Quick answer: If you are asking do I have to respond to IRS Letter 6174, the short answer is no. Letters 6174 and 6174-A are “soft” educational letters that do not require a response. Letter 6173 is different: it generally requires a written response within about 30 days, and ignoring it can trigger an examination.…
Continue reading ›QSBS for crypto startups is one of the most valuable, and most misunderstood, tax questions in the industry. The Qualified Small Business Stock exclusion under Section 1202 can wipe out federal tax on a large share of the gain when qualifying stock is sold. Crypto founders and early investors naturally want in. The catch is…
Continue reading ›Qualified Small Business Stock (QSBS) is one of the most powerful tax benefits available to founders, early employees, and investors. Under Section 1202 of the Internal Revenue Code, a taxpayer who holds qualifying stock in a small C corporation can exclude a large portion, and in many cases all, of the capital gain when the…
Continue reading ›Most IRS audits are administrative exercises — civil examinations conducted by Revenue Agents who develop adjustments, propose additional tax, and eventually close the case. Most audits end with no change, with an agreed adjustment, or with an unagreed Revenue Agent’s Report that proceeds to Appeals. Some audits are something else entirely. An eggshell audit is…
Continue reading ›When an IRS Revenue Agent opens an examination, they are not approaching your return with an open mind looking for whatever happens to come up. They are approaching it with a defined set of issue categories they have been trained to develop, supported by analytical techniques the IRS teaches in formal examination training. Knowing what…
Continue reading ›An IRS CP2000 notice response is one of the most time-sensitive tasks a taxpayer will ever face. The CP2000 — often called an “underreporter notice” — arrives when the IRS believes the income, payments, credits, or deductions you reported on your tax return do not match what third parties reported about you. You have a…
Continue reading ›Quick answer: IRS Letter 6174 is a “soft” educational letter the IRS sends when it has information that you own or trade cryptocurrency and wants to be sure you reported it correctly. It does not require a response. That does not mean it is nothing. It means the IRS already has data on you, and…
Continue reading ›By Alex Kugelman, Founder and Managing Attorney, Kugelman Law Not all cryptocurrency audits are the same. Understanding the types of cryptocurrency tax audits the IRS conducts — and what typically triggers each — gives crypto investors, traders, miners, and businesses a meaningful head start in evaluating their exposure and their options. A correspondence audit and…
Continue reading ›By Alex Kugelman, Founder and Managing Attorney, Kugelman Law Understanding the stages of an IRS crypto audit is the single most useful thing a taxpayer under examination can do. Each stage has its own rules, its own deadlines, and its own strategic opportunities. Missing a deadline or misjudging a stage can cost you settlement leverage,…
Continue reading ›Marin County is home to some of California’s highest earners, most successful entrepreneurs, and most sophisticated investors. It’s also a frequent target for IRS and California Franchise Tax Board (FTB) audit activity. If you’ve received an audit notice at your home in Mill Valley, Tiburon, San Rafael, Sausalito, or anywhere else across Marin, you need…
Continue reading ›
