IRS Targets 120-Day Resolution for Crypto Tax Cases With Lower Penalties Before December

According to IRS Criminal Investigation chief Jarod Koopman, the Internal Revenue Service is preparing to overhaul its voluntary disclosure program with lower penalties and a target of resolving crypto-related tax cases within 120 days, aiming to release the revised framework before December. The revised program would apply to all tax violations, including unreported cryptocurrency income and gains, without creating a separate disclosure route exclusively for digital assets.

The current voluntary disclosure process typically takes a year or longer to resolve. Koopman indicated that penalties under the revised program would be substantially lower than current levels, though specific penalty rates have not been disclosed. The IRS is also considering more flexible payment options, including installment plans and offers in compromise, to help qualifying taxpayers resolve outstanding liabilities.