IRS Proposes Lowering Crypto Tax Voluntary Disclosure Penalties, Aims to Resolve Cases Within 120 Days

Odaily Report: The U.S. Internal Revenue Service (IRS) plans to adjust its voluntary disclosure program before December, reducing tax violation penalties and speeding up processing, with a goal of resolving cases within 120 days after taxpayers complete required filings. The adjustment plan does not establish a dedicated process for crypto assets; related matters will follow existing voluntary disclosure procedures. The IRS is also considering installment payment and compromise settlement options, and specific penalty amounts have not yet been announced.

Jarod Koopman, head of the IRS Criminal Investigation division, said the current process can take a year or longer and is mainly aimed at taxpayers who intentionally violate tax law and may face criminal prosecution, not those with unintentional filing errors.

A separate voluntary disclosure proposal for crypto asset taxpayers is under review, covering unintentional filing errors. Section 502 of the proposed Digital Asset Tax Certainty Act would establish a violation correction procedure and specify penalties; the bill passed the House Ways and Means Committee in September. (Cointelegraph)