IRS Crypto Audit Letters Skyrocket Amid Trump Tax Shield Allegations
The IRS has implemented a crypto tax audit system, sending warning letters to taxpayers it believes may have engaged in cryptocurrency transactions. According to Clinton Donnelly, an expert in U.S. crypto tax law and IRS audits, roughly 10,000 letters are being sent per month. These letters come in three types: Letter 6173, Letter 6174, and Letter 6174-A.
Letter 6174 is the least serious, serving as a compliance notice, while Letter 6174-A provides more detailed guidance on crypto tax obligations. Letter 6173 requires taxpayers to sign a statement under penalties of perjury confirming their compliance or explaining their tax treatment.
In contrast, an alleged arrangement involving President Donald Trump, the IRS, and Treasury officials is raising eyebrows, with CREW filing an amicus brief against the IRS on September 9th. The brief argues that this arrangement violates the Constitution's Domestic Emoluments Clause by protecting Trump, his family, and affiliated businesses from certain tax audits.