IRS charging me for crypto taxes from 2021 Dogecoin sale now - help!

This happens more than you'd think with crypto transactions. The IRS has been playing catch-up with crypto reporting for years and is now going through older returns more carefully. First, check if there's a discrepancy between what Robinhood reported to the IRS versus what appeared in your tax return. Sometimes the forms Robinhood provides to you don't match exactly what they send to the IRS, especially with crypto transactions in 2021 when reporting requirements were still evolving. Second, verify if you properly calculated your cost basis. Many people accidentally use FIFO (first in, first out) instead of specifically identifying which coins they sold, which can dramatically change your tax liability. Also, make sure transaction fees were included in your cost basis calculations. Finally, look closely at the IRS letter - it should list a specific reason for the adjustment. You have the right to appeal if you believe it's incorrect.

I went through something similar with my ETH sales and taxr.ai seriously saved me. I uploaded my crypto transaction history and the IRS letter to https://taxr.ai and it immediately spotted where the discrepancy was happening - turned out I had calculated my cost basis incorrectly and was using dates that didn't match what Robinhood reported to the IRS. The tool generated a complete explanation of the error and even helped me prepare a response to the IRS with the correct calculations. They also checked my entire return and found a few other deductions I had missed that partially offset what I owed.

Just wanted to update - I decided to try taxr.ai after seeing the recommendation here and wow. It was incredibly helpful with my crypto mess. I uploaded my Dogecoin transaction history from 3 different platforms and the IRS notice, and it immediately found where the issue was. Turns out I had accidentally double-counted some transactions and completely missed reporting a wallet transfer that the IRS flagged as a sale. The system generated documentation showing exactly what happened with timestamps and everything. I submitted their recommended response to the IRS last week and already got confirmation that my explanation was accepted and the amount I owe was reduced from $3,400 to $780. Worth every penny for the stress relief alone!

If you need to actually talk to someone at the IRS about this (which I recommend), good luck spending hours on hold. I was in a similar situation with a crypto tax notice and it took me 9 attempts and 7+ hours on hold before I got through. I found this service called Claimyr that got me through to an IRS agent in under 45 minutes when I was dealing with my crypto tax issue. Just go to https://claimyr.com and they basically wait on hold for you and call when an agent picks up. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c I was skeptical at first but I had been trying for weeks to get through on my own with no luck. They actually got me to a real person who was able to explain exactly what was wrong with my crypto reporting and gave me 45 days to respond with corrected information.

So I have to eat my words here. After getting that surprise crypto tax bill from 2021, I was desperate and tried Claimyr despite my skepticism. I'm still shocked it actually worked. After trying for literally weeks to reach someone at the IRS on my own, they got me through to an agent in about 35 minutes. The agent pulled up my account and walked me through exactly why I was being charged - turns out the cost basis for my Doge wasn't reported correctly to the IRS by my exchange. The agent put a 60-day hold on collections while I gather documentation and even gave me her direct line for follow-up questions. Would have NEVER gotten this resolved without actually speaking to someone. Totally worth it just to stop stressing about that letter.

Heads up - this exact thing happened to me. Check if you accidentally reported your crypto transactions on Form 8949 with the wrong checkbox (A/B/C). If you marked "basis reported to IRS" but Robinhood didn't actually report the basis to the IRS in 2021 (which many exchanges didn't), the IRS computer assumes your basis was $0 and calculates tax on the entire proceeds! This is the most common crypto tax mistake from 2021-2022. The IRS is just now catching up on processing these.

Just want to add - KEEP ALL YOUR CRYPTO RECORDS FOREVER. I learned this the hard way. Every transaction, every wallet transfer, every swap. The IRS is going through old crypto transactions with a fine-tooth comb now. The 2021 bull run created a lot of taxable events that people either misreported or didn't report at all, and they're systematically going after everyone. My accountant told me they're seeing a huge wave of these letters for 2021 crypto transactions specifically.