The IRS has sent 10,000 compliance letters to cryptocurrency holders who may have underreported digital asset income, signaling the most aggressive crypto tax enforcement campaign in the agency's history.
Who's Being Targeted
- 10,000 CP2000 letters sent in Q1 2026
- Targeting unreported exchange transactions over $10,000
- DeFi income (staking, farming) a key focus
- NFT profits from 2021-2023 boom
What to Do If You Receive a Letter
Don't ignore it. Respond within 30 days, gather all exchange transaction records, and consider hiring a crypto-specialized tax attorney. Voluntary disclosure before an audit can significantly reduce penalties.