The Internal Revenue Service wants its crypto tax revenue, and it’s waging an offensive to get it. Letters 6174, 6174-A, and 6173 were the agency’s opening salvo in its fight to claw back token-related taxes. And now, it’s sent Letter CP2000 to everyone suspected of remitting the incorrect amount of crypto capital gains taxes.
IRS Is On The Prowl for Crypto Capital Gains
The IRS is working hard for its (crypto tax revenue) money. The agency has powerful new data comparison tools, and its ability to unearth evaders is amped.
This time, it appears the IRS compared taxpayer returns to data submitted by wallets and exchanges via 1099-Bs and 1099-Ks. People with discrepancies got letter CP2000. (We should mention that CP2000 Letters go out for myriad reasons, crypto tax discrepancies is just one.)
CP2000 notices state the amount the IRS believes the recipient owes, which includes accrued interest.
If you receive the letter, the amount is correct, and you want to pay the debt and be done with it, then fill out the form and remit it with a check. Voila. You’re done.
Note, however, that 1099-Ks are notoriously inaccurate, and they’re part of IRS’s calculation. With that in mind, if you want to contest the amount, first, enlist a cryptocurrency accountant, and don’t throw away the form. You’ll need it to file a challenge. Moreover, before you hire a professional, gather any supporting documentation. The more you can provide upfront, the faster the process.
Connect with a Cryptocurrency Tax Accountant
Contact our team of cryptocurrency lawyers if you’ve received IRS Letter CP2000 and want to:
- make sure the IRS’ figure is accurate;
- contest the assertion; or
- establish a payment plan for the amount owed.
We’ll negotiate with the IRS and get the job done so you can breathe a sigh of relief.Contact a Crypto Tax Lawyer »