The Internal Revenue Service plans to publish a rewritten version of its Voluntary Disclosure Practice before December, with lower penalties and a goal of closing each case within 120 days, according to a Forbes report published on 23 October. The remarks came from Jarod Koopman, described in Cointelegraph’s account of the column as chief of IRS Criminal Investigation (IRS-CI), at the UCLA Extension Tax Controversy Conference in Los Angeles. Crypto outlets ran the story as a break on IRS voluntary disclosure for crypto. It is not quite that.
In Cointelegraph’s account of the Forbes piece, Koopman indicated that penalties would be substantially lower than under the current process. He gave no rate, no eligibility rule and no start date. Digital assets will go through the same program as any other undeclared income or account. There is no separate track for crypto holders.
Nothing has been published yet. As of 06:00 UTC on 24 October, the IRS had issued no news release, notice or revenue procedure on the new terms (its latest release, IR-2026-128 of 23 October, is about preparing for the filing season), and its own Voluntary Disclosure Practice page, last updated on 20 July 2026, still shows the proposal the agency put out for comment in December 2025. That proposal is the only text on the table, and it already contains figures.
What Koopman reportedly said at the UCLA tax conference
The 42nd annual UCLA Extension Tax Controversy Conference was a one-day event on Thursday 22 October 2026, and Koopman was billed as one of its two keynote speakers, alongside US Tax Court judge Emin Toro. Forbes published its column the next day. The organizers’ page gives him a wider title than the crypto press does: Chief Compliance Officer of the IRS, in charge of both civil and criminal enforcement. Forbes blocked access to the column when Coindaro tried to open it, so this account rests on Cointelegraph’s summary, and none of Koopman’s words below are direct quotes. No second outlet has published an independent report of the speech, and none of the many rewrites circulating on crypto sites adds a new source or an IRS comment.
According to that summary, the IRS aims to introduce the revised program before December. One rewrite, by PANews, describes the internal target as the end of November. Either way it is a goal, not a commitment written into any IRS document.
The 120-day target would run from the moment a taxpayer finishes the required submission steps. The current process can take a year or longer, according to Forbes as cited by Cointelegraph. The agency is also considering installment plans and offers in compromise, two ways of paying a tax debt over time or settling it for less than the full amount.
No rate, no text and no crypto lane yet
The gaps matter more than the promise. The lower penalties come with no number attached, so nobody outside the IRS knows whether it means the 20% penalty already proposed in December or something below it. The reports say nothing about who will be eligible, how far back a disclosure must go or when the new rules would apply to cases already filed.
The form of the final document is also unknown. It could be a revised IRS-CI practice posted on the agency’s site, a news release, or an item in the Federal Register. Until one of those appears, the speech is a statement of intent by one official, known to most readers through a single Forbes column.
For crypto holders, the headline point is the absence of special treatment. The IRS VDP page does not mention digital assets at all. Someone who hid bitcoin gains uses the same door, and the same forms, as someone who hid a Swiss bank account.
What the IRS has actually published: the December 2025 voluntary disclosure proposal
On 22 December 2025 the IRS opened a 90-day public comment period on proposed changes to the practice, in news release IR-2025-124, “including a more streamlined penalty framework”. Comments went to [email protected] and the period closed on 22 March 2026. The agency’s VDP page adds that the proposal creates no rights for taxpayers who applied before it is finalized: eligibility will depend on the procedures in force when the changes take effect.
The review had been announced earlier that month. Guy Ficco, who led IRS-CI at the time, said on 12 December 2025 that the practice would be re-examined, according to a January 2026 law-firm summary. Koopman now holds the senior post, under the titles quoted above; Coindaro has not found the date of that change.
The draft, as described in the release, on the IRS page and in a Holland & Knight analysis of 23 March 2026, would replace the two heaviest penalties of the current practice with a single, lower one. Today a taxpayer who comes forward generally pays a 75% civil fraud penalty on the year with the largest understatement, and a 50% willful FBAR penalty on the highest total balance of undeclared foreign accounts, according to Holland & Knight. The IRS text sets a 20% accuracy-related penalty on amended returns for each year of the disclosure period, which the firm reads as replacing both. The release also promises that taxpayers who meet every condition “will not be recommended for criminal prosecution”, firmer wording than the current page, which says only that prosecution may not be recommended.
| Point | Current practice | December 2025 proposal | Koopman remarks, as reported (October 2026) |
|---|---|---|---|
| Main income tax penalty | 75% civil fraud penalty, on the year with the highest understatement | 20% accuracy-related penalty, on each year disclosed | “Substantially lower”, no figure |
| Foreign account (FBAR) penalty | 50% willful penalty, on the highest aggregate balance | Per-year penalty, adjusted for inflation | Not mentioned |
| Disclosure period | Six years (kept by the proposal, per Holland & Knight) | Most recent six years | Not mentioned |
| Delinquent returns | Not set out on the IRS page | Failure-to-file penalties, no failure-to-pay penalties | Not mentioned |
| International information returns | Not set out on the IRS page | Up to $10,000 per return per year | Not mentioned |
| Payment | In full, or through a full-pay installment agreement | In full within three months of conditional approval; no installments or offers in compromise | Installments and offers in compromise under consideration |
| Time to resolve a case | Often a year or more | Not specified | Target of 120 days after a complete submission |
| Crypto-specific track | None | None | None |
Applications would still start on Form 14457 and end with a closing agreement in which the taxpayer waives the usual limitation periods. The IRS answers in its FAQ that no penalty deviations will be permitted once conditional approval is granted. The release says the revised procedures would take effect six months after the final terms are published. Bloomberg Tax worked out that this meant about September 2026, if the text had been finalized soon after the comment period. September has passed with no final version.
The installment question
One detail in the Koopman account cuts against the December draft. The proposal requires full payment within three months of conditional approval. Asked in its own FAQ whether taxpayers who cannot pay everything can still take part, the IRS answers no, and Holland & Knight notes that installment agreements and offers in compromise are excluded. The current practice is more flexible: it accepts a full-pay installment agreement. If the IRS now lets people pay over time, or settle for less, the final version would be looser than both. That would help taxpayers who owe more than they can raise in a quarter. It is reported, not confirmed.
Who the practice is for: willful cases, not honest crypto mistakes
The Voluntary Disclosure Practice is run by IRS Criminal Investigation, and it is built for people who could face prosecution. The IRS page asks for a disclosure that is “truthful, timely, and complete” and covers willful non-compliance. “Willfulness is not simply making a mistake,” the page says. It points taxpayers with non-willful errors towards amended or late returns instead.
The practice does not guarantee immunity. The IRS says only that it may not recommend prosecution, and income from illegal sources is excluded. A crypto holder who misread a cost-basis rule or forgot a small airdrop is not the target of this program, whatever the headlines say. Our guide to crypto taxes basics explains which events are taxable and when.
A separate route for honest crypto errors is moving through Congress. The House Ways and Means Committee approved the Digital Asset Tax Certainty Act (H.R. 10357) by 38 votes to 5 on 16 September 2026. Its Section 502 would require the Treasury to set up a Digital Asset Voluntary Disclosure Program within 12 months of the law taking effect, Cointelegraph Magazine has reported. Taxpayers would generally have 24 months to file amended returns. Those who certify under penalty of perjury that they were neither fraudulent nor willful would pay no penalty on the first $25,000 of yearly tax shortfall and 5% above it, if they file in the program’s first 12 months. Coindaro has taken those figures from Cointelegraph and has not checked them against the bill text. The bill still needs a vote of the full House, passage in the Senate and a signature.
The industry is pushing for that bill and others. Our report on the Blockchain Association’s call to Congress for a crypto tax law compares the texts now on the table.
Where crypto fits: Form 1099-DA and the 2019 letters
Crypto still matters to this story because the IRS now receives far more data about it. Under the rules on its digital assets page, brokers report gross proceeds on Form 1099-DA for transactions on or after 1 January 2025, so the first forms covered 2025 sales and went out in 2026. Cost basis is added for certain transactions from 1 January 2026. For 2025 transactions, the IRS will not penalise brokers who file or furnish forms late or wrongly if they made a good-faith effort, and backup withholding relief covers all of 2025 and 2026.
Matching data makes silence more expensive. A holder who never reported trades on a US exchange now appears on a form the IRS can compare with the tax return. Neither Forbes nor Cointelegraph reports that Koopman tied the new disclosure terms to Form 1099-DA, and Coindaro does not suggest he did.
The IRS has written to crypto holders before. On 26 July 2019, in news release IR-2019-132, it said it had started the week before to send letters 6173, 6174 and 6174-A, and that more than 10,000 taxpayers would get one by the end of August. The agency called all three educational letters. “Taxpayers should take these letters very seriously,” said Chuck Rettig, then IRS Commissioner. Coindaro found no confirmed later mailing wave.
A letter is not a voluntary disclosure. The IRS counts a disclosure as timely only if it arrives before the agency opens a civil examination or a criminal investigation, or receives information about the taxpayer’s non-compliance from a third party such as an informant or a John Doe summons. Whether an earlier letter changes that for a given person is a question for a tax lawyer.
The same IRS digital assets page carries a warning that applies right now: scam letters with a QR code ask people to register their crypto on a “compliance portal”. The IRS says it does not require any such registration and is not sending those letters.
What to watch before December
The first test is simple: whether the IRS publishes anything before 1 December, and in what form. A final text would answer the open questions on the penalty rate, the treatment of cases filed under the old terms, the payment options and the starting date. Without it, the speech changes nothing for a taxpayer deciding whether to come forward.
In Congress, H.R. 10357 has until the end of the 119th Congress on 3 January 2027 to pass both chambers, or it must start again. Section 502 is the part that would give non-willful crypto filers their own way back.
Europe is taking a different route. EU tax authorities will start sharing crypto account data under DAC8, with the first exchange of data set for 30 September 2027. Latvia, for its part, now offers a 10% rate for crypto holders who settle past years. For US citizens living in France or Italy, the IRS plan applies directly: they owe US returns and FBAR reports wherever they live.