Well if you really want to be avoided by being audited by the IRS you mus include your earnings from the ICO In your income tax report. It could be classified as 2 kinds you can either make it as an income or you can put it as capital gains like in real estate and stocks. It is really up to you on which it can be tax lower. Hiding your true income is really a pain in the ass, so if you don't want to be bothered by the IRS you must be truthful.
That's the thing, I am 100% for paying rightful taxes and plan on doing so. From my understanding, you only pay taxes on a taxable event (like a trade/sell) correct? If I buy and hold without selling/trading, does this need to be reported also? This is a new field to a lot and I want to do it the right way.