IRS letters 6173, 6174 & CP2000: what they mean, and what to do next
If one of these landed in your mailbox, the IRS already has data tying you to crypto. Here's how the three letters differ, what each is really asking, and where to put your attention first.
Getting a letter from the IRS about crypto is unsettling. The good news: most of these letters are not accusations, and none of them are the end of the road. They are the IRS telling you what it already sees. What you do next is what matters, and it's usually fixable.
Three letters come up most often. They look similar, but they ask for very different things. Start by finding the number in the top or bottom corner of the notice.
The three letters, side by side
6174 and 6174-A: read it, then verify
The 6174 is the gentlest of the three. It doesn't require a response, and it isn't saying you did anything wrong. It's a nudge. The 6174-A is a slightly firmer version of the same idea, warning that the IRS may follow up.
Treat either as a prompt to check your own history. Pull your exchange records for the years in question and confirm that what you reported lines up. If it does, you're done. If it doesn't, it's far better to correct it on your own terms than to wait.
6173: this one has a deadline
A 6173 is not optional. It asks you to respond by a specific date and to either confirm you already reported your crypto correctly or bring your filings into line. The response typically includes a statement signed under penalties of perjury, so accuracy matters more than speed.
Missing the date is the real risk. A non-response can escalate to an examination. If the deadline is close and your records are incomplete, that's the moment to get a professional involved rather than guess.
The people who answer these letters for a living know what a clean response looks like. We'll match you with one.
Get matched with a pro who handles it →CP2000: a proposal, not a verdict
A CP2000 is the underreporter notice. An exchange reported activity to the IRS that doesn't match your return, so the system proposed an adjustment, often a larger tax bill. It can look alarming because it shows a number, but it is a proposal you can respond to.
The figure is frequently too high, because the IRS usually sees proceeds without your cost basis. If you bought at $9,000 and sold at $10,000, an unadjusted notice may treat the whole $10,000 as gain. Showing your basis is how that number comes down.
What a good CP2000 response includes
- The response form from the notice, marked to agree or disagree.
- Your cost basis, transaction by transaction, with records that back it up.
- A short, plain cover letter explaining the difference.
- Everything postmarked before the response date on the notice.
What to do this week
- Find the number. 6174, 6173, or CP2000. It decides everything that follows.
- Note the deadline. If there's a response date, put it somewhere you'll see it.
- Gather your records. Exchange exports and wallet history for the years named.
- Don't ignore it, and don't panic-file. A rushed, wrong response can create new problems.
- Get help if the years are messy. Multiple exchanges, DeFi, or missing basis is exactly when a specialist earns their fee.
These letters are common, and they are answerable. The worst outcomes come from silence, not from the crypto itself.