IRS Floods US Crypto Users With Notices — What You Need to Know

Crypto investors across the US are facing renewed scrutiny from the Internal Revenue Service (IRS), which has sent out a surge of warning letters over the past two months.

The letters, according to tax experts, suggest that the agency is ramping up enforcement after identifying discrepancies in recent tax filings tied to digital asset transactions.

Fortune reported Sunday that the volume of notices has jumped significantly compared to last year, citing crypto tax professionals.

Crypto Tax Experts Report Surge in IRS Letter Inquiries Since May

CoinLedger, a popular platform that helps users file crypto taxes, reported nearly 800 support queries mentioning “IRS letters” between May and June. That is roughly nine times the number it saw during the same period in 2024.

Crypto tax attorneys are also seeing a sharp rise in outreach. Jordan Bass, an accountant and attorney, said his firm received at least 10 inquiries in the last two months. The year before, he saw none. Another lawyer, Andrew Gordon, said his office is now fielding several such calls each week.

This uptick is reminiscent of previous IRS crackdowns. In 2020 and 2021, the agency sent out a wave of compliance letters after securing data from major exchanges like Coinbase. That campaign followed a 2017 court order compelling Coinbase to hand over thousands of customer records.

Poloniex Link Suspected as IRS Letters Target Past Users

The latest letters vary in tone and urgency. Two versions advise recipients to review whether they properly reported crypto transactions. They do not require a response. A third version is more direct, instructing investors to submit new or amended returns or explain why their existing filings are accurate.

Though it remains unclear what triggered the latest round, some suspect a link to Poloniex. Gordon and Kemmerer noted that many recent letter recipients had accounts with the exchange. That could suggest the IRS obtained new transaction data, though the agency has not confirmed this.

I’m sure there’s just people randomly getting selected, and the lucky ones get these scary letters,” CoinLedger’s CEO David Kemmerer, noting that outreach typically increases after such access.

Under US law, crypto investors must report all taxable transactions. This includes selling or swapping coins, receiving income from staking or mining, and even gifts above certain thresholds. Losses can be claimed too, but failing to declare gains can carry stiff penalties.