IRS Letter 6173: what it says about your crypto
An IRS virtual currency letter says the agency has information about your crypto, names tax years and a deadline, and asks you to file or correct a return.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- The IRS treats digital assets as property.
- Sales, swaps, spending and income are reportable; holding is not.
- Ignoring the letter can lead to a follow-up notice or exam.
The IRS has sent virtual currency compliance letters since 2019. Yours names the tax years and the response deadline.
What is the IRS letter?
The letter states that the IRS has information about your virtual currency activity. It asks you to file or correct a return and explain the crypto transactions it lists. The agency calls this a compliance letter, not a criminal charge.
Which crypto transactions does it cover?
The IRS treats digital assets as property, so sales, swaps, spending and income are reportable. Buying and holding with dollars is not.
What tax years and deadline apply?
The letter names the tax years to address and a deadline for your response. Both are printed in the letter.
- Read the tax years listed in the letter.
- Note the response deadline.
- Gather returns and records for those years.
What happens if you ignore it?
If you do not respond, the IRS may send another notice or open an examination of the listed years. The IRS can also assess penalties and interest if tax is owed.
- Whether a return was filed for each year.
- Whether the listed transactions were reported.
- Whether tax is owed for those years.
Frequently asked questions
Some IRS virtual currency letters are educational. This one asks you to file or correct a return.
If your return already reported the transactions correctly, explain them in your response.
Records of what you acquired, what you sold or exchanged, the dates and the gain or loss.
The letter is not a penalty notice, but the IRS can assess penalties and interest if you owe tax.
