IRS letters to crypto investors have increased sharply with nearly 800 cases reported between May and June.
Many letter recipients held accounts on Poloniex, suggesting new data access by the IRS may have triggered action.
The IRS is urging investors to review and correct crypto tax filings as scrutiny rises with the market rebound.
Crypto investors in the United States are seeing a rise in tax enforcement efforts by the Internal Revenue Service (IRS). Over the past two months, the agency has issued a surge of warning letters. These letters focus on discrepancies in digital asset tax reporting.
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According to tax professionals, the number of IRS letters has grown sharply compared to the same period last year. CoinLedger, a platform assisting users with crypto taxes, recorded almost 800 support queries related to “IRS letters” between May and June. That figure is nearly nine times higher than the same months in 2024.
Crypto Attorneys See Uptick in Client Concerns
Tax attorneys across the country are also reporting increased inquiries. One firm that received no such calls in 2024 has now handled multiple cases each week. These contacts suggest many investors may have failed to properly report digital asset transactions.
Experts say this wave resembles earlier IRS crackdowns. In 2020 and 2021, the agency sent compliance letters after securing customer data from exchanges such as Coinbase. That effort followed a 2017 court ruling ordering Coinbase to share user records.
Letter Types Vary by Severity
The new IRS letters fall into three categories. Two types advise recipients to verify that their crypto filings were accurate. These versions do not require a formal response. The third type is more urgent and demands that investors either amend past returns or confirm their current filings are correct.
The IRS has not shared details about what prompted the latest enforcement push. However, some legal experts suggest a possible link to Poloniex. Many letter recipients reportedly held accounts on the Seychelles-based exchange. This has led to speculation that the IRS accessed new transaction records from that platform.
Poloniex had been ordered by the US Treasury Department’s Office of Foreign Assets Control (OFAC) to pay a $7.6 million fine for violating US restrictions.
Growing Scrutiny Mirrors Market Rebound
The enforcement surge comes as crypto prices trend upward. Bitcoin has led the recent market rebound, drawing more investor interest. Analysts project that the top coin might hit $135,000 soon. However, with the growth in investment comes a renewed focus on tax compliance.
Under U.S. tax law, investors must report all taxable crypto activities. This includes trading, staking, mining, and gifts over set thresholds. Failure to report gains can result in penalties. Losses can be claimed but must also be documented.
The IRS effort suggests that digital asset holders should review their filings. As activity increases, authorities are likely to intensify oversight. Investors should ensure that all reportable crypto transactions are properly declared.
