Pat Mustard

UPDATE: Six weeks ago, I warned that the IRS was dramatically increasing the number of Letter 6174 notices being sent to crypto traders. What we've seen since then is alarming. Dozens more people, including our own clients, have contacted CryptoTaxAudit after receiving these exact letters. This is no longer an isolated handful of cases. Based on the volume we're seeing, I believe the IRS is conducting another large-scale mailing campaign targeting crypto taxpayers. Here's what you need to understand: IRS Letter 6174 is a voluntary compliance letter. It means the IRS has information about your cryptocurrency activity and wants you to review whether you've met your tax reporting obligations. It is NOT an audit. In my view, these letters are designed to put pressure on crypto taxpayers to review their past filings and take corrective action. But receiving one does not automatically mean you've done anything wrong. DO NOT rush into amending tax returns or sending information to the IRS without understanding your position first. Letters 6174 and 6174-A generally do not require a direct response, but you should review the instructions carefully. Six weeks ago, I raised the alarm. The number of people contacting us since then has only reinforced my concerns. Have you received an IRS Letter 6174 or 6174-A recently? Comment below. I want to understand just how widespread this latest wave has become. Please repost this. Crypto traders need to know what's happening.

Eliminate federal long-term capital gains tax on qualifying investments held for more than one year. Protect against abuse. Address the fiscal consequences. But stop treating long-term investment gains as another opportunity for government taxation. America needs investment, entrepreneurship and productive capital. We should be debating how to encourage those things, not simply how much tax to collect when investors succeed. If we want Americans to build wealth, why are we taxing them when they do?

Washington has built an extraordinarily complicated tax system. Tax credits. Deductions. Income thresholds. Phaseouts. Special exemptions. Yet we continue taxing people when they realize long-term investment gains, including gains partly attributable to inflation. Why not simplify the system and reward long-term capital formation? Tax short-term speculation differently if necessary. But someone who invests in a business, holds an asset for years and takes the risk of losing their capital should not automatically face another federal tax when that investment succeeds. And if eliminating the tax entirely isn't politically achievable, Congress should at least seriously consider adjusting capital gains for inflation. That would address one of the most obvious distortions in the current system.

Bitcoin hits $76k for the first time in several weeks. only one song for this. Happy Friday 🍻

What If We Eliminated Long-Term Capital Gains Tax? Imagine a tax system where qualifying investments held for more than one year could be sold without federal capital gains tax. Investors could move capital without triggering that tax penalty. Entrepreneurs could sell successful investments and reinvest their proceeds. Long-term investors could make decisions based more on economic opportunity and less on tax consequences. And people building wealth through stocks, crypto and business ownership would have a stronger incentive to invest for the long term. Would eliminating the tax automatically guarantee economic growth? No. It would come with significant fiscal costs and distributional consequences that Congress would need to address. But the potential benefits deserve serious consideration.