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IRS deploys perjury-trap crypto audits as developers face prison

Thursday, March 26, 2026 · from 3 podcasts
TFTC: A Bitcoin PodcastWhat Bitcoin DidBitcoin And | Bitcoin & E…
  • The IRS is weaponizing a new two-page audit form, demanding a complete crypto transaction history under penalty of perjury, enabled by incoming 1099-DA exchange data.
  • Prosecutors are targeting privacy-focused Bitcoin wallet developers with money laundering charges, even after regulators confirm their activity is legal, setting a precedent to criminalize open-source tools.
  • A coordinated global push for financial surveillance under anti-money laundering pretexts is driving both aggressive tax enforcement and the criminalization of privacy-enhancing software.

The taxman is coming armed with a trap.

The IRS has deployed a new, aggressive audit questionnaire for crypto holders, demanding a full transaction history dating back to their first-ever purchase. Tax attorney Andrew Gordon explained on TFTC: A Bitcoin Podcast that the form must be signed under penalty of perjury, transforming honest accounting mistakes or forgotten transactions into potential felony charges. This enforcement push is supercharged by new 1099-DA data reporting from exchanges, which will give the agency automated, comprehensive insight into user activity.

Andrew Gordon, TFTC: A Bitcoin Podcast:

- It's a two-page form that they have to fill out. And it asks for all of the transaction history going back to when they first got into crypto.

- And they have to sign this form under penalty of perjury.

Parallel to this audit offensive, the Justice Department is criminalizing the development of privacy tools. Lauren Rodriguez detailed on What Bitcoin Did how FBI agents raided her home to arrest her husband, Keone, a co-founder of the non-custodial Samurai Wallet. Federal prosecutors pursued money laundering charges despite having received written guidance from FinCEN, Treasury’s own financial crimes unit, stating the wallet was not a regulated money service business because it never took custody of funds.

This legal attack establishes a precedent that building privacy-preserving Bitcoin software is a prosecutable act, regardless of existing regulatory clarity. The goal, Rodriguez argues, is not justice but winning - stifling innovation through fear.

These fronts are connected by a broader state objective: total financial visibility. As noted on Bitcoin And, regulatory crackdowns, like Canada’s mass revocation of crypto business licenses, use anti-money laundering rhetoric to justify sweeping surveillance. The underlying aim is control over digital commerce and ensuring the state gets its tax cut from every transaction.

The pincer movement is clear: one arm uses tax forms and exchange data to squeeze individuals, while the other uses felony charges to eliminate the tools that provide financial privacy. The war is not on crime, but on opacity.

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Entities Mentioned

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Source Intelligence

What each podcast actually said

TFTC: A Bitcoin Podcast
TFTC: A Bitcoin Podcast

Marty Bent

#731: Fixing Broken Bitcoin Tax Policy with Andrew Gordon • Mar 25

  • The IRS is implementing a new two-page crypto audit questionnaire requiring taxpayers to list every crypto transaction back to their first activity, with responses sworn under penalty of perjury.
  • Tax attorney Andrew Gordon describes the IRS's new crypto audit form as unprecedentedly aggressive in both its scope and the legal risk it imposes on filers.
  • Gordon argues the IRS is weaponizing the audit questionnaire by turning honest reporting mistakes or forgotten transactions into potential perjury traps for taxpayers.
  • A major catalyst for the IRS's enforcement push is new Form 1099-DA data, which crypto exchanges will soon be mandated to report directly to the agency.
  • Gordon frames the draconian audit form as a precursor to a coming wave of automated IRS audits, which will be heavily powered by artificial intelligence.
  • The IRS's move signals a broader regulatory enforcement strategy targeting the crypto space, shifting from guidance to direct, data-driven audit pressure.
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What Bitcoin Did
What Bitcoin Did

5 Years In Prison For Building A Bitcoin Wallet | Lauren Rodriguez • Mar 20

  • The founders of non-custodial Bitcoin wallet Samurai Wallet were charged with money laundering by the Southern District of New York despite FinCEN explicitly stating their service was not a regulated money transmitter.
  • Lauren Rodriguez argues prosecutors moved forward with the case against her husband knowing FinCEN's guidance, revealing a strategy based on winning convictions rather than truth or justice.
  • Rodriguez describes FBI agents conducting an armed pre-dawn raid on their Pittsburgh cottage, pointing lasers at them before handcuffing them and searching the property.
  • The Samurai Wallet case establishes a legal precedent that developers of privacy-focused Bitcoin tools can face federal prosecution even when operating non-custodial services.
  • Rodriguez warns the war on crypto is not over, signaling that building privacy-preserving tools with clear regulatory guidance can still lead to raids and prison sentences.
  • Samurai Wallet operated for nearly a decade on the Google Play Store without issue before the raid, offering privacy features like integrated Tor and a CoinJoin implementation called Whirlpool.
  • FinCEN had maintained clear guidance since 2013 that non-custodial wallet services do not qualify as money transmitters, a position it reaffirmed to prosecutors six months before the indictment.
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Bitcoin And | Bitcoin & Economic News
Bitcoin And | Bitcoin & Economic News

Canadian's Canadia | Bitcoin News • Mar 19

  • Canada's financial regulator FINTRAC has revoked 47 money service business licenses from crypto firms as part of a rapid enforcement wave, with government officials vowing continued monitoring and new measures targeting virtual currency businesses.
  • The host of Bitcoin And argues the regulatory crackdown under AML pretexts is not primarily about crime, but about establishing state surveillance and tax authority over all digital commerce.
  • Citing Chainalysis data showing less than 1% of crypto transactions are illicit, the host contrasts that with FATF estimates that 2-5% of global GDP is laundered through traditional finance, questioning the singular focus on crypto.
  • The host argues the expansion of AML and KYC obligations to social media platforms and Discord servers reveals a broader goal of total transactional visibility, not just targeting criminal enterprises.
  • The episode frames the simultaneous regulatory crackdown and corporate layoffs as two aspects of a system attempting to contain and co-opt a financial technology it fundamentally fears.

Also from this episode:

Markets (2)
  • Crypto.com cut 12% of its staff in what its CEO framed as an enterprise-wide pivot to AI, which the host interprets as a desperate narrative shift following the Bitcoin market downturn.
  • The host identifies a pattern where failing crypto companies rebrand to the hottest narrative, like AI, mirroring past pivots to Bitcoin mining or corporate treasury strategies during previous market cycles.
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