The Cryptocurrency Reckoning of 2027: Cost Basis Reporting, IRS Enforcement, and Defending Clients When the First 1099-DA Mismatch Arrives

Evan J. Davis, Principal | Hochman Salkin Toscher Perez P.C

Evan J. Davis is a Principal at Hochman Salkin Toscher Perez P.C., where he represents cryptocurrency clients worldwide in civil and criminal tax matters and handles criminal tax investigations and prosecutions, civil tax controversies and complex examinations, Bank Secrecy Act matters, and unreported foreign account issues. Before joining the firm in 2016, he spent nearly two decades in federal government service, including as a civil trial attorney in the Department of Justice Tax Division and as an Assistant United States Attorney in the Central District of California, where he served in the Tax Division and the Major Frauds Section.

• Education & Credentials

Mr. Davis earned his J.D. from Cornell Law School, magna cum laude, where he was elected to the Order of the Coif, and his A.B. in Political Science, cum laude, from Colgate University. He is admitted to practice before the Supreme Court of California, the United States Supreme Court, the United States Court of Appeals for the Ninth Circuit, the United States District Courts for the Central, Eastern, Northern, and Southern Districts of California and the District of Colorado, and the United States Tax Court.

• Recognition & Leadership

Mr. Davis received the Attorney General’s Award for Distinguished Service in 2015, was recognized as an Outstanding Lawyer by the Department of Justice Tax Division in 2002, 2003, and 2004, and has received awards from the IRS, the FBI, and the United States Trustee Program. He was named a California Super Lawyer in 2022 and 2023 and is a Fellow of the American College of Tax Counsel.

• Professional Involvement

He is a member of the American Bar Association Section of Taxation, the State Bar of California Taxation Section, the Los Angeles County Bar Association Taxation Section, and the Beverly Hills Bar Association Taxation and Entertainment Sections. He serves as Chief Legal Officer of the InfraGard National Members Alliance and on the boards of Just the Beginning (Los Angeles Chapter) and the St. Thomas More Society.

• Experience

Mr. Davis speaks frequently on cryptocurrency and Bank Secrecy Act enforcement, including “Superman’s Krypto – IRS’s Focus on Civil and Criminal Enforcement of Cryptocurrency” at the UCLA 40th Tax Controversy Institute (2024), cryptocurrency tax compliance programs for CalCPA and Spidell, and an American Bar Association panel on charging cryptocurrency violations as tax crimes or money laundering, and he has testified before the Korean National Tax Services. He is a co-author of the BNA Tax Crimes Portfolio (4th ed., 2020) and wrote “Maintaining Privileges When Kovel Accountants Prepare Tax Returns” for Tax Notes (2018). He served as trial and appellate counsel in In re Grand Jury, a privilege case heard by the United States Supreme Court in 2023, was a coordinator for bankruptcy, financial institution, and securities fraud matters as a federal prosecutor, and was part of the team that obtained a $16 billion settlement from Bank of America in 2015.

Philipp Behrendt, Principal | Hochman Salkin Toscher Perez P.C

Philipp Behrendt is a Principal at Hochman Salkin Toscher Perez P.C., where he advises clients on civil and criminal tax controversies and specializes in the technical aspects of voluntary disclosures in connection with DeFi, NFTs, and other crypto assets. Admitted in both California and Germany, he counsels U.S. and international clients in global tax settings, cross-border investigations, and international money laundering investigations arising from tax avoidance structures.

• Education & Credentials

Mr. Behrendt earned an LL.M. from the University of Southern California Gould School of Law, an LL.M. in the White-Collar Crime Program at the University of Osnabrueck (Germany), and his law degree from the University of Greifswald (Germany). He is admitted to the State Bar of California and the German Bar.

• Recognition & Leadership

Mr. Behrendt serves as Chair of the Beverly Hills Bar Association Tax Section (2025) and as Vice-Chair of the American Bar Association’s Young Lawyer Leaders for Global Anti-Corruption Committee, a role he has held since 2019.

• Professional Involvement

He is a member of the American Bar Association, including its White-Collar Crime Division, and of the Beverly Hills Bar Association, and has appeared on ABA panels including a program on the impact of the Panama Papers.

• Experience

Mr. Behrendt’s recent speaking and writing center on cryptocurrency enforcement: he presented “An Update on Cryptocurrency Enforcement and Voluntary Disclosures” at the UCLA 39th Annual Tax Controversy Institute and “Cryptocurrency Tax Compliance” for CalCPA, and co-authored “A New IRS Voluntary Disclosure Program Is Coming — and Crypto Will Be Part of It” and “A Step Forward for Voluntary Disclosure” (2026). His earlier publications include “Taxation of Crypto Currency – the digital foreign currency account” (2018) and “Tax Evasion as a Predicate Offense for Money Laundering under German and US Law” (2020). Before joining the firm, he spent more than five years at a leading German tax firm representing wealthy individuals and companies in global tax matters, cross-border investigations, and audits, handled complex voluntary disclosure issues for U.S. and international companies, and represented clients in German tax and criminal courts.

SESSION 1 – The 2027 Tax Rule and the Enforcement Machine Behind It — What Brokers Now Report, What the IRS Will Match, and Where Clients Are Exposed | 12:00pm – 1:00pm

This session explains the reporting regime that will give the IRS standardized third-party basis information for cryptocurrency for the first time: the phased rollout of Form 1099-DA, from gross-proceeds reporting for 2025 sales to mandatory basis and acquisition-information reporting for 2026 sales of covered digital assets, and why pre-2026 or transferred-in cryptocurrency generally remains noncovered. Participants will examine the wallet-by-wallet basis rules of Treas. Reg. § 1.1012-1(j), the Rev. Proc. 2024-28 safe harbor, FIFO and specific identification, and the temporary reporting exceptions for staking, lending, and DeFi transactions. The session closes by placing Form 1099-DA within the IRS’s broader enforcement toolkit — John Doe summonses, blockchain analytics, Letter 6173, and the Ahlgren prosecution — and identifying the taxpayers most likely to face matching problems and examinations as basis reporting comes online.

BREAK | 1:00pm – 1:10pm

SESSION 2 – Defending the Cryptocurrency Client — Reconstructing Basis, Choosing Between Amended Returns and Voluntary Disclosure, and Keeping a Civil Exam Civil | 1:10pm – 2:10pm

The second session turns the new regime into a controversy strategy. Participants will learn how to reconstruct and substantiate basis when the broker reports none, using exchange records, wallet histories, blockchain data, and reconciliation software; how to choose among amended returns, the IRS Voluntary Disclosure Practice and Form 14457, or defending the filed return in light of willfulness, penalties, and limitations periods; and how to manage the IRS contact itself — CP2000 notices, Letter 6173, IDRs, summonses, Kovel arrangements, and privilege. The session closes with the eggshell audit: recognizing badges of fraud and criminal exposure under §§ 7201, 7206, and 7212 early enough to manage the examination accordingly.