The IRS has announced plans to overhaul its Voluntary Disclosure Program with measures intended to lower penalties, accelerate case resolution, and offer more flexible payment options. IRS Criminal Investigation Chief Jarod Koopman said the agency aims to introduce the revised program before December, targeting resolution of completed submissions within 120 days. The agency intends to handle cryptocurrency-related disclosures through the general VDP rather than creating a separate channel for digital assets.
Under the proposed changes, penalties would be substantially reduced compared with current practice and taxpayers could be allowed to settle liabilities via installment plans or offers in compromise. Specific penalty figures and eligibility details have not been finalized. Separately, Section 502 of the proposed Digital Asset Tax Certainty Act—moving through the House Ways and Means Committee—would create a distinct option for digital asset cases and, under certain conditions, could apply penalties as low as 0% on the first $25,000 of tax deficiency. The IRS has also introduced Form 1099-DA reporting requirements for 2025, which increase reporting of digital asset sales. Collectively, these items point toward a coordinated federal effort to streamline and speed resolution of crypto tax issues, though observers should watch for formal details on penalty structures and eligibility.