IRS Targets Taxpayers Suspected of Virtual Currency Non-Compliance

On July 26, 2019, the IRS released IR-2019-132, stating that it has started sending out warning letters to taxpayers suspected of incorrectly reporting virtual currency transactions. The IRS noted that by the end of August, more than 10,000 taxpayers will receive these letters.

The IRS clarified that these are "educational letters" which come in three variations: Letter 6173, Letter 6174, and Letter 6174-A. All three versions are supposed to assist taxpayers in getting compliant and correcting errors.

The IRS emphasized that taxpayers who incorrectly report their virtual currency transactions may be subject to tax, penalties and interest-and, in some cases, criminal prosecution.

The IRS gave every indication that virtual currency transaction non-compliance is considered a high threat to the tax system and that it is expanding its efforts to address this problem. According to IRS Commissioner Chuck Rettig: "[t]he IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."

Significantly, taxpayers should understand that these letters should be taken seriously. Taxpayers should promptly review their returns and, if necessary, file amended returns. Ignoring these letters could create even bigger problems.

If you are concerned that you may have misreported a virtual currency transaction, give us a call to discuss the most favorable approach to come into compliance.

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1050 Connecticut Ave NW #500
Washington, D.C. 20036

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 202-618-1873
Phone: 703-988-4817
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 202-618-1873
Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 202-618-1873
Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map