Purpose: The check categorizes how difficult a crypto record trail may be to reconcile. It does not estimate tax, missing basis, audit probability or whether a broker form is correct.
Factors and weights
| Factor | Low | Middle | High |
|---|---|---|---|
| Platforms or wallets | One: 0 | Two or three: 1 | Four or more: 2 |
| Transfers | None: 0 | Some matched: 2 | Many or unmatched: 3 |
| Acquisition history | Complete: 0 | Partly missing: 2 | Mostly unknown: 4 |
| DeFi activity | None: 0 | Limited: 2 | Substantial: 4 |
Result bands
- 0–3 points: Low record complexity. The history appears concentrated and comparatively complete.
- 4–7 points: Moderate record complexity. Transfers or gaps may require manual matching.
- 8–13 points: High record complexity. Missing acquisition data, numerous transfers or DeFi activity may warrant specialized reconciliation or professional review.
Why we do not show a 0–100 risk score
A precise-looking tax “risk score” would imply validated predictive power that this educational tool does not possess. The check reports disclosed recordkeeping factors instead. It does not use taxpayer income, filing position, jurisdiction, token-level records, broker corrections or professional judgment.
Limitations
- User responses are not independently verified.
- Low complexity does not prove that records or forms are correct.
- High complexity does not prove an error or tax exposure.
- The tool does not apply tax law to individual transactions.
- The result cannot substitute for issuer support, tax software reconciliation or qualified advice.
Source policy
Federal Form 1099-DA claims are checked against current IRS recipient and digital-asset guidance. Platform instructions should be confirmed against the platform’s current support documentation because interfaces and available exports change.
Primary source: IRS — Understanding Your Form 1099-DA. Corrections: support@digitalechoesacademy.com.