IRS Letter 6174 Crypto & Virtual Currency – IRS Crypto Tax Letter
Over the past few years, the IRS has been piecing together a comprehensive, full-court press strategy to enforce domestic and offshore cryptocurrency (and other virtual currency) tax and reporting.
IRS letter 6174
In recent years, the IRS has been slowly honing in on developing practices and procedures for enforcement of cryptocurrency matters. The IRS been training its agents on many of the important issues involving blockchain, mining, forks, and other related technical matters — as well as developing a comprehensive playbook for enforcement.
This includes becoming a member of J5, in which one of the key priorities is the discovery of offshore cryptocurrency transactions.
In addition, the IRS successfully fought for the issuance of a Subpoena/Summons against Coinbase, and received more than 14,000 names of individuals who have a significant amount of cryptocurrency.
6174 IRS Cryptocurrency
When a person receives an IRS Letter 6174, it is because the Internal Revenue Service believes the recipient has ownership of, or interest in cryptocurrency and other “virtual currency.”
The letter puts the recipient on notice that the IRS is aware that he or she may have missed various transaction reporting requirements, tax liabilities, and offshore cryptocurrency compliance.
The following are links to more information on cryptocurrency guides, as prepared by Golding and Golding:
Getting Into IRS Compliance
You have options, and depending on the facts and circumstances of your situation, your options may include the streamlined program, reasonable cause, or the delinquency procedures – which may result in significantly reduced fines and penalties (and may even receive a penalty waiver).
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Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.