IRS sends fresh batch of tax notices, stoking investor concern

IRS sends fresh batch of tax notices, stoking investor concern originally appeared on TheStreet.

Crypto investors are on edge after the IRS started mailing out a flurry of warning letters to Bitcoin and other cryptocurrency holders. Several tax experts say that thousands of investors have received notices over the last two months, far more than in previous years.

Crypto tax lawyers Jordan Bass and Andrew Gordon say they're seeing a similar swell in questions, calling it the most attention on crypto by the IRS since a wave of compliance letters sent from 2020 to 2021.

The new IRS letters inform recipients that the agency has records of them holding cryptocurrency — in some cases, on exchanges like Poloniex — and that they may have failed to report those assets correctly, as reported by Fortune.

"If you believe you followed all tax and information reporting requirements relating to your virtual currency accounts, mail or eFax the following to the address or eFax number shown at the top of this letter: a statement of facts explaining your position. Include a complete history of previously reported income from your virtual currency transactions. Explain the actions you took to become compliant with U.S. reporting requirements and provide copies of previously filed documents that confirm your compliance," reads the letter.

Some letters are just reminders encouraging investors to double-check their filings. Others are more significant and require a response, such as filing an amended return or explaining why they believe their tax reporting was correct.

Join the discussion with WendyO on Roundtable here.

This latest round of IRS warning letters comes at a time of intense discussion over crypto tax policy in Washington. While the IRS is moving toward greater enforcement, Senate Republicans are advancing a massive overhaul of the tax landscape with a new tax reform project dubbed Trump's One Big, Beautiful Bill.

Cynthia Lummis is expected to introduce a critical amendment that alters the tax treatment of digital assets.

This amendment would suspend taxes on mining, staking, and airdrops until the assets are sold, which would potentially address the issues that led the IRS to take an increased interest in crypto.

IRS sends fresh batch of tax notices, stoking investor concern first appeared on TheStreet on Jun 30, 2025

This story was originally reported by TheStreet on Jun 30, 2025, where it first appeared.

View Comments