IRS FORM LETTER 6174
The IRS is now sending letters to try and scare and trick people into responding or reporting cryptos when they are not reportable. It’s a form letter, Form 6174 titled “Reporting Virtual Currency Transactions”. This is nothing but a sales letter.
It begins with, “We have information that you have or had one or more accounts containing virtual currency…”. This is a lie; if the IRS received such information you would have received a 1099, a copy of the one reported to the IRS.
It goes on to say “… if you believe you didn’t accurately report your virtual currency … you should file amended returns…”
You don’t have to read any further because this letter requires NO response whatsoever and if you want to discuss it with your accountant, he or she will try and scare you into reporting something that is not subject to reporting at all. If you get this letter, ignore it. The only communication that is important is the 1099 form, and we’ve already proven the correct response to the erroneous 1099 reports in the December 2018 article further back in this blog.