The IRS is clamping down on those who purchased and sold cryptocurrency and failed to report those transactions on their returns. The IRS has been sending either Letter 6173 or 6174 or 6174-A to nudge taxpayers with unreported cryptocurrency transactions into tax compliance without being subjected to tax audits or examinations. These letters are intended to encourage taxpayers to come clean by amending their returns to include properly reported crypto transactions.
Generally, the IRS looks favorably at those taxpayers who fix their returns before the IRS becomes aware of their noncompliance or before an audit has commenced. Don’t wait to receive these IRS Crypto letters but rather move expeditiously to educate yourself about how to report these transactions on your return and Chemrick stands ready to provide you with professional assistance if required.
To help taxpayers understand and comply with the tax law, the IRS recently elaborated on its basic guidance issued in 2014 through issuance of Revenue Ruling 2019-24 and providing answers to frequently answered questions (FAQ). The IRS views cryptocurrency as property and therefore a taxable event is created when it is exchanged for cash or another cryptocurrency.
If you live in Stamford, Darien, Norwalk, New Canaan, or anywhere else in Lower Fairfield County of Connecticut and beyond, and need help amending your returns to properly report cryptocurrency transactions in your tax returns, please contact Chemrick today at 203-722-9244 or by email at firstname.lastname@example.org for a phone consultation on the best way forward.
Patrick “Chemrick” Chemngorem, CPA, MT
Chemrick Tax Resolution LLC