IRS Crypto Tax Letters Prompt Reports From Dozens, but No Public Count

The Internal Revenue Service (IRS) has not published a current count of crypto tax letter mailings, while CryptoTaxAudit CEO Clinton Donnelly says dozens of people contacted his firm after receiving notices.

Donnelly said in a Nov. 9 post that the contacts included clients and other people. “This is no longer an isolated handful of cases,” he wrote. He did not give a total, and the reports do not establish how many letters the IRS sent or whether mailings have increased.

Letters 6174 and 6174-A are voluntary compliance notices for people who had digital-asset accounts and may not have met tax filing or reporting requirements. The inquiries are not audits. The sample notices say recipients do not need to respond; the sample Letter 6174 states, “You do not need to respond to this letter.” Recipients are advised to review their returns and file an amended or delinquent return if they find an error. The 6174-A sample says the IRS could contact recipients again about possible enforcement.

Letter 6173 has different instructions: its sample directs recipients to take one of several actions by the date shown. Recipients should check the number on their letter and follow the instructions included with that notice.

For federal tax purposes, digital assets are property. Taxpayers generally must report when they sell or swap digital assets, or spend cryptocurrency on goods or services.

For 2025 broker transactions, brokers had to provide taxpayers Form 1099-DA statements by Feb. 17, 2026. Most statements for 2025 will omit cost-basis details; taxpayers must report related income, gains or losses even if no Form 1099-DA arrives.

The IRS announced in 2019 that it expected more than 10,000 taxpayers to receive crypto tax letters by the end of August that year. That estimate concerned the 2019 mailing and does not show the current volume. The IRS has also warned that letters directing crypto holders to register through a “Digital Asset Compliance Portal” are fraudulent; the agency does not operate that portal.