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Crypto investors throughout the United States are encountering increased examination from the Internal Revenue Service (IRS), which has dispatched a wave of warning letters in the last two months.
According to tax professionals, these letters indicate that the agency is intensifying enforcement efforts after discovering inconsistencies in recent tax submissions related to digital asset transactions.
Fortune reported on Sunday that the number of notices has significantly increased compared to the previous year, as noted by crypto tax specialists.
Crypto Tax Professionals Report Increase in IRS Letter Inquiries Since May
CoinLedger, a well-known platform assisting users with crypto tax filings, recorded nearly 800 support requests mentioning “IRS letters” from May to June. This figure is approximately nine times higher than what was observed during the same timeframe in 2024.
Crypto tax attorneys are also experiencing a notable rise in inquiries. Jordan Bass, an accountant and attorney, stated that his firm received at least 10 inquiries in the past two months, whereas he received none the previous year. Another attorney, Andrew Gordon, mentioned that his office is now handling several such calls each week.
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This increase is reminiscent of earlier IRS enforcement actions. In 2020 and 2021, the agency issued a series of compliance letters after acquiring data from major exchanges such as Coinbase. This initiative followed a 2017 court ruling that mandated Coinbase to provide thousands of customer records.
Poloniex Connection Suspected as IRS Letters Target Former Users
The recent letters differ in tone and urgency. Two versions recommend that recipients verify whether they accurately reported their crypto transactions, without requiring a response. A third version is more assertive, directing investors to submit new or amended returns or to clarify why their existing filings are correct.
While the cause of this latest round remains uncertain, some speculate it may be linked to Poloniex. Gordon and Kemmerer observed that many recent recipients of the letters had accounts with the exchange. This could imply that the IRS has acquired new transaction data, although the agency has not confirmed this.
“I’m sure there’s just people randomly getting selected, and the lucky ones get these scary letters,” remarked CoinLedger’s CEO David Kemmerer, highlighting that outreach typically escalates following such access.
Under US law, crypto investors are required to report all taxable transactions. This encompasses selling or exchanging coins, receiving income from staking or mining, and even gifts exceeding certain limits. Losses can also be claimed, but neglecting to report gains may result in severe penalties.
The post IRS Floods US Crypto Users With Notices — What You Need to Know appeared first on Cryptonews.
