This bill establishes a voluntary program allowing taxpayers to correct past failures to report digital asset ownership or transactions in exchange for reduced penalties and certain protections from criminal referral.
Aaron Bean
Representative
FL-4
This bill establishes the Digital Assets Voluntary Disclosure Program, allowing taxpayers to correct past failures in reporting digital asset ownership or transactions. Participants must amend returns, pay back taxes, and satisfy a specific penalty structure to receive relief from further civil penalties and potential criminal referral for disclosed violations. The program offers different tiers of protection based on whether the taxpayer certifies their violations were non-fraudulent and non-willful.
New Digital Assets Program Offers 24-Month Window to Fix Crypto Tax Errors and Avoid Prosecution.
The Treasury Department is rolling out a massive 'amnesty-style' program designed to bring cryptocurrency and NFT owners into tax compliance. Within 12 months of this bill becoming law, the Secretary of the Treasury must launch the Digital Assets Voluntary Disclosure Program. It gives anyone who has missed reporting crypto transactions on their past taxes a chance to come clean, pay what they owe, and secure a legal 'get out of jail free' card regarding criminal tax prosecution. This isn't just for big-time traders; it applies to anyone who has had a 'digital assets violation'—basically any failure to report income or transactions that changed your tax bill over the last six years.
The Price of Coming Clean
If you decide to step forward, the bill sets a clear but steep price tag. For most people, the penalty is 25% of the tax you missed on the first $25,000 of deficiency, jumping to 40% for anything above that. However, the bill creates a 'Certified' track for those who can swear under penalty of perjury that their mistakes weren't intentional or fraudulent. If you qualify as a 'Certified' taxpayer, that 25% penalty rate applies to everything up to $100,000, giving a significant break to regular folks who just got confused by complex crypto rules. But don't wait too long—if you file your amended returns more than 12 months after the program starts, those penalty rates spike to 40% and 50% respectively. For example, a freelance designer who forgot to report $10,000 in Bitcoin payments would be looking at a $2,500 penalty plus the original tax, provided they act fast.
Legal Shields and Bureaucratic Fine Print
The biggest draw here is the protection from the IRS's heavy hitters. For 'Uncertified' taxpayers—those who might have been a bit more intentional with their omissions—completing the program means the IRS cannot refer you for criminal prosecution for tax evasion or filing false returns. It’s a peace-of-mind provision that essentially trades a high penalty for a guarantee that you won't face a prison cell. Even if you are currently under a standard IRS audit, you can still participate if you get a waiver from the Secretary. However, the bill gives the Treasury Secretary broad power to set 'other requirements' and 'reasonable fees' for the application, meaning the actual cost of entry could be higher than just the penalties listed in the text.
Who Wins and Who Should Worry
The clear winners are the 'accidental' crypto investors who found themselves in over their heads and want to sleep better at night without fearing a surprise audit. By providing a 24-month window to file amended returns, the bill offers a structured path back to the IRS's good graces. On the flip side, those who choose to stay in the shadows face a much riskier future. Once this program concludes, the IRS will likely use the data gathered to tighten the net on non-participants. The bill also leaves some grey areas; the Secretary has the power to define exactly what counts as a 'digital asset,' which could leave owners of newer, niche tokens wondering if they are covered or still exposed to full-scale legal consequences.