Clinton Donnelly, CEO of Cryptotaxaudit, a company specializing in cryptocurrency tax returns, capital gains calculations and forensic crypto analysis, has reported a growing number of cases involving the notices. According to Donnelly, dozens of individuals, including clients of his firm, have recently contacted the company after receiving correspondence from the US tax authority.
Donnelly described the growing volume as concerning, suggesting that the IRS may be intensifying efforts to encourage cryptocurrency users to review their tax reporting obligations. However, he emphasized that receiving a Letter 6174 does not automatically indicate that a taxpayer has violated tax laws.
IRS Letter 6174 Campaign Draws Attention From Crypto Tax Experts
Donnelly had previously identified an increase in Letter 6174 notices over a six-week period. At the time, he characterized the correspondence as a general warning intended to encourage taxpayers to examine their cryptocurrency reporting responsibilities.
He estimated that the IRS was distributing approximately 10,000 letters per month to individuals known to have engaged in cryptocurrency transactions.
“They send these letters out at roughly the rate of 10,000 a month, and they send them to people that they know have had cryptocurrency transactions. And it’s simply educational. That’s how the IRS looks at it. It’s an educational letter,” Donnelly said in his earlier assessment.
His more recent comments suggest that the campaign could also be encouraging taxpayers to revisit previous filings and make corrections where necessary. Nevertheless, the notices themselves do not establish that recipients have committed tax violations.
What IRS Letter 6174 Means for Cryptocurrency Investors
The IRS first introduced Letter 6174 in 2019. The notice informs taxpayers that the agency has information indicating they may have held one or more accounts containing virtual currency, but may not fully understand the reporting requirements associated with those assets.
The letter specifically states that the IRS has information that recipients have or previously had accounts containing virtual currency. Its definition covers cryptocurrency and other forms of virtual currency.
It also reminds taxpayers that they may need to file amended or delinquent tax returns if they failed to report relevant transactions for one or more taxable years.
However, Letter 6174 does not identify specific discrepancies or directly accuse recipients of underreporting income. Its purpose is to encourage taxpayers to review whether their previous filings accurately reflect their cryptocurrency activities.
Crypto Tax Expert Warns Against Rushing to Amend Returns
While the notices may prompt concern among cryptocurrency investors, Donnelly advised recipients against immediately submitting amended returns or additional information without first understanding their individual tax positions.
“DO NOT rush into amending tax returns or sending information to the IRS without understanding your position first. Letters 6174 and 6174-A generally do not require a direct response, but you should review the instructions carefully,” Donnelly said.
His warning highlights the distinction between an informational compliance notice and a formal request requiring a direct response. Taxpayers should examine the specific instructions in their correspondence and assess whether their previous cryptocurrency reporting was accurate.
Ripple Board Member Also Reports Receiving IRS Letter
Reports of recent notices have also appeared on X, where several users said they had received correspondence from the IRS.
Joel Schwartz, CTO Emeritus and a member of Ripple's Board of Directors, confirmed that he had received one of the letters by mail a few days earlier.
Schwartz indicated that he did not take further action after receiving it, describing the notice as a general reminder about legal compliance.
“Threw it right in the trash,” Schwartz posted. “It’s basically just a reminder to follow the law.”
The reports add to growing discussion about the IRS's cryptocurrency tax enforcement and compliance outreach. However, the receipt of Letter 6174 alone does not establish wrongdoing, and taxpayers should understand their reporting obligations before deciding whether any corrective action is necessary.
source: news ,bitcoin
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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The articles on Hokanews are here to keep you updated on the latest buzz in crypto, tech, and beyond—but they’re not financial advice. We’re sharing info, trends, and insights, not telling you to buy, sell, or invest. Always do your own homework before making any money moves.
Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.
