Start with your records, then set a review priority
Before reading anything about letter types, write down what you actually hold. The worksheet below is the whole point of this page: it tells you which record to pull next, and nothing else. It gives no odds that the IRS will write to you, because no record review can produce that number.
Your record-review checklist
Fill the top three fields without scoring them:
- Tax year you are reviewing: ______
- Number of exchanges and wallets used that year: ______
- Correspondence received, exact document number and any deadline printed on it: ______
Now give yourself one point for each task that is not finished:
| Point | Task |
|---|---|
| ☐ | Every account you used that year is written down, including ones you closed |
| ☐ | You have pulled the activity export each of those platforms makes available |
| ☐ | Movements between your own accounts are joined, so a transfer out matches a transfer in |
| ☐ | You have identified which purchases have no basis support behind them |
| ☐ | You have compared your recorded activity with what the filed return actually reported |
Total unfinished review tasks: ______
A zero means you keep this packet intact and stop. One or more means you work through the listed gaps, starting with the records you need before anything can reconcile. The total is a count of your own open work, not a risk percentage, not a high/medium/low rating, and not a figure the IRS uses.
One override sits above the score. If a Letter 6173 or a CP2000 arrived, that document's deadline path comes first, whatever your total says.
Compare higher- and lower-priority record patterns
Holding six accounts is not a finding against you. What raises review priority is whether the trail between them closes.
Two readers with identical account counts can be in completely different shape: one has every transfer joined end to end, the other has coins that left an exchange in March and reappear somewhere with no acquisition history attached.
That second pattern is the one I have spent the most hours on. Years ago a transfer between two exchanges landed in my own records with no history at all, and the receiving platform showed the full balance as if it had been acquired there that day. Nothing about that was a compliance problem; it was a reconstruction problem, and it took an afternoon of matching timestamps and amounts to fix.
The distinction that trips people up in filings is proceeds versus gain. A gross proceeds figure is what a sale brought in. Gain is what is left after basis.
A broker reporting the first number has not told anyone the second.
| Record area | Higher review priority | Lower review priority | Next check |
|---|---|---|---|
| Account inventory | List is partial; you are unsure whether a closed or barely-used account belongs on it | Every account used that year is written down, including closed ones | Add the missing platforms, then request exports |
| Transfer continuity | Movements leave one account with no matching arrival, or arrive with no origin | Each outbound movement is joined to its inbound side | Match by date, amount and asset before touching gains |
| Basis evidence | Purchase or acquisition support is missing for some holdings sold | Acquisition support exists for what was disposed of | Flag which lots lack support; that list drives the rest |
| Correspondence status | A letter sits unread or unclassified | You have identified the document and what it instructs | Read the document number and any printed deadline first |
This is editorial work prioritization. It sorts your afternoon, not your exposure.
Read the letter type before deciding whether to reply
Reader question first: I reported my crypto and a 6174-A still showed up. Do I mail something? Generally no direct reply is required for that letter, though you should review your return and correct any errors you find.
It is educational correspondence. It does not identify a specific form you missed, and receiving one is not proof that a particular 1099 exists somewhere with your name on it.
These are separate notice types, not rungs on a ladder. An educational letter is not a required warning shot before anything else, and its absence means nothing either way.
| Document | What it says | Direct reply | Records action |
|---|---|---|---|
| Letter 6174 / 6174-A | Educational crypto compliance contact | Generally not required | Review the return; correct any errors you find |
| Letter 6173 | Requests a response | Yes, by the deadline stated on the letter | Follow the letter's own instructions |
| CP2000 series | Identifies a third-party information mismatch and proposes a change; not a bill and not itself an audit | Yes, review and reply by the date on the notice | follow the CP2000 response steps if one arrived |
Those letter distinctions reflect how these notices work as of 2026.
What changed for tax years 2025 and 2026?
Form 1099-DA broker gross-proceeds reporting begins with digital-asset sales effected on or after January 1, 2025, with returns and payee statements generally arriving in 2026. Basis reporting starts later and narrower. It applies to qualifying covered digital assets sold on or after January 1, 2026, where the asset was acquired after 2025 and held continuously in that broker's custodial account.
Read those two conditions carefully, because they exclude a lot. A coin you bought in 2023 and sold through a broker in 2026 is not covered under that rule. Neither is one you moved in from a wallet and sold the same year.
For noncovered assets, basis reporting stays voluntary, so some brokers will supply it and some will not. Nothing here means every exchange reports every asset with basis (current figure at the IRS).
Separately, Notice 2025-33 extends broker backup-withholding transitional relief through calendar year 2026. That relief sits with brokers. It does not postpone gross-proceeds reporting, and it does not touch your own duty to report what you disposed of.
Internal Revenue Code section 6045 and Treasury Decision 10000's digital-asset broker regulations govern this reporting. The CP2000 series is the separate process the IRS uses to propose a change when third-party information does not match a filed return. Worth holding onto: a gross proceeds amount from a broker, on its own, does not establish taxable gain or trigger any obligation by itself.
Sources
- IRS Notice 2025-33, background on IRC 6045 and Treasury Decision 10000 digital-asset reporting, and the transitional-relief provisions (published June 12, 2025; retrieved September 26, 2026). Reporting duties and withholding relief are separate items in that document.
- IRS, Understanding your CP2000 series notice, for the proposed-change and response explanation. The 6173, 6174 and 6174-A details above rest on general knowledge of those letters as of 2026, not on this page.
- IRS Publication 1415, the tax-gap research reference, offered as general background for the comparison in the next section rather than as the citation for those specific percentages.
Why reporting statistics cannot predict your letter
There is a contrast people quote a lot from IRS tax-gap research, and as of 2025 the approximate figures run like this: roughly 99% reporting compliance for wages, which are subject to third-party reporting and withholding, against roughly 45% for income with little or no third-party information reporting.
The wage side bundles two things at once. Withholding and reporting travel together there, so you cannot pull out a clean effect of reporting alone. And these are population-level observations about historical income categories, not crypto compliance rates, not the odds a notice reaches you, and not the calibration behind the checklist above.
If your unfinished-task total is three, that number came from your own open work. Nobody's population statistic assigns you a probability.
Choose the next step your records support
The vague letter deserves a straight answer. A 6174-A that names no year, no transaction and no amount supplies no identified trigger, and there is no procedure available that traces a letter of that kind back to an unknown form. What you can do instead is inventory the years you have documentation for and work them, rather than guessing at a year-selection rule that does not exist.
Choose your next records step
- Did response-required correspondence arrive? (Letter 6173, or a CP2000.) Follow that document's own instructions and deadline. For a CP2000 specifically, follow the CP2000 response steps if one arrived. A 6173 recipient follows the 6173, not the CP2000 route.
- Educational letter only, or no formal notice? Go back to the checklist in the first section and score your unfinished tasks.
- Did the review turn up something you left off a return? Then correct an earlier unreported crypto item.
- Is the issue a TIN certification problem or a payout that came through reduced? That is a separate track: check a separate TIN or backup withholding issue.
- Inventory complete, nothing discrepant? Keep the packet together, filed where you can find it next season.
More than one branch can apply at once. When a live notice with a printed deadline is in play, it outranks everything else on this page, including a satisfying zero on the worksheet.
For the questions this page deliberately leaves to others, from reading a 1099-DA box by box to rebuilding basis, find the right crypto tax guide.
Mark your unfinished record tasks, keep any notice deadline first, and open the guide that matches the issue you actually found.
