IRS Letters to Cryptocurrency Investors

Last week, the Internal Revenue Service (IRS) started sending letters to more than 10,000 U.S. cryptocurrency investors, urging them to properly report their crypto holdings and pay taxes accordingly. The IRS indicated that the names of these taxpayers were acquired through various ongoing compliance efforts. There are three types of educational letters: 6173, 6174, and 6174-A. Each aims to clarify tax and filing obligations and guide taxpayers on rectifying previous mistakes. Letters 6174 and 6174-A are classified as no-action letters, meaning recipients who have fulfilled their obligations do not need to respond. However, taxpayers may receive these letters even if they are fully compliant. In contrast, Letter 6173 suggests noncompliance and necessitates action. Failure to respond could lead to a review of the taxpayer's account by the IRS. The Block has provided access to Letter 6173, which can be viewed and downloaded below.