Tax Authority Inquiry

Tax Authority Inquiry
About Your Crypto?

You received a letter from the tax authority requesting information about your crypto activities? No reason to panic, but a reason to act. Here is a step-by-step guide on how to respond correctly.

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Tax Authority Inquiries in Numbers

Since DAC8 and the automatic exchange of information, tax authority inquiries are increasing:

2-4 Weeks
Typical Deadline
The time the tax authority typically gives you to respond (AT: BAO §143)
DAC8 from 2026
Automatic Data Exchange
Crypto exchanges report transaction data directly to tax authorities
Estimation Risk
If You Don't Respond
The tax authority can estimate your income, almost always to your disadvantage
Background

Why the Tax Authority Asks About Crypto

The tax authority has various ways to learn about your crypto activities. These triggers most commonly lead to a formal inquiry:

01_DAC8_DATA

DAC8 Data Exchange

Starting 2026, crypto platforms automatically report transaction data to tax authorities. The tax authority cross-references this data with your tax return.

02_BANK_DATA

Bank Transactions

Larger deposits from crypto exchanges to your bank account can raise flags. Banks are required to report suspicious transactions.

03_TAX_RETURN

Incomplete Tax Return

When crypto income is missing from your tax return or statements are contradictory, the tax authority requests an explanation.

Step by Step

How to Respond to a Tax Authority Inquiry Correctly

The correct sequence is critical. Follow these steps:

1

Read the letter

What exactly is being asked? What is the deadline? What time period?

2

Contact a tax advisor

Engage a tax advisor before taking any action on your own

3

Evaluate voluntary disclosure

If income was not declared previously: clarify BEFORE responding

4

Prepare documentation

Compile and prepare your crypto transaction history

5

Respond on time

Submit a complete response or request a deadline extension

Important: Never respond to a tax authority inquiry without a tax advisor. The tax authority asks targeted questions. Every statement can have tax consequences.

Common Mistakes

Mistakes You Should Avoid

Disclosing too much

Only answer what is specifically being asked. Voluntarily providing additional information can open up new areas of investigation.

Providing too little

Incomplete responses lead to follow-up inquiries and prolong the process. Or worse: the tax authority estimates your income.

Missing the deadline

Letting the deadline pass is the biggest mistake. It is better to request a deadline extension.

Responding without a tax advisor

A tax authority inquiry is a formal proceeding. Without tax advice, you risk unnecessary disadvantages.

How TX-Partner Helps

What TX-Partner Prepares for Your Response

TX-Partner does not provide legal or tax advice. TX-Partner prepares your crypto accounting so that your tax advisor can work with it immediately.

Transaction History

Complete documentation of all crypto transactions for the requested time period. Chronological, with fiat values, across all wallets and exchanges.

Reconstruct Missing Data

When exchange exports are no longer available, TX-Partner reconstructs the history from on-chain data.

Tax-Advisor-Ready

The documentation is structured so that your tax advisor can directly amend the tax return or respond to the inquiry.

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Frequently Asked Questions

What We Get Asked Most

A tax authority inquiry is a formal notice. You must respond within the stated deadline, typically 2-4 weeks. If you need more time, you can request a deadline extension.
If you do not respond on time, the tax authority can estimate your income. These estimates are almost always significantly higher than your actual gains.
Strongly recommended. A tax advisor knows the formal requirements and can assess what you need to disclose and what you do not. TX-Partner prepares the crypto accounting so your tax advisor can work with it immediately.
Missing data is not a reason to skip responding. TX-Partner can reconstruct crypto histories from on-chain data, even when exchange exports are no longer available.
If you have not declared crypto income so far, a voluntary disclosure may be advisable. This must be evaluated BEFORE responding to the tax authority inquiry. Discuss this with a tax advisor.
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