What happens if I don't report my cryptocurrency income to the IRS?

Not reporting cryptocurrency income to the IRS can result in serious consequences. The IRS treats crypto as property, requiring tax reporting on gains, mining rewards, and staking income. Penalties include back taxes plus interest (currently around 8% annually), accuracy-related penalties (20% of underpaid taxes), and potential fraud penalties up to 75%. Criminal prosecution is possible for deliberate evasion, potentially resulting in fines up to $250,000 and five years imprisonment. The IRS increasingly monitors crypto exchanges and has obtained data on millions of users. Even if you weren't caught immediately, the statute of limitations is typically six years (ten years for fraud). Filing amended returns can reduce penalties significantly. Consult a tax professional to understand your specific obligations.