In the past two months, the number of warning letters from the U.S. Internal Revenue Service (IRS) for crypto investors has surged by 758%. This raises concerns among everyday investors.
Surge in IRS Warning Letters
According to CoinLedger, there has been a dramatic rise in the number of warning letters from the IRS for crypto investors over the past 60 days. This increase is corroborated by various accounting firms like Taxing Cryptocurrency.
Causes of Investor Confusion
Many investors who have received warning letters are shocked, believing they have filed their taxes correctly. According to Ben Yoder of CoinLedger, confusion often stems from wallet-to-wallet transfers and missing cost basis data, which can trigger IRS alerts even without tax evasion.
Future of Tax Scrutiny in the Crypto Space
Amid intensifying tax scrutiny, CoinLedger CEO David Kemmerer warns that the surge in warning letters could signal the start of a broader enforcement effort ahead of new reporting rules for crypto brokers, set to take effect in 2026.
Given the rise in IRS warning letters, experts advise crypto investors to maintain accurate records, proactively track taxable events, and seek professional help if they receive serious notices from the IRS.
