IRS Sends Large Number of Notice 6174 Letters to Cryptocurrency Taxpayers

The Internal Revenue Service is sending cryptocurrency taxpayers a large number of Notice 6174 letters asking them to review past tax filings. According to Odaily, Cryptotaxaudit CEO Clinton Donnelly said dozens of people, including his clients, had recently contacted the firm about the notices, and receiving one does not by itself indicate a violation. Donnelly previously estimated that the IRS sends about 10,000 such notices each month. Notice 6174 is a voluntary compliance reminder stating that the IRS has information about a taxpayer’s cryptocurrency transactions and asking recipients to check whether they met their tax filing obligations. Donnelly said the letters do not identify specific filing issues and generally do not require a direct response. He advised recipients to read the notice carefully and review their circumstances before amending a return or submitting information to the IRS.