have you used FIFO in the past for crypto sales?
The IRS Notice 2014-21 provides no guidance on which valuation method is acceptable. IRS has had ample time since then to release more specific guidance on crypto taxation. Even the new tax law signed into effect in December 2017 does not clarify acceptable accounting methods for cryptocurrencies. However, the use of LIFO, at least for stock sales, requires that adequate identification can be made. This is difficult, if not impossible, for most crypto trades. You could argue that requirements for stock sales don’t apply to crypto- currencies. If the IRS agrees with that or not is still unknown. The use of LIFO instead of FIFO seems possible at this time, in the absence of specific guidance from the IRS. But as you can see, there is risk involved.
If the IRS disagrees with the use of LIFO for crypto trades, you may face additional taxes plus penalties.
if you used FIFO in the past for crypto sales changing to LIFO could be regarded as a change in accounting methods requiring IRS approval by filing form 3115.
if not to protect yourself from a possible charge of tax evasion, you may want to see a tax pro about filing a request for a Private Letter Ruling. this can be expensive and the IRS does have the right to say no you can't use LIFO.
