IRS Eyes Lower Penalties and Flexible Payments for Tax Disclosures
The IRS plans to overhaul its voluntary disclosure program with reduced penalties and more payment options, including for crypto-related violations.
The Internal Revenue Service is preparing a significant overhaul of its voluntary disclosure program that would lower penalties for taxpayers who come forward about past tax violations, including those involving cryptocurrency, according to a Forbes report cited by Cointelegraph.
Under the planned changes, the agency is targeting faster case resolutions and more flexible payment arrangements, a shift that could make it easier for taxpayers — particularly those with unreported digital asset holdings — to settle outstanding obligations without facing the full weight of current penalty structures.
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The move signals a broader strategic pivot by the IRS toward incentivizing compliance rather than purely punitive enforcement. Voluntary disclosure programs have long served as a legal avenue for taxpayers to self-report past failures before the government discovers them independently, typically in exchange for reduced civil penalties and protection from criminal prosecution.
Crypto holders have faced mounting scrutiny from the IRS in recent years as the agency has ramped up enforcement actions and expanded reporting requirements for digital assets. A more accessible disclosure framework could prompt a wave of previously reluctant taxpayers to come into compliance, potentially boosting federal tax collections while reducing costly litigation.
The full scope of the program changes has not yet been officially announced, and specific penalty reduction figures were not detailed in the source reporting. Continue reading at Cointelegraph.
