[Analysis] IRS is sending warning letters to US cryptocurrency owners

The IRS announced Friday that it started sending letters to taxpayers who own cryptocurrency, advising them to pay any back taxes they may owe or to file amended tax returns regarding their holdings. In a news bulletin, the agency said that it began mailing what it called “educational letters” last week. According to the statement, there are three variations of the letter that were sent. The IRS further said that it will have sent such letters to “more than 10,000 taxpayers” by the end of this month,” adding that “the names of these taxpayers were obtained through various ongoing IRS compliance efforts.”

James Foust, senior researcher at Coin Center, noted on Twitter that the IRS has repeatedly promised to publish and acknowledged the need for regulatory clarify on taxation of digital assets like Bitcoin and Ethereum. But no such guidance has been published, and now the IRS seems to be escalating its enforcement of improper tax filing.