In the last decade, more and more people have been investing in cryptocurrency. As it became more popular, the IRS started asking U.S. taxpayers to report their cryptocurrency earnings. Letters 6173 and 6174 from the IRS both concern cryptocurrency, and you should know what to do if you receive one of these notices.
What Does LT6173 or LT6174 from the IRS Mean?
Although both Letters 6173 and 6174 are about cryptocurrency, the IRS sends them for slightly different reasons.
· Letter 6173: The IRS sent this letter to you because it believes you’ve failed to report crypto income or you have delinquent returns. It’s also possible that you did indeed file your returns but left out an important form or schedule.
· Letter 6174: Letter 6174 is simply a notice from the IRS stating that it knows you have crypto accounts. The letter should explain the taxation policy concerning cryptocurrency transactions. You might also receive Letter 6174-A, which means the IRS suspects you haven’t filed crypto income but isn’t sure.
What to Do When You Receive Letters 6173 or 6174
Depending on which letter you receive, you’ll need to act quickly.
· Letter 6173: You’ll have 30 days to respond to the letter. You must either file delinquent returns or amend erroneous returns. If you think the IRS is mistaken, you must send a statement of facts. You can also request an extension to the 30-day time limit.
· Letter 6174: If you received Letter 6174, you probably won’t have to take immediate action. You may still want to review your tax filings to ensure that everything is in order, particularly concerning your crypto accounts.
A Maryland Tax Attorney Can Help
Since cryptocurrency is still relatively new, many people aren’t aware of their tax obligations in this area. To be sure that you comply with the IRS, you can seek advice from a reliable Maryland tax attorney like Gabaie & Associates. We assist taxpayers in Baltimore, Columbia, Frederick, and Rockville with all kinds of tax issues, including cryptocurrency. Call us today at (410) 358-1500 or submit your information in our contact form.
