IRS plans lower tax disclosure penalties, including for crypto: Forbes

The US tax agency is targeting faster resolutions and more flexible payment options for taxpayers voluntarily disclosing past tax violations under a planned program overhaul. The US Internal Revenue Service (IRS) is preparing to overhaul its voluntary disclosure program, with plans to reduce penalties and accelerate the resolution of tax violations, including those involving cryptocurrencies, according to a Friday >report by Forbes. IRS Criminal Investigation Chief Jarod Koopman said the agency aims to introduce the revised program before December, with a target of resolving cases within 120 days of taxpayers completing the required submission process. The overhaul would reportedly not establish a separate disclosure process for digital assets. Koopman told attendees at the UCLA Extension Tax Controversy Conference that the IRS would handle digital assets through the same voluntary disclosure procedures used for other forms of tax noncompliance. The IRS official also indicated that penalties under the revised program would be substantially lower than those currently imposed, although he did not provide specific figures. The agency is considering allowing taxpayers to settle outstanding liabilities through installment plans or offers in compromise. The proposed changes would mark a shift from the existing process, which can take a year or longer to complete, according to Forbes. The IRS’s current voluntary disclosure program is intended for taxpayers whose willful failure to comply with tax laws could expose them to criminal prosecution, rather than those who made unintentional reporting errors. Meanwhile, lawmakers are considering a separate voluntary disclosure program aimed at crypto taxpayers, including those who made unintentional reporting errors. Section 502 of the proposed Digital Asset Tax Certainty Act would establish a process for correcting past violations with defined penalties, unlike the IRS’s existing program, which primarily addresses willful tax noncompliance. The bill cleared the House Ways and Means Committee in September. Magazine: 5 alternatives to Ledger to store your Bitcoin