A bill moving through Congress would create a dedicated path for US taxpayers to fix past digital asset tax reporting mistakes, potentially with lower penalties than they might face today. The proposal is part of H.R. 10357, the Digital Asset Tax Certainty Act, and would direct the Treasury secretary to set up a Digital Asset Voluntary Disclosure Program within 12 months of enactment.
The measure cleared the House Ways and Means Committee on Sept. 16 by a 38-5 vote, but it is not law yet. It still must pass both chambers of Congress and be signed by the president before any program can be established.
Why lawmakers are proposing a crypto-specific program
The proposal addresses a problem that tax professionals say has built up over several years of crypto trading. While the new 1099-DA broker reporting rules are giving the IRS more visibility into digital asset transactions and may make future reporting easier, they do not resolve errors from earlier tax years.
Andrew Gordon, executive director of Digital Asset Tax Action, said the change could help many ordinary taxpayers and has received little attention. He argued that a large share of investors did not report correctly in prior years and that existing procedures do not give people who made what he described as honest mistakes a predictable way to settle their liabilities.
How the current system falls short
Taxpayers can already amend returns, but the treatment of penalties is less certain than under the bill’s proposed framework. The IRS also has an existing Voluntary Disclosure Practice, though that process is aimed at taxpayers whose conduct was willful and who may face criminal exposure.
Sharon Yip, a certified public accountant and founder of Crypto Tax Advisors, said reporting problems are common among ordinary crypto investors. In her firm’s experience, some taxpayers assumed crypto was not taxable until they cashed out, while others relied on incomplete exchange records or misclassified transactions. She said there is currently no standardized process that gives non-willful crypto taxpayers clear, predictable penalty treatment or a defined route to resolution.
What Section 502 would let taxpayers do
Section 502 would allow eligible taxpayers to correct past digital asset tax violations by filing amended returns and paying the tax due, plus interest and a program penalty. In general, taxpayers would need to submit those amended returns within 24 months after the program is established.
The bill creates two penalty tracks. Taxpayers who certify under penalty of perjury that their violations were neither fraudulent nor willful would receive the lower rates if they file during the program’s first 12 months: a 0% penalty on the first $25,000 of tax deficiency for each year and 5% on amounts above that threshold.
Those who do not make that certification would face steeper penalties of 25% on the first $25,000 and 40% above it, with higher rates if they miss the initial filing window. The bill also provides relief from certain civil penalties, and for taxpayers who do not certify, it would bar criminal referrals based on information properly disclosed for the covered tax offenses.
What happens next and what remains uncertain
The proposal remains only a bill, so no disclosure program exists yet. If H.R. 10357 ultimately becomes law, Treasury would have up to 12 months to create the program outlined in Section 502.
Yip said taxpayers considering whether they might qualify should first review transaction histories across exchanges and wallets to identify which tax years may need correction, then assess whether any mistakes were truly non-willful. Because the lower-penalty track would require a certification under penalty of perjury, she said people who are unsure should seek professional guidance. The broader backdrop is a continuing gap in tax understanding: a 2026 report by CoinTracker and Coinbase found that only 49% correctly understood that selling crypto can be a taxable event.
Source: cointelegraph.com