IRS Letters to Poloniex Users in 2025 and 2026: Why Your 2016–2020 Tax Years Are Still Open for Audit

If you traded on Poloniex between 2016 and 2020 and received an IRS Letter 6173, 6174, or 6174-A in 2025 or 2026, you are not alone. We have heard from Poloniex customers who assumed the tax years in question were long closed. They aren’t—they are open for statute of limitations purposes, and may remain open for years to come. Under a provision most taxpayers—and a lot of tax professionals—have never heard of, the IRS’s clock on those returns has been paused for nearly four years.

Since 2014, Gordon Law has helped thousands of cryptocurrency investors respond to IRS scrutiny. Through a recent Freedom of Information Act request, we have confirmed the exact date the IRS closed its John Doe summons against Circle Internet Financial, Poloniex’s parent company. That date, and its effect on the time the IRS has to audit your return, is the key to understanding why 2025 and 2026 letters are now landing in mailboxes for tax years many readers thought were safely in the past.

This post explains what the FOIA production confirms, how IRC §7609(e) tolls the statute of limitations, and what you should do if one of these letters reached you. If you want the broader background on how the IRS is pursuing information from multiple exchanges, our earlier post on the Poloniex and Coinbase John Doe summonses walks through the full history.

Why Poloniex users are getting IRS letters in 2025 and 2026

In April 2021, the IRS served a John Doe summons on Circle Internet Financial, the parent of the Poloniex exchange. A John Doe summons lets the IRS request records about an entire group of unidentified taxpayers when the agency has a reasonable basis to believe the group has failed to comply with the tax laws.

The IRS normally seeks information about a specific taxpayer through a standard summons—one issued directly to the taxpayer, or to a third-party recordkeeper.  The IRS knows who it is after, and the taxpayer’s name is featured prominently on the summons itself.  By contrast, a “John Doe summons” is a third-party summons that “does not identify the person with respect to whose liability the summons is issued.” § 7609(f).  And that is because the IRS cannot identify the taxpayer—but it has a reasonable basis for believing that a group or class of unknown persons has failed to comply with internal revenue laws, and that the group does business with the financial institution that is subject to the summons.  Thus, it is usually captioned along the lines of “In the Matter of the Tax Liabilities of: John Does”.   A John Doe summons is a useful tool when, for example, the IRS knows that U.S. taxpayers maintain Swiss bank accounts in order to underreport their taxes, but does not know exactly who those taxpayers are.  That is what blew the lid off the secrecy of Swiss bank UBS-AG (and the entire Swiss banking system) a number of years ago.

In regards to cryptocurrency transactions, as opposed to Swiss bank accounts, the same tool was used against Coinbase several years earlier, and the Poloniex summons borrowed heavily from that playbook.

The Poloniex group was defined tightly. The summons targeted U.S. persons who held a Poloniex account at any point between 2016 and 2020 and had at least $20,000 in transactions in any one of those years. That is the pool from which the 2025 and 2026 letters are being pulled.

The IRS sends three flavors of “soft notice” to crypto holders:

• Letter 6174 tells you the IRS has information suggesting you may have had cryptocurrency transactions and reminds you of your reporting obligations. No response is required.
• Letter 6174-A is the same kind of soft notice, but signals a higher level of scrutiny, often hinting that follow-up action may come.
• Letter 6173 is the most serious of the three. It requires a response, typically either an amended return or a signed statement explaining why no correction is needed.

If you received one of these notices and you are not sure which version you have, our guides to responding to IRS crypto letters cover the mechanics of each version in depth.

The new wave of letters is notable because of the tax years they reference. Many of the 2025 and 2026 notices cite returns from 2016, 2017, and 2018. Under the normal three-year statute of limitations, those years would be long out of reach. The reason the IRS can still look at those returns comes down to one statute.

How IRC §7609(e)(2) pauses the statute of limitations

The IRS normally has three years from the date you filed a return to assess additional tax under IRC §6501(a). If you omitted more than 25% of your gross income, the window stretches to six years. For most crypto traders, a missing Poloniex trade (even a loss transaction) or unreported income event will comfortably exceed that 25% threshold.

IRC §7609(e)(2) adds a further wrinkle. When the IRS serves a John Doe summons and the summoned party has not fully complied within six months, the statute of limitations on assessment is suspended for every person in the John Doe class. “Tolling” is a legal word for pausing the clock. The clock does not stop at the date of service of the summons. It stops at the six-month anniversary of service, and it starts running again only when the summons is finally resolved.

For Poloniex, the math is now concrete:

• Summons served: April 9, 2021
• Tolling began: October 9, 2021 (six months after service)
• Final resolution: September 8, 2025 (Circle released by the IRS)
• Total tolling period: 1,430 days, or roughly 3 years and 11 months

The IRS’s own Internal Revenue Manual, at IRM §4.63.4.9.7, walks through this calculation step by step. For each open tax year, you take the number of days remaining on the statute of limitations on the day tolling began (October 9, 2021), and you add that number of days to the day tolling ended (September 8, 2025). That gives you the new assessment deadline.

The manual includes one important exception: if the normal statute of limitations for a given year expired before tolling began, the suspension cannot revive it. A closed year stays closed from audit.

What the tolling means for your 2016–2020 tax year

Running the IRM formula against each of the Poloniex summons years produces the following revised deadlines:

*The 2020 individual return filing deadline was extended to May 17, 2021 because of the COVID-19 outbreak, which shifts the corresponding assessment deadlines.

Two points stand out.

First, the three-year windows for 2016 and 2017 were already closed when tolling began, and they stay closed. That is the one piece of good news.

Second, the six-year window applies whenever a taxpayer omitted more than 25% of gross income from the return. For a Poloniex customer who failed to report trading gains that year, this threshold is often met without much difficulty. Under that longer six-year statute, every year from 2016 through 2020 remains open for assessment today, and most will remain open through 2029, 2030, or even 2031.

That is why the 2025 and 2026 letters can legitimately reach back to tax years most people assumed were beyond the IRS’s grasp. The letters are not a mistake. They accurately reflect the tolled deadlines.

What you should do next if you received a letter

If an IRS letter about virtual currency arrived in your mailbox and you had a Poloniex account between 2016 and 2020, take the following steps in order:

1. Do not ignore the letter. Even soft notices (Letter 6174 and 6174-A) are a signal that the IRS has your information and is watching. A Letter 6173 requires an affirmative response, and missing the deadline can trigger a tax audit or worse.
2. Identify the tax years at issue. Read the letter carefully. It may reference specific years, or it may speak generally. Match those years against the table above to understand whether each is still open.
3. Pull your original returns and your Poloniex transaction history. Compare what you reported against what actually happened on the exchange. If you used crypto tax software at the time, confirm the numbers tie out.
4. Assess whether you have a substantial omission. The six-year statute applies only where more than 25% of gross income was omitted. An experienced crypto tax attorney can tell you quickly whether this threshold is likely to matter for your return.
5. Decide whether to amend, respond, or disclose. Depending on the facts, your best option may be a carefully drafted amended return, a response under penalties of perjury, or a voluntary disclosure. These are not interchangeable, and the wrong choice can make the situation worse.
6. Get representation before you write back. Anything you tell the IRS in response to one of these letters becomes part of your file. A tax attorney can help you respond accurately without creating new exposure.

Every situation is different, and the right response depends on the specific facts of your returns and your Poloniex activity. Speak with a tax attorney before you take action.

How Gordon Law can help

Frequently Asked Questions

Does this apply if I never received an IRS letter?

Yes. The tolling under IRC §7609(e)(2) applies to every taxpayer in the John Doe class, whether or not the IRS has sent a personalized notice. If you held a Poloniex account between 2016 and 2020 with $20,000 or more in transactions in any of those years, the IRS can still act within the extended windows shown above. A letter is one signal; the absence of a letter is not a safe harbor.

What if I already reported my Poloniex transactions correctly?

If every taxable event on Poloniex was properly reported and you paid the tax owed, a soft notice like Letter 6174 or 6174-A does not require a response. That said, we recommend a careful review of the underlying returns before concluding that no action is needed. A single missed transaction or cost-basis error is easy to overlook, and documentation matters if the IRS follows up.

Will filing an amended return start a new statute of limitations?

Filing an amended return does not reset the original assessment statute of limitations. In most situations, an amended return filed within the open period will be processed on the existing clock. However, amending a return close to the statute’s expiration can have strategic implications, including where the three-year period runs from the date the return was actually filed. Discuss timing with a tax attorney before filing.

What counts as a “substantial omission” for the six-year statute?

Under IRC §6501(e), the six-year period applies when a taxpayer omits more than 25% of the gross income reported on the return. Unreported crypto gains count toward this threshold. For many retail crypto investors who traded actively in 2017 or 2018 and failed to report those gains, the 25% threshold is easily crossed. Whether it applies to your specific return is a fact question that should be reviewed before you decide how to respond.

Can the IRS still open a criminal case against me?

IRC §7609(e)(2) also suspends the six-year criminal statute of limitations under IRC §6531. For willful tax evasion or failure to file, that statute has been tolled on the same schedule. Where criminal exposure is a real concern, an IRS voluntary disclosure may be worth considering. This is a decision that should be made with counsel, not on your own.

What if my Poloniex account/transactions fell below the $20,000 threshold?

The John Doe summons class was defined as U.S. persons with at least $20,000 in Poloniex transactions in any year from 2016 through 2020. If none of your individual years crossed that line, you are technically outside the summons class, and §7609(e)(2) tolling does not apply to you. That said, the IRS has other ways to identify unreported crypto activity, including Form 1099-DA reporting that began in 2025. Falling outside the class is not a reason to leave unreported gains on your return.

Sources

• IRS letter releasing Circle Internet Financial from the Poloniex John Doe summons, September 22, 2025, FOIA production 2026-08191 (on file with Gordon Law).
• In the Matter of the Tax Liabilities of John Does, Case No. 1:21-mc-91201-RGS (D. Mass. April 1, 2021).
• IRC §7609(e)(2) — Suspension after 6 months of service of summons.
• IRC §6501(a) and (e) — Limitations on assessment and collection.
• IRC §6531 — Periods of limitation on criminal prosecutions.
• IRM § 4.63.4.9.7 — Statute Considerations for John Doe Summonses.
• IRS Letter 6173, Letter 6174, and Letter 6174-A.