legal and/or financial advice, especially in this episode. If you’re going to take the plunge, please do your own research, consult your own representatives. Remember, none of the assets that we discuss on the show are meant to be endorsements of said assets. Please do your own research. Again, contact your own representatives. Very special thank you again, a lot of thank yous in this episode, to producer Abby. Without her, the show would not be possible.

Kyle Lawrence [00:56:38]:
So on behalf of Moishe Peltz, I’m Kyle Lawrence.

Moish Peltz [00:56:41]:
Keep fighting the good fight, everybody. See you next time.