- The IRS is overhauling its voluntary disclosure program, targeting lower penalties and faster resolution of tax violations, including those involving cryptocurrencies.
- IRS Criminal Investigation Chief Jarod Koopman stated the revised program aims to resolve cases within 120 days, with implementation expected before December.
- Digital assets will be handled through the same disclosure procedures as other noncompliance, with no separate process planned.
- Penalties under the new program will be substantially lower than current levels, though specific figures remain undisclosed.
- Lawmakers are separately considering the Digital Asset Tax Certainty Act, which would create a voluntary disclosure program for crypto taxpayers, including those with unintentional errors.
IRS Criminal Investigation Chief Jarod Koopman announced Friday that the agency plans to overhaul its voluntary disclosure program before December, promising lower penalties and accelerated resolution for tax violations, including those involving cryptocurrencies, according to a Forbes report. The revised program targets case resolution within 120 days of taxpayers completing the required submission process.
However, the overhaul will not establish a separate disclosure process for digital assets. Koopman told attendees at the UCLA Extension Tax Controversy Conference that the IRS would handle cryptocurrencies through the same voluntary disclosure procedures used for other forms of tax noncompliance.
Penalties under the revised program will be substantially lower than those currently imposed, though Koopman provided no specific figures. The agency is considering allowing taxpayers to settle outstanding liabilities through installment plans or offers in compromise.
The proposed changes mark a shift from the existing process, which can take a year or longer to complete. The current program is intended for taxpayers whose willful failure to comply could lead to criminal prosecution, not those with unintentional reporting errors.
Meanwhile, lawmakers are considering a separate voluntary disclosure program aimed at crypto taxpayers, including those who made unintentional errors. Section 502 of the proposed Digital Asset Tax Certainty Act would establish a process for correcting past violations with defined penalties, unlike the IRS‘s existing program. The bill cleared the House Ways and Means Committee in September.
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