🚨I need to sound the alarm on something!

The IRS has been issuing what’s known as Letter 6173. This letter typically references a potential failure to report all cryptocurrency income between 2016 and 2020. The recipient is instructed to review their records and sign a form under penalty of perjury, confirming the accuracy of their tax returns. If the form is not returned, the IRS warns that the case may be referred for an audit.

The letter is deliberately vague about which year—2016 to 2020—it pertains to. Most taxpayers are protected by a three-year statute of limitations for audits. However, the IRS can extend this period under two conditions:

- If income was underreported by more than 25%.

- If fraud is suspected.

Signing and returning the form effectively invites scrutiny. By signing, taxpayers risk opening the door to a fraud investigation, which eliminates statute of limitations protection. Fraud investigations can extend indefinitely, leaving taxpayers vulnerable.

My strong recommendation to anyone receiving Letter 6173 is not to sign or return it. Ignoring the letter does not automatically result in an audit; instead, the burden remains on the IRS to prove their case within the statute of limitations. By signing, you risk surrendering critical protections.

Letters like this were also issued in 2020, yet to my knowledge, no audits followed. These seem to be scare tactics designed to pressure taxpayers into compliance.

It’s disheartening that the U.S. government resorts to such measures to collect taxes. I hope the incoming #Trump administration takes steps to eliminate these underhanded techniques.

Stay vigilant and know your rights. Letter 6173 is more about intimidation than enforcement.

Please share this information. Knowledge is power!

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