IRS sends out tax notices to crypto investors, sparking concerns in the community

From Yahoo Finance: 2025-06-30 19:44:00

The IRS has sent out a large number of tax notices to crypto investors, sparking concerns within the community. Thousands of investors have received warning letters over the past two months, a significant increase from previous years. The letters indicate that the IRS has records of cryptocurrency holdings and potential reporting discrepancies.

Tax experts are witnessing a surge in questions related to crypto taxes, noting that this is the most IRS attention on the matter since compliance letters sent from 2020 to 2021. The new IRS letters are prompting recipients to review their reporting of virtual currency transactions, particularly those on exchanges like Poloniex.

Recipients of the IRS letters are advised to provide a detailed statement of facts explaining their tax reporting position and history of virtual currency income. Some letters serve as reminders to double-check filings, while others require more substantial responses, such as filing an amended return or providing explanations for reporting accuracy.

Amidst the IRS enforcement efforts, Senate Republicans are advancing a tax reform project known as Trump’s One Big, Beautiful Bill. Senator Cynthia Lummis is expected to introduce an amendment that would suspend taxes on mining, staking, and airdrops until assets are sold, potentially addressing the issues leading to increased IRS scrutiny of crypto.



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