Identify the type of letter
An informational letter ("we are aware that you have carried out transactions...") is an invitation to declare voluntarily: no answer is required, but ignoring it is the worst option if your prior years are not closed. A request for data comes with a deadline and specific questions. A notice of audit means a formal procedure has begun, with procedural rights and hard deadlines.
What to do immediately
- Note the response deadline — it is stated in the letter. An extension is usually available, but it has to be requested before the deadline passes, not after.
- Do not phone the tax authority to "explain" before you understand your own position: oral explanations are recorded and they bind you.
- Assemble the facts: transaction history from every platform, wallets, prior returns. The revenue authority often already holds the exchange data — your version has to match it.
- If you have unreported periods, assess voluntary disclosure before you reply: in many jurisdictions it remains available until an audit formally opens.
What not to write in your reply
Do not concede fault with phrases like "I forgot" or "I did not know I had to" — there are neutral formulations with the same meaning and far fewer consequences. Do not answer more than you were asked. Do not attach documents for periods outside the request. Each of these rules sounds obvious, and each is broken in most of the self-drafted replies we have seen.
Frequently asked questions
How does the tax authority know if I sell cryptocurrency?
Information exchange: platforms report client and transaction data under international reporting standards, and banks report incoming payments from exchanges. "They will never find out" is no longer a strategy.
How long do I have to respond?
It is stated in the letter; typically 30 days. An extension is available on a reasoned request made before the deadline expires.
Do I need a lawyer to answer the first letter?
For an informational letter, not necessarily. For a request for data or an audit, yes: the cost of a mistake in the first reply is disproportionately high.
Discuss your situation with a lawyer
Initial assessment of prospects is free. We reply within one business day, confidentially.
Urgent review of your letter
Send us the type of letter and the response deadline — we will tell you what to do within one business day. The initial assessment is free.
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