There doesn't exist any good tax software for monero. I would have to do it all manually. Also, i wouldn't have any proof for the IRS that they would be willing to accept. In my last audit they were not willing to accept my proof of ownership of bitcoin at a specific date. Instead, they made me trace it all the back to an exchange as if that was the only way i could have aquired my BTC. If i couldn't trace it, then they taxed it as income. In fact, anything that i couldn't trace back to an exchange was treated as income, even if i was transfering between wallets and had thrown away the seeds because they were empty. This went on for 3 years until they were no longer allowed to continue the audit because audits can't exceex 3 years. The end result was a fat bill that will take forever to pay off.
Discussion
Sorry, this may not be obvious, but i am basically operating as if i will be audited for every transaction that i do. I've already been audited, and i don't see why they couldn't do it again just for good measure.
If you buy KYC-free and P2P no one should be able to know you bought crypto in the first place.
If you aren't already familiar - get comfortable using privacy tools. Use a good VPN like Mullvad or IVPN and/or Tor. Keep your real identity completely separate and don't mix them. Create an email specifically for these things with Proton or Tuta. Use email aliases and temporary emails where you can. Use burner numbers or no-kyc sms verification websites when they're needed to create accounts. Use encrypted messengers like Signal, SimpleX, Session, XMPP (OMEMO), or PGP to communicate.
#1:
Best way would probably be to withdraw physical cash and send cash-by-mail using LocalMonero, Bisq, HodlHodl. Or find crypto ATMs near you with little to no info required and buy using cash.
For a bit more convenience and speed you can use payment apps like Cashapp, Paypal, Zelle, etc on those sites above. There is no way for them to know you sent a payment for crypto unless you say that. You can make up a reason or simply leave the memo blank. If you just use common sense and avoid suspiciously large amounts, you won't draw any attention either...but I'm sure you want to be extra cautious after what happened and I don't blame you.
#2:
If you know friends/family/someone that already buys crypto off exchanges anyway, and doesn't plan on changing that, you can get them to act as your proxy. Ask them to buy you crypto and pay them for it for a slight premium to incentivize them. Ask them if you can buy something they're already planning to buy or pay bills for them in exchange for crypto.
#3:
Sell stuff for crypto locally, over Telegram groups, or on p2p markets:
https://t.me/bitcoinp2pmarketplace
https://anarkio.codeberg.page/markets/
Monerozon and PeerShop allow you to buy anons something on Amazon and get paid in Monero. You wont know the person or their address, they wont know who you are, and Amazon won't know you're getting paid in Monero. Fairly new though so not much traffic atm.
Last method I can think of is to freelance, work under the table, or do odd jobs and ask them to pay you in crypto.
I'm sure I'm forgetting a few things...
Check my profile for links and more info
I'm not telling you what to do this is just me thinking out loud. This is just how I would do it if I was in a similar situation.
another bookmarked note fren. cheers
All of that sounds great, but none of it addresses the core issue. Having to face my auditor. They are adversarial. This is no secret. They are this way to deter non-compliance. You are guilty until proven innocent. The only reason i didn't go to jail was because i had nothing to hide. It's like a 3 year long police interrogation.
Going forward and thinking rationally...how would they know you bought crypto in the first place if you use these methods? It's nearly impossible. Even though they would like you to believe it - they aren't omniscient. To even bring scrutiny your way *you literally had to tell them you bought crypto*
Like I said I'm not telling you what to do. If you don't feel comfortable, or want to lay low for awhile, dont do it. 100% understand. That shit sounds like a nightmare.
Inflows vs outflows. If my investments succeed then i would be limited in my ability to spend them. I would arguably be less sovereign because i would have to operate via some proxy between the gray market and white market. Paying rent, or a house payment would be difficult. Sure I could probably live as a minimalist, but i would still depend on other people to function. My lanlord has to run a credit check, proof of employment, etc. Live like a drug dealer?
The value prop of Bitcoin/Monero is permissionless which is incompatible with white markets by definition...so yes, pretty much. Unless you can find clever ways to navigate.
If one is going to make transactions that follow the rules, there is little reason to have or use Bitcoin/Monero. In fact, it might even end up worse than just using fiat i.e. what you went/are going thru
I think the issue is my environment. I have been surrounded by sheeple my whole life, and have never been able to successfully operate in the gray market without it blowing up in my face. The whole prisoner's delimma dynamic only works in your favor when the mafia has your back.
Shit just blows up in your face. Nothing is perfect, like you said. You play by the rules, you get burned. You work around the rules, get burned. There are no right answers.
