Crypto investors are poised for record returns on Bitcoin and other digital assets—and so, too, is the taxman. The Internal Revenue Service has sent U.S. crypto investors a flood of warning letters about their digital asset investments over the past two months. The volume of letters—which warn taxpayers that crypto investments they declared on their recent tax returns may not be accurate—are an increase over the past year, according to three crypto tax experts.
CoinLedger, a crypto tax platform, has seen a spike in users asking about the government communiqués. The number of support conversations on CoinLedger that included the words “IRS letters” from May through June numbered close to 800, a ninefold increase compared to the same period in 2024, David Kemmerer, cofounder and CEO of the tax website, told Fortune.
“Thousands of investors are getting these,” he claimed. “Naturally, when that happens, we get a flood of customers coming to us being like, ‘Hey, what do I do?’”
Two crypto tax attorneys have also noticed an uptick in inquiries about the letters. At least 10 recipients have reached out to his firm over the past two months, said Jordan Bass, a crypto tax attorney and accountant. That’s compared to no inquiries sent to his office in 2024.
Andrew Gordon, another attorney who specializes in crypto tax law, also said he’s seen an increase. “We’re getting at least a couple calls a week,” he said.
The three crypto tax experts said they haven’t seen such an uptick in crypto inquiries from the IRS since the tax agency sent out a flood of letters in 2020 and 2021. In 2017, the IRS obtained thousands of customer records from the U.S. crypto exchange Coinbase as the result of a court order. Two years later, the tax agency devised a set of crypto-specific “voluntary compliance” letters that it then sent out to investors.
The notices tell crypto owners that the IRS has information that the recipients had “one or more accounts containing virtual currency.” In two versions off the letters, the tax agency merely advises investors to check to see if they’ve correctly reported their crypto transactions to the IRS. Recipients are not required to respond.
But in the case of a third type of IRS letter, recipients are instructed to respond to the IRS with either new tax returns, amended tax returns, or an explanation of why recipients believe they’ve correctly reported their crypto transactions to the U.S. government.
The CoinLedger CEO and the two crypto tax attorneys did not know why more investors have reached out to them about IRS letters in 2025 as opposed to years prior. Gordon, one of the tax attorneys, noticed that a common factor linking recent recipients were that they had accounts on the crypto exchange Poloniex.
Kemmerer, the CEO of CoinLedger, echoed Gordon and said that increased IRS outreach to crypto investors “typically follows when the IRS has gotten their hands on some amount of data.”
The IRS did not immediately respond to a request for comment.
“I’m sure there’s just people randomly getting selected, and the lucky ones get these scary letters,” added Kemmerer.
