How it works
Letter 6174 says you may have unreported virtual currency transactions and explains how to correct them. Letter 6174-A is similar but adds that the IRS may follow up with enforcement. Neither has a deadline or requires a response. Both mean the IRS has your name from an exchange, a summons, or broker reporting.
Why it matters
These letters are the last quiet moment before enforcement. Correcting prior years before an audit opens generally produces lower penalties than waiting, and the correction can be prepared under privilege.
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 6173. Read more: the three IRS crypto letters compared.
