This would be my exact issue here. I have a first hand experience with unreal expectations from my irs.
Last year they wanted us to submit taxes for every transaction crypto -> crypto. Somebody completely detached from reality interpreted the law and requested the impossible. There was a little storm in the community, irs gave up this crazy idea.
However few subjects, like the biggest crypto-exchange had to run away of borders, because taxes would eat them whole up.
As you can see, law matters a lot.