Over the past few years, the IRS has been slowly issuing guidance and warnings regarding the reporting and taxation of the usage and exchanging, of virtual currency. Recent news from the IRS to those who have engaged in the world of virtual currency usage was received on July 26, 2019 when the IRS advised that they have begun sending educational letters to taxpayers with virtual currency transactions who either may have failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly.

The educational letters are as follows:

Letter 6173;

Letter 6174;

Letter 6174-A,

IRS Commissioner Chuck Rettig  advised  "Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties," said. "The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations."