Comment by IAmGraydon

Something doesn't sound right about this. On what grounds did they not recognize your cost basis?

Edit: I'm guessing you acquired the crypto through some means that doesn't keep records/report to the IRS. In that case, what choice does the IRS have? You should never purchase an investment without looking toward the tax implications at the end of the year. It sounds harsh, but you should have known that claiming a cost basis you have no proof for would never fly.