Sarah___khan

In today's episode, XRP climbs after Ripple CEO Brad Garlinghouse confirmed that the firm is applying for a banking license in the United States. Plus, CNBC Crypto World provides an inside look at the Ethereum Community Conference taking place in Cannes. And, Michael Anderson, co-founder of Framework Ventures, breaks down how the venture capital industry is thinking about the stablecoin space.

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. It might report a cost basis of zero, and the IRS thinks your entire sale was profit, even if it wasn’t. That’s how people who filed correctly are still getting flagged.
Ben said, “We’ve seen that wallet-to-wallet transfers are a major source of confusion. Many users don’t realize that while these transfers aren’t taxable, failing to keep proper records on them can lead to tax reporting issues.”
So even though the movement itself doesn’t create a tax event, the lack of documentation messes with how gains are calculated.
New 1099-DA form will fuel more IRS letters
This whole situation is only going to get worse. In 2026, crypto exchanges will start sending out Form 1099-DA to both users and the IRS. The form will show gains and losses. If folks don’t report the same income that shows up on their 1099-DA, CoinLedger says they’ll likely get hit with a CP2000.
David Kemmerer, CEO of CoinLedger, said, “The IRS has more visibility into crypto than ever before, but without accurate cost basis data, even compliant investors can get mistakenly flagged.” He said this is only the beginning, and people need to start getting their records straight now.
If you get one of these letters and know your return is solid, don’t panic. You can fight it. But you’ll need proof. That means screenshots, trading history, 1099s, anything that shows what you actually paid. Respond to the IRS with documentation to back up your numbers.
Crypto tax tools like CoinLedger can help pull all your trades and transfers from different wallets and exchanges into one place so you can present the full picture.
People are also asking why they’re getting letters at all. They are especially confounded that it’s happening during the Trump administration, where many assumed crypto would get a free pass. But nothing has changed yet. While President Donald Trump floated the idea of making US-based crypto gains tax-free, that hasn’t moved through Congress. Right now, the IRS is still taxing crypto like stocks, and it’s using everything in its arsenal to enforce that.
For those who realize they missed something on a past return, there’s still a way to fix it. You can file an amendment using Form 1040X, and the IRS is typically more forgiving if you’re the one coming forward. If you’re making big changes, include a short note to explain what you corrected to help avoid future questions.
When it comes to hiring help, it depends on the letter. If you got CP2000 or 6173, it’s probably smart to get a crypto tax pro. Those letters carry higher risks, especially when there’s a disagreement over how much you owe. For the less aggressive letters like 6174 or 6174-A, you might be fine using a tool like CoinLedger to double-check your gains and fix anything off.
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