The U.S. Internal Revenue Service (IRS) is mass-mailing notices to taxpayers with virtual-asset transaction histories, reminding them of their tax filing obligations. According to tax specialists and industry officials, inquiries from taxpayers who say they have received "Letter 6174" have risen noticeably of late, and the volume of mailings itself is expanding.
Clinton Donnelly, CEO of crypto tax specialist firm Cryptotaxaudit, said contacts from clients who recently received IRS Letter 6174 have surged. In a post on X, he said "this is no longer a problem confined to a handful of cases," noting that dozens of people, including his firm's clients, have received the notice and reached out with questions. He had earlier flagged that mailings of the notice were increasing over the past six weeks. At the time, he estimated the IRS was sending about 10,000 notices a month to taxpayers with virtual-asset transaction records, and characterized the move as an educational measure. More recently, however, analysts say the growing volume is giving the letters a stronger character of pressure to revisit past filings.
Letter 6174 is a document the IRS has sent since 2019 to taxpayers with histories of holding and trading virtual assets. It states that recipients may not have properly understood their tax obligations arising from virtual-asset transactions, and advises them to file amended or late returns if omissions are identified. It does not specify any particular violation, and receipt of the letter alone does not establish that tax law has been broken. In the United States, virtual assets are classified as property for federal income tax purposes, and all related transactions must be reported.
The industry is clear that the notice is not an audit. Donnelly stressed that receiving the letter does not mean a taxpayer should immediately file an amended return. "Don't rush to amend your tax return or submit materials to the IRS before you have an accurate picture of your tax situation," he advised. "Letter 6174 and 6174-A generally do not require a direct response, but you should review the guidance carefully."
David Schwartz, honorary chief technology officer and board member of Ripple, also said he recently received the mailing. He said he discarded the document, calling it "basically just a reminder to comply with the law." He added, "It's just a notice to follow the law — I threw it straight in the trash." Known as a participant in the design of the XRP Ledger, he previously disclosed that he paid about $1.7 million in capital gains tax on XRP sales in 2025. At the time, he explained that he sold roughly 2.5 million XRP — received in 2020 and 2023 — last year. He also said he had not bought XRP for a long time due to discomfort with the risk exposure, and that he has disposed of nearly all of his digital-asset holdings, retaining only a substantial amount of Ripple stock. He said he sells XRP according to a pre-set selling plan to avoid suspicions of insider trading. That refers to a 10b5-1 trading plan under U.S. securities law — a mechanism that prevents insider trading by having insiders pre-determine the quantity, price and timing of trades at a point when they do not possess material nonpublic information.
The episode shows the IRS is stepping up taxpayer outreach as it brings its virtual-asset taxation infrastructure fully online. The notice itself is neither a penalty nor a tax investigation, but if mass mailings continue, more taxpayers may end up re-examining their past filings. Analysts say investors with virtual-asset transaction histories should organize their records by exchange and wallet and check for themselves whether anything was omitted. Tax specialists recommend consulting a professional to confirm one's tax situation rather than hastily filing an amended return simply because a notice arrived.
