Every year individuals and companies must complete and file a tax return. For the chronically disorganised, this means a frantic scrabble through piles of unsorted paper, but in the paperless world, it is even more complicated. With cryptocurrencies making a new entry in the IRS ledger, tax records still need to be filed and taxpayers still need to produce appropriate evidence. Today, much of this evidence is going to take the form of digital files stored on a hard drive, or with online and cloud storage services, which may be difficult to access when the time comes.

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Governments will eventually find a way to tax any new system, and authorities are already pondering the enforcement of new tax regulations for digital records, and how evidence can be substantiated. Tax experts emphasise that whatever innovations are introduced to encompass the new system, when it comes to taxation most countries rely on the goodwill and honesty of their people.

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Self-assessment and self-reporting are the first line of defence on a tax return, and accurate recording is paramount. In the digital world, particularly as regards cryptocurrency trading, the evidence is more difficult to prove, so it is crucial to keep backup copies of all electronic records. All trading transactions should be downloaded and exported as a printable record, and any purchases made with crypto must also be recorded, with relevant details, amounts and dates.