How it works
Letter 6173 is the one IRS crypto compliance letter that requires a response by a stated deadline. It says the IRS has information suggesting you did not report digital asset transactions correctly and asks you to file or amend returns, or to explain under penalties of perjury why your filings are correct. If the IRS does not hear from you, it may refer your account for examination. The other two letters, 6174 and 6174-A, are educational and need no reply.
Why it matters
The response is a signed statement to the IRS. Ignoring it can lead to an examination, and answering it carelessly can create a record used against you later. The letter usually follows a summons or broker data, so the IRS often already has specifics.
Example
A taxpayer receives Letter 6173 covering 2019 through 2021. Rather than responding directly, she engages counsel, who obtains her IRS transcripts, reconstructs the years under privilege, and files amended returns with a cover response before the deadline.
Related: Letter 6174, Letter 6174-A, attorney-client privilege. Read more: IRS crypto letters and how to react.
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