Got an IRS letter about crypto? Start here.

If the IRS has written to you about cryptocurrency, the letter or notice number on the document tells you what is being asked. Letter 6173 requires a signed response by its printed deadline; Letters 6174 and 6174-A require no response; a CP2000 notice proposes changes you must answer by the date it carries.

The four notices, at a glance

The IRS has sent letters about virtual currency and digital asset reporting since 2019, and it still lists them among its active voluntary compliance letters. Three of them — Letters 6173, 6174, and 6174-A — deal directly with digital asset reporting. The fourth, the CP2000 notice, is the general document-matching notice that increasingly reaches crypto holders as broker reporting on Form 1099-DA expands. The first wave was announced in July 2019, when the IRS said more than 10,000 taxpayers would receive one of the three letters by the end of that August — and the Commissioner urged recipients to “take these letters very seriously.”

How to tell the three letters apart

The three 617x letters look almost identical. Each carries the same heading — “Reporting Virtual Currency Transactions” — and the same reminder, drawn from Notice 2014-21, that virtual currency is treated as property for federal tax purposes, so sales, exchanges, and spending are all reportable dispositions. The differences live in the first sentence and the last one:

• Letter 6174 opens by saying you “may not know the requirements” for reporting virtual currency — an assumption of honest confusion. It closes: “You do not need to respond to this letter.” Full stop.
• Letter 6174-A opens by saying you “may not have properly reported” your transactions. It closes with the same no-response line — plus one more sentence: the IRS “may send other correspondence about potential enforcement activity in the future.”
• Letter 6173 opens by saying you may not have met your U.S. tax filing and reporting requirements, and its header carries a “respond by” date. It closes with what happens if you stay silent: the IRS “may refer your tax account for examination.”

All three give the same instruction in the middle: review your filings, and if something is missing, file the delinquent or amended returns — writing the letter number at the top of the first page of anything you send. Only the 6173 adds a third path: if you believe you are fully compliant, you submit a statement of facts explaining your position, signed under penalties of perjury. Our Letter 6173 guide walks through that choice in detail.

Why the IRS writes: matching, not mind-reading

Every one of these letters begins the same way: “We have information that you have or had one or more accounts containing virtual currency.” The IRS is telling you it already holds third-party data about you. What began as ad hoc compliance efforts is now a standing pipeline: brokers must report gross proceeds for digital asset sales effected on or after January 1, 2025 on Form 1099-DA, and must report basis on certain transactions effected on or after January 1, 2026. The IRS is blunt about the other half of the bargain: whether or not you receive a Form 1099-DA, you must report all income, gains, and losses from digital asset transactions on your return.

A worked example: how a mismatch becomes a notice

Suppose you bought 0.4 BTC in 2023 for $12,000 and sold it in 2025 for $26,000 through a U.S. exchange. The exchange reports $26,000 of gross proceeds to the IRS. Your actual gain is $14,000 — $26,000 minus your $12,000 cost basis. But for a 2025 sale, the form generally shows proceeds, not basis. If the sale never appears on your return, the IRS computer sees $26,000 of unexplained proceeds, and the CP2000 it generates can propose tax as if far more than $14,000 were gain. The difference between answering that notice with basis records and answering without them is the difference between a $14,000 gain and an argument about $26,000. That is why our CP2000 guide starts with records, and why the Form 1099-DA guide matters before any notice arrives.

How to read any IRS notice

Whatever arrived in your mailbox, three details orient you immediately:

• The notice or letter number, printed in the right-hand corner of the document. That number — not the tone of the letter — tells you what the IRS is actually asking of you, and you can look it up on the IRS’s own notices and letters index.
• The tax year the notice concerns. IRS correspondence is about a specific year, and your records for that year are what matter. The 2019 template of Letter 6173, for instance, covered tax years 2013 through 2017; your letter states the years it covers.
• The deadline, if the notice has one. When a response is required, the date that governs is the one printed on your letter.

The first week, step by step

1. Confirm the letter is real. Match the number on your document against the IRS’s published version — the letters above are all posted on irs.gov — and be suspicious of any “IRS” contact that did not start with postal mail.
2. Identify the number and read its guide. The table above routes you: 6173, 6174, 6174-A, or CP2000.
3. Calendar the deadline. Letter 6173 responses are due by the “respond by” date in its header — and the letter itself allows a written request for a 30-day extension, sent by that same date. A CP2000 has a response date on its face, and the IRS notes you can ask for more time.
4. Pull the records for the tax year named. The letters spell out what matters: bank, wallet, and exchange reports and statements — the documents that establish your basis and proceeds. Start gathering them even if your letter requires no response.
5. Choose the response path deliberately. Agree and pay, amend, file a missing return, or — for a 6173 — submit the signed statement of facts. Many taxpayers engage a professional here; Letter 6173 explicitly provides for representation with a Form 2848 power of attorney.

What not to do

• Don’t ignore a Letter 6173. It is the one letter in the series where silence has a stated consequence: referral of your account for examination, with interest and penalties on any underpayment.
• Don’t sign what you haven’t verified. The 6173 response is a declaration under penalties of perjury, and the letter warns that submissions “will be checked against information received from banks, financial advisors, and other sources.” Check your records before your signature says you did.
• Don’t treat a CP2000 total as a bill. The IRS itself says the notice isn’t a bill. The proposed amount is computed from what third parties reported — and gross proceeds with no basis attached can overstate your actual gain badly. Respond with documentation rather than paying a number you haven’t checked.
• Don’t reply to “IRS” emails, texts, or DMs. Work only through the addresses and numbers printed on a letter you have verified against IRS.gov.
• Don’t discard the letter. Keep the notice with your records for that tax year, even the ones requiring no response — if the IRS writes again, the paper trail of what you received and did is yours.

Edge cases worth knowing

• You got a 6174 or 6174-A but everything was reported. There is nothing to send — the letters say so. Review your filings once, file the letter, move on.
• You believe the IRS has the wrong person or the wrong facts. Letter 6173 anticipates this: its compliant-taxpayer option is precisely a statement of facts explaining your position, with a complete history of previously reported crypto income. Disagreement is answered with documentation, not silence.
• You have unreported years but no letter yet. The obligation exists whether or not a letter or a 1099 arrives. The calmer path is to fix filings before the mail comes — our guide to options for unreported crypto covers amended returns, delinquent returns, and voluntary disclosure.
• Multiple letters, multiple years. Each notice stands on its own: its own year, its own deadline, its own required response. Track them separately and answer the mandatory ones first.

Where to go next

Each letter has its own plain-language guide:

• Letter 6173 — the one that requires a signed response by its deadline.
• Letters 6174 and 6174-A — the educational notices that require no response, but deserve one anyway (to your own records).
• The CP2000 notice — the proposed-changes notice, and why crypto mismatches trigger it.
• Form 1099-DA — the broker form feeding the IRS’s matching system, and the records that keep it honest.

Common questions

Last reviewed July 30, 2026 · Reviewed by Andrew Gordon, JD, CPA

This page is educational and does not constitute tax or legal advice for your specific situation. For questions about your own filings, consult a qualified tax professional.