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What is IRS Letter 6433?

 

IRS Letter 6433 informs you of foreign tax credit disallowance or issues related to Form 1116, which taxpayers use to claim credits for taxes paid to foreign governments. This is common when U.S. taxpayers receive income or dividends from overseas platforms, including crypto exchanges or foreign DeFi protocols.

A white envelope stamped in red with the words “IRS Letter 6433 – Important: IRS Notice Enclosed,” symbolizing an official IRS notice about unreported or mismatched crypto income.

What is IRS Letter 6433?

A white envelope stamped in red with the words “IRS Letter 6433 – Important: IRS Notice Enclosed,” symbolizing an official IRS notice about unreported or mismatched crypto income.

IRS Letter 6433 informs you of foreign tax credit disallowance or issues related to Form 1116, which taxpayers use to claim credits for taxes paid to foreign governments. This is common when U.S. taxpayers receive income or dividends from overseas platforms, including crypto exchanges or foreign DeFi protocols.

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Why did I get IRS Letter 6433 after a foreign tax claim?

If you’ve paid foreign transaction fees, interest, or capital gains taxes through an international crypto platform, this letter may follow an attempted foreign tax credit claim.

What to do next:

Open teal folder containing small sheets showing currency symbols and graphs, representing organized preparation of supporting documentation for foreign tax credit claims.

1: Review the disallowance explanation and Form 1116 submission

 

An open folder with a W-2 form, a checklist, and a profile card with a checkmark emerging from it, symbolizing submitting proof like income forms and dependents to the IRS.

2: Prepare supporting documentation such as transaction histories, foreign tax forms, or exchange statements

Document with a dollar sign beside a phone receiver, symbolizing contacting the payer to stop backup tax withholding after corrections are made.

3: Appeal if the credit was incorrectly disallowed

When to Seek Professional Help

CryptoTaxAudit helps clients properly claim or defend foreign tax credits tied to crypto platforms and global DeFi services.

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Additional Resources

Voluntary compliance letters