Published Oct 23, 2026
The United States Internal Revenue Service is preparing a significant overhaul of its voluntary disclosure program, introducing structural changes aimed at delivering faster resolutions and introducing more flexible payment options for taxpayers looking to clear past tax violations. The planned reforms, which will encompass complex noncompliance cases including those involving digital assets and cryptocurrencies, represent a major shift in how the federal tax agency handles individuals seeking to come forward voluntarily.
According to a recent report, IRS Criminal Investigation Chief Jarod Koopman announced that the agency intends to roll out the revised program ahead of a December target. A central objective of the upcoming overhaul is to dramatically reduce the timeframe required to process and close cases. Under the proposed framework, the IRS aims to resolve qualifying submissions within 120 days of taxpayers successfully completing the mandatory submission process.
The impending changes were outlined by Koopman during his remarks at the UCLA Extension Tax Controversy Conference, where he provided key details regarding the direction of the agency’s enforcement and compliance strategies. Despite the growing prominence of digital assets in tax audits and investigations, Koopman clarified that the overhauled framework will not establish a separate, standalone disclosure track exclusively for cryptocurrencies and other digital tokens. Instead, the IRS plans to handle digital asset noncompliance through the same universal voluntary disclosure procedures applied to traditional forms of tax noncompliance and hidden financial accounts.
By integrating crypto cases into the broader disclosure mechanism, the agency aims to streamline operations while maintaining a consistent standard for all taxpayers seeking to rectify historical reporting oversights. Furthermore, the IRS official indicated that the financial penalties enforced under the revised program will be substantially lower than those currently levied against noncompliant individuals, although specific penalty percentages or figures were not disclosed during the conference.
To ease the financial burden on individuals stepping forward, the agency is also exploring provisions that would allow taxpayers to settle their outstanding tax liabilities through structured installment plans or formal offers in compromise. These flexible payment structures are designed to encourage higher rates of voluntary compliance by making it more feasible for repentant taxpayers to settle debts without facing immediate, debilitating financial ruin.
These proposed modifications represent a departure from the existing administrative process, which is often characterized by lengthy delays. Under current rules, resolving a voluntary disclosure case can frequently drag on for a year or longer, creating uncertainty for taxpayers and consuming substantial agency resources. The current iteration of the IRS voluntary disclosure program is specifically tailored for individuals whose willful failure to adhere to tax laws exposes them to the immediate threat of criminal prosecution. It is fundamentally distinct from the framework meant to address unintentional reporting mistakes or minor calculation errors.
While the IRS moves forward with its administrative reforms, federal lawmakers are simultaneously evaluating a legislative alternative that targets a different segment of the taxpayer population. Congress is currently considering a separate voluntary disclosure initiative specifically focused on crypto taxpayers, including individuals who made honest mistakes or unintentional reporting errors regarding their digital asset transactions.
This legislative effort is embodied in Section 502 of the proposed Digital Asset Tax Certainty Act. If enacted, the provision would establish a dedicated statutory process allowing taxpayers to correct past reporting violations under clearly defined penalty structures. Unlike the IRS’s administrative voluntary disclosure program, which deals primarily with willful and potentially criminal tax evasion, the legislative proposal offers a distinct pathway for minor or inadvertent crypto tax errors. The momentum behind this legislative approach was highlighted in September when the bill successfully cleared the House Ways and Means Committee, signaling growing bipartisan interest in establishing clearer tax compliance pathways for the burgeoning digital asset sector.
