How it works
Letter 6174-A is a step up from Letter 6174. It says the IRS believes you may not have properly reported digital asset transactions and that it may follow up with enforcement action, including an examination. Like Letter 6174, it has no deadline and does not require a reply.
Why it matters
The warning language suggests the IRS has more specific information about you than a 6174 recipient. Correcting prior years before an examination opens generally carries lower penalties than waiting, and an amended return filed before IRS contact may qualify for relief from the 20 percent accuracy-related penalty.
Example
A taxpayer who received Letter 6174-A reviews his exchange history with counsel, finds two unreported years, and files amended returns. When the IRS later opens an examination, the years are already corrected.
Related: Letter 6174, Letter 6173, accuracy-related penalty. Read more: IRS crypto letters and how to react.
Got this notice? Have a tax attorney review it before you reply.
