A spokesman for the IRS, who requested anonymity because of agency rules, said that the latest letters will go out to a taxpayer any time the agency detects a mismatch between the trading profits or losses that taxpayers report on their returns and what third parties report to the IRS through forms known as 1099-B.
The person declined to say how many crypto taxpayers had received the latest letter, but added that they typically go out one or two years after a taxpayer has filed a return.
The IRS deemed crypto assets to be property rather than currency in 2014, the last time its only substantive guidance came out. That means the agency taxes crypto profits and losses like those for stocks, at capital gains rates.
IRS Commissioner Charles Rettig has promised further guidelines about how to record cryptocurrency transactions on tax returns. Accountants have said that the lack of official rules from the agency has meant many crypto investors and their tax advisers frequently have to guess at how to comply with the law and pay all the tax they owe.
This article was provided by Bloomberg News.