The US Internal Revenue Service is planning to cut penalties and speed up resolutions for taxpayers who come forward about unpaid taxes, including on crypto, Forbes reported on Friday.
Jarod Koopman, chief of IRS Criminal Investigation, set out the plans at the UCLA Extension Tax Controversy Conference, according to the report.
What is changing
The IRS intends to overhaul its voluntary disclosure programme, which lets taxpayers come forward about past tax violations. The new penalties would be “substantially lower” than current ones, although no specific rates had been published at the time of writing.
The agency is aiming to resolve cases within 120 days once a taxpayer completes the required submission. The current process can take a year or more.
The IRS is also considering letting taxpayers settle what they owe through instalment plans or offers in compromise, where a reduced amount is accepted to settle a debt.
Koopman’s target is to introduce the revised programme before December.
How crypto fits in
According to the report, there will be no separate disclosure process for digital assets. Crypto violations will go through the same procedures as other types of tax non-compliance.
The programme is aimed at taxpayers whose wilful non-compliance could expose them to criminal prosecution, not those who made honest reporting mistakes.
A separate fix in Congress
Lawmakers are working on a route for unintentional errors. Section 502 of the proposed Digital Asset Tax Certainty Act would create a process for correcting past crypto tax violations, with set penalties, including for mistakes made unintentionally.
The bill cleared the House Ways and Means Committee in September.
What happens next
The key details still to come are the actual penalty rates and the date the new programme opens. Neither had been published at the time of writing.
