IRS Plans Voluntary Disclosure Program Overhaul, to Lower Penalties and Process Cases in 120 Days by December

According to Forbes, the U.S. Internal Revenue Service (IRS) is preparing to reform its voluntary disclosure program to lower penalties and accelerate resolution of tax violations involving cryptocurrency by December. IRS Criminal Investigation Chief Jarod Koopman stated the agency aims to close cases within 120 days of taxpayers completing required filing procedures. The revised program will not create a separate disclosure channel for digital assets but will apply the same voluntary disclosure framework to all tax non-compliance cases.

Penalties under the reformed program will be significantly lower than current levels, though specific amounts were not disclosed. The IRS is also considering allowing taxpayers to settle through installment plans or settlement offers. Meanwhile, Congress is advancing the Digital Asset Tax Certainty Act Section 502 provision, which would establish a correction process with explicit penalty standards for past violations; the bill passed the House Ways and Means Committee in September.