The IRS is preparing to overhaul its voluntary disclosure program to cut penalties and resolve cases faster, including crypto-related violations, according to a Forbes report summarized by Cointelegraph. IRS Criminal Investigation Chief Jarod Koopman said the revised program should launch before December.
The main target is speed. Cases would be resolved within 120 days of the taxpayer finishing the required submission, while the current process can take a year or more. Penalties would be substantially lower than today’s, although no figures were given. The agency is also considering installment plans and offers in compromise for people who cannot pay in full.
There will be no separate process for digital assets. Crypto cases would follow the same procedures as other tax noncompliance. The program is aimed at willful noncompliance, which can expose taxpayers to criminal prosecution, and not at unintentional reporting errors.
A separate bill covers the second group. Section 502 of the proposed Digital Asset Tax Certainty Act would create a correction process for crypto taxpayers, including those with unintentional errors, with defined penalties. The bill cleared the House Ways and Means Committee in September.
For US crypto holders with unreported gains or accounts, the change could lower the cost of coming forward. The details, including the penalty levels and eligibility rules, are not yet published, so the final program may differ. This is news, not tax or legal advice.
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Sources:
- Cointelegraph: IRS plans lower penalties for crypto tax disclosures, Forbes reports
- Traders Union: IRS plans to cut tax disclosure penalties in crypto compliance overhaul
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