IRS signals cheaper voluntary disclosure for willful crypto tax gaps

The Internal Revenue Service aims to roll out a revised Criminal Investigation Voluntary Disclosure Practice (VDP) before December, with a target of resolving eligible cases within 120 days after a complete submission and with substantially lower penalties than today's process, according to a Friday Forbes report on remarks by IRS-CI Chief Jarod Koopman at the UCLA Extension Tax Controversy Conference [1]. Le Coin has not seen an IRS release setting the new terms, and has not obtained Forbes's full article text.

As Forbes reported those remarks, digital-asset cases would use the same VDP as other tax noncompliance, not a separate crypto track, and the agency is considering installment plans and offers in compromise so participants need not pay every dollar up front [1]. Koopman did not give substitute penalty percentages in that account [1].

What VDP is today

VDP is the willful track. The IRS's current Voluntary Disclosure Practice page says that if a taxpayer has "willfully failed to comply with tax or tax-related obligations," a voluntary disclosure may help resolve non-compliance and limit exposure to criminal prosecution [2]. It is not a general amnesty. Non-willful errors are handled through other routes, such as amended returns outside VDP [2]. Joining the practice does not automatically end criminal exposure, and illegal-source income is excluded [2]. The application path is Form 14457 in a two-part electronic process [2].

On that page (last reviewed July 20, 2026), the published framework for amended returns is a 20 percent accuracy-related penalty for each year; delinquent returns face failure-to-file penalties, with separate FBAR and international information-return rules [2]. Those are today's stated rules until IRS publishes a final replacement package.

Proposed framing, not final figures

Bloomberg Tax commentary by Eric Hylton, a former IRS-CI executive, describes the proposed overhaul as replacing a 75 percent civil fraud penalty with a 20 percent accuracy-related penalty across each year of a six-year disclosure period [3]. That is proposed framing, not a final IRS schedule. Koopman's October remarks, as carried by Forbes, did not supply replacement numbers [1][3].

Nothing in this piece is tax advice. Le Coin is describing what a named official said, as reported, about a program whose final terms are not yet published.

Sources

1. Forbes, "Confession May Soon Cost Less: IRS Promises Lower Penalties For Voluntary Disclosure," Oct. 23, 2026 (Koopman at UCLA Extension Tax Controversy Conference), https://www.forbes.com/sites/irswatch/2026/10/23/confession-may-soon-cost-less-irs-promises-lower-penalties-for-voluntary-disclosure/, accessed Oct. 24, 2026, 3:23 p.m. ET. Le Coin has not obtained the full Forbes text (direct fetch returned HTTP 403); title and date confirmed via Google News.
2. IRS Criminal Investigation, "IRS Criminal Investigation Voluntary Disclosure Practice," https://www.irs.gov/compliance/criminal-investigation/irs-criminal-investigation-voluntary-disclosure-practice, page last reviewed or updated July 20, 2026, accessed Oct. 24, 2026, 3:23 p.m. ET.
3. Eric Hylton, "Admitting Tax Shortfalls Remains Risky Under Revised IRS Program," Bloomberg Tax, Oct. 7, 2026, https://news.bloombergtax.com/tax-insights-and-commentary/admitting-tax-shortfalls-remains-risky-under-revised-irs-program, accessed Oct. 24, 2026, 3:23 p.m. ET. Proposed-penalty framing attributed as proposed.

Holding the Corner.

Not financial advice.