Crypto bros are freaking out amid a surge in letters from the Internal Revenue Service about their digital currency holdings.
As Bitcoin.com and other sites report, there has been a whopping 758 percent spike in customer mentions of IRS letters over the past two months alone, suggesting that there may be a taxation crackdown in progress.
We don’t know exactly how many people have gotten these troubling letters — but apparently, there are a few different types going out.
According to Coinledger, the crypto tax software firm that compiled the new numbers, recipients either received letters 6174 or 6174-A, which are sent as warnings and require no response, or CP2000, in which the IRS has already decided how much you owe and can punish you for not doing so.
As Coinledger CEO David Kemmerer told Bitcoin.com, a lot of the people being contacted by the IRS have long reported their crypto holdings to the agency — but the precedent it sets is pretty strange regardless.
“We’re seeing a wave of confusion and fear among everyday crypto investors, many of whom made their best effort to report taxes accurately,” Kemmerer said. “This kind of enforcement is only going to accelerate.”
As demonstrated by a disgruntled user posted on the r/cryptotax subreddit earlier this year, those who have steadily reported their crypto holdings over the years appear to be the first wave to get these scary letters.
“I believe I have reported all my crypto transactions with my CPA,” the user noted. “[I’ve] been reporting them for years. I’m not sure what to do with this letter as I think I have correctly filed everything.”
To Kemmerer’s mind, targeting those sorts of individuals may be an error.
“The IRS has more visibility into crypto than ever before,” he said. “But without accurate cost basis data, even compliant investors can get mistakenly flagged.”
Coincidentally enough, these IRS actions come after president Donald Trump’s administration ordered the government-sponsored lenders Fannie Mae and Freddie Mac to consider crypto holdings as assets when assessing mortgage loans. As the prediction marketplace Polymarket joked on X, that means the country’s biggest lenders will now be forced to assess “Fartcoin” and other dumb meme tokens when considering creditworthiness.
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