This is a hypothetical question/scenario.
A person purchased bitcoin and used it to make purchases (taxable events) and then sold the rest for fiat (taxable event) and all this activity occurred in tax year 2016. The person did not claim the gains/losses on his/her tax return out of ignorance (not fraud). Isn't this person outside of the three year statue of limitations? I know the IRS can extend to six years in the event the gains excluded were greater than 25% of income on the return, but let's say that was not the case. There is also no statue of limitations if there was fraud involved, but in this case the person was just ignorant of what to do.
In this example, would the IRS be able to to audit this person?
I know the example is not good, but I'm trying to understand statute of limitations because I have a feeling the IRS is going to turn up the heat to pursue people from the 2017 crypto run-up who did not report crypto gains. I've made these points to others on reddit and those I know in person but no one seems to care and someone threw out the statute of limitations would be up soon. Is this true?
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