IRS Plans Lower Penalties and Faster Resolutions for Crypto Tax Disclosures

IRS tax disclosure penalties — The US Internal Revenue Service (IRS) is preparing to overhaul its voluntary disclosure program, aiming to reduce penalties and resolve cases—including those involving cryptocurrency—within 120 days, according to a report by Forbes.

IRS Criminal Investigation Chief Jarod Koopman said the agency plans to introduce the revised program before December 2026. The overhaul targets faster resolutions and more flexible payment options for taxpayers who voluntarily disclose past willful tax violations.

The new framework would not create a separate process for digital assets. Koopman stated that crypto-related disclosures would be handled through the same voluntary procedures used for other forms of tax noncompliance, but with substantially lower penalties.

Meanwhile, a separate legislative effort is underway. The proposed Digital Asset Tax Certainty Act, which cleared a House committee in September, would establish a voluntary disclosure program specifically for crypto taxpayers, including those who made unintentional reporting errors.