As crypto prices see a new rebound with Bitcoin (BTC) leading the pack, US investors are not only anticipating significant returns on BTC and other digital assets but also facing increased scrutiny from the Internal Revenue Service (IRS).
In the past two months, the number of these warning letters has spiked, signaling a renewed focus on digital asset reporting. Crypto tax experts have noted that this uptick is markedly higher than in previous years.
Kemmerer explained, “Thousands of investors are getting these letters. Naturally, when that happens, we see a flood of customers coming to us asking, ‘What do I do?’”
Bass mentioned that his firm received inquiries from at least ten recipients of the letters in the last two months, a significant increase from the previous year when no inquiries were reported.
The latest notices inform recipients that the Internal Revenue Service possesses information indicating they hold “one or more accounts containing virtual currency.”
While some letters advise recipients to review their reporting for accuracy, others require a response, either through amended returns or explanations justifying their reported transactions.
Kemmerer speculated that the increased outreach from the IRS typically follows the agency acquiring new data, suggesting that the notices might be part of broader enforcement efforts. “I’m sure there are just people randomly getting selected, and the lucky ones get these scary letters,” he said.
Featured image from DALL-E, chart from TradingView.com
