r/CryptoTax • u/AlfalfaTemporary6574 • May 21 '25

Letter from IRS

So I just got a letter from the IRS, but it's a bit vague. Basically saying they know I have a wallet, and might need file an amended return for one or more years. I want to deal with this in a timely manner but I'm not sure where to start. I haven't sold anything in 7 or 8 years, when how to deal with taxes was unclear. And haven't even traded or exchanged anything in I'd say 3 or 4 years. I didn't realize that exchanging was a taxable event at that time. I've never filed an amended return and the letter lists a ton of different forms I might need or use. Can i figure this out on my own with the info from my exchange? Should I try calling the irs hotline# on the letter? Would it be worth trying to find a crypto tax accountant or something?

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u/JustinCPA May 22 '25

What type of letter is it? If it’s a 6174 or 6174-A, no response is required. They are simply saying “hey we know you had crypto and didn’t report it, please consider amending your returns as needed”.

5

u/BTC_ETH_HODL May 22 '25

Are these letters primarily as a result of the IRS knowing someone has unreported crypto gains because they got the records from a centralized exchange?

4

u/333again May 22 '25

Based on what I’ve seen on here, yes. Generally they are sent to people with Coinbase or other major CEX accounts that didnt report any crypto.

4

u/BTC_ETH_HODL May 22 '25

That’s what I was thinking.

2

u/AttorneyAdvice May 22 '25

maybe yes, maybe no

6

u/tommarkz May 22 '25

But if op did have any transactions like he/she stated they haven’t sold any crypto from 7-8 years ago, and they haven’t traded anything from 3 to 4 years ago aren’t these “cases” closed out? Aren’t IRS cases closed after 3 years for the reporting year?

5

u/FalconCrust May 22 '25

In a civil tax fraud/evasion case, the IRS can go back indefinitely (no limit), while criminal cases are limited to six years.

5

u/BitcoinPlebb Jun 06 '25

It’d be great if they include the year…

3

u/AlfalfaTemporary6574 May 24 '25

It is letter 6174. So does that really mean I don't have to do or pay anything? I'm pretty sure if I owed anything it would be from several years ago, but also wouldn't be anything crazy. I'd rather pay than get in trouble.

3

u/Firm_Ad_6712 May 24 '25

Even a penny in profit off your crypto trades is taxable, however what you pay is based on your total income, or so I'm told. 🤔

2

u/JustinCPA May 24 '25

If you received a 6174, then an audit could be looming. This letter is the IRS giving you a soft nudge to get your returns amended and cleared up without launching a full audit. If you do nothing, an audit could be coming. I’d suggest getting your records cleaned up and amended.