Quick answer: If you received Letter 6174 and you never reported crypto taxes from earlier years, you can almost always come back into compliance, and in many cases amending your returns is the right way to do it. But amending is not automatically the correct move. The single question that decides your path is whether…
Continue reading ›Quick answer: Does Coinbase report to the IRS? Yes, and by the time a Letter 6174 lands in your mailbox, the IRS very likely already holds data about your exchange activity going back years. It gathers that information from tax forms the exchanges file, from court-ordered summonses that pulled historical account records, and now from…
Continue reading ›Quick answer: If you lost cryptocurrency to a scam and never claimed a crypto scam theft loss on the year it happened, you may be able to amend that return to claim it, and the deduction can be substantial. The rules are technical, and two points decide a lot: scam losses tied to an investment…
Continue reading ›Quick answer: One of the most common crypto tax mistakes is assuming that if you sold at a loss, you did not have to report it. You almost certainly did. Selling or exchanging cryptocurrency is a reportable event whether you made money or lost it, and leaving a loss off your return is exactly the…
Continue reading ›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 ›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…
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