Bitcoin holders under IRS scrutiny as thousands receive warning letters
Thousands of Bitcoin holders across the US are now finding out the hard way that the IRS has been watching closely, without saying a word.
Over the past 60 days, there’s been a 758% spike in people bringing up these crypto warning letters in support chats, and tax firms like Taxing Cryptocurrency are backing up the same trend, according to CoinLedger.
Now these warnings aren’t all the same, but they’re landing in mailboxes fast, and the most common one is Letter 6174, a softer nudge that doesn’t accuse anyone of doing anything wrong.
But there’s also 6174-A, which quietly suggests something might be off. Then it ramps up. Letter 6173 comes with a demand for a response. And CP2000? That’s the one where the IRS has already decided what you owe, and you’ve got just 30 days to reply or face whatever comes next.
The IRS is casting a wide net
Reportedly, a lot of the people getting hit are everyday traders who thought they did everything right. Some never even made a taxable move.
But the IRS has been collecting data from Coinbase, Poloniex, and other exchanges through John Doe Summons, and it seems they’re now using that info to check filings. Ben Yoder, Customer Success Manager at CoinLedger, told Cryptopolitan, “These aren’t tax evaders, they’re everyday investors who held Bitcoin or Ethereum for years and thought they did everything right.”
He added that a common issue is fear about small mistakes made years ago, like one user who forgot to report a few hundred dollars in 2021 and now fears getting audited. It’s not always about what’s missing though, it’s how the IRS is calculating it. Wallet-to-wallet transfers are a huge problem.
If you buy Bitcoin on one platform, move it to your cold wallet, and later sell it on a second exchange, that second platform doesn’t know your original cost.
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