Letter From The IRS To Taxpayers With Virtual Currency

Letter From IRS On Digital Currency

Reporting Virtual Currency Transactions

Have You Received This Letter From The IRS Recently?

Dear [Name]:
Why we’re writing to you. We have information that you have or had one or more accounts containing virtual currency and may not have
met your U.S. tax filing and reporting requirements for transactions involving virtual currency, which include cryptocurrency and non-crypto virtual currencies.

Virtual currency is considered property for federal income tax purposes. Generally, U.S. taxpayers must report all sales, exchanges, and other dispositions of virtual currency. An exchange of a virtual currency (such as Bitcoin, Ether, etc.) includes the use of the virtual currency to pay for goods, services, or other property,
including another virtual currency such as exchanging Bitcoin for Ether. This obligation applies regardless of whether the account is held in the U.S. or abroad. More information can be found on www.irs.gov and in Notice 2014-21, found at www.irs.gov/pub/irs-drop/n-14-21.pdf, which describes how general tax principles
for property transactions apply to transactions using virtual currency.

For one or more of tax years 2013 through 2017, we haven’t received either a federal income tax return or an
applicable form or schedule reporting your virtual currency transactions.

What you need to do by the “respond by” date above

Take one of the following actions:

• If you failed to file one or more income tax returns, file the delinquent returns and report your virtual
currency transactions as soon as possible. For more information see www.irs.gov/filing.
• If you made a mistake on your income tax return, such as not reporting your virtual currency transactions
or incorrectly calculating your income, gain, or loss; you can file an amended return. For more information, visit www.irs.gov/forms-pubs/about-form-1040x
• If you believe you followed all tax and information reporting requirements relating to your virtual currency
accounts, mail or eFax the following to the address or eFax number shown at the top of this letter.

– A statement of facts explaining your position. Include a complete history of previously reported income
from your virtual currency transactions. Explain the actions you took to become compliant with U.S. reporting requirements and provide copies of previously filed documents that confirm your compliance.

– Your contact information, including your telephone number, complete address, and the address where
you receive mail (if different).
Letter 6173 (6-2019)
Catalog Number 72154R

– The following statements with your signature and date:
I,_______________ , declare under penalties of perjury that I have examined this entire document, including all attachments and accompanying statements, and that the enclosed is
true, correct, and complete.

I also understand with respect to any submission that the IRS reserves the right to make further contacts with me and my representatives to clarify any written explanation or any other documents. Statements and documents sent under this option will be checked against information received from banks, financial
advisors, and other sources for accuracy.

Signature Date______________

Please note that there is a 10MB limit for data sent to the eFax number. If your electronic file exceeds this size, either mail your documents or fax the information in multiple, smaller transmissions to fit the size requirements.

Do not send original returns or amended returns for processing via eFax. Instead, send original returns to the address below and include a copy in your response to this letter. Write “Letter 6173” at the top of the first page of the amended or delinquent return. Mail the originals to:

Internal Revenue Service
2970 Market Street
Philadelphia, PA 19104

If you need more time, send a request for a 30-day extension to the address above by the “respond by” date shown at the top of this letter.

If we don’t hear from you by the “respond by” date
We may refer your tax account for examination. Please be aware that underpayments of tax are subject to interest and penalties.
Someone may represent you
If you want someone to represent you in this matter, send a completed Form 2848, Power of Attorney and Declaration of Representative, with your response to the address above.

Additional information
You can find the forms and publications for reporting your virtual currency transactions by visiting our website at www.irs.gov/forms-pubs or by calling 800-TAX-FORMS (800-829-3676).

If you have questions, you can call the hotline telephone number shown at the top of this letter and leave a message. We’ll respond to all messages within three business days.
Thank you for your cooperation.

Program Manager

TaxConnections Admin

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