A path back to compliance

The problem

For most of the last decade, digital asset tax rules were unclear, guidance was thin, and exchanges provided little or no tax reporting. Millions of Americans made honest mistakes, and many others simply did not know they had filing obligations at all.

Today those taxpayers are stuck. Coming forward means navigating a general IRS disclosure practice that was designed for offshore bank accounts, with unpredictable penalties and no assurance about outcomes. Staying silent means growing exposure as Form 1099-DA reporting gives the IRS visibility into years of transactions.

A system that makes compliance harder than hiding is a system that serves no one.

The government loses revenue it could collect today, and taxpayers who want to do the right thing are left without a door to walk through.

The solution

We are urging Congress to direct the IRS to establish a voluntary disclosure program specifically for digital assets: a defined window, a standardized and proportionate penalty framework, and a clear promise that taxpayers who come forward in good faith can resolve their past and move on. Congress is already moving — H.R. 9174, the Digital Assets Voluntary Disclosure Program Act, proposes exactly this.

What H.R. 9174 actually does

The bill does not ask the IRS to study the idea; it instructs the Treasury to build the program and specifies the design. What follows tracks the introduced bill text; the official status page is on Congress.gov.

A program with a deadline

The Treasury must establish the Digital Assets Voluntary Disclosure Program within 12 months of enactment. Participants then have a defined window — amended returns must be filed within 24 months of the program’s launch. That is the opposite of the current practice, which has no calendar and no promised endpoint.

Two tracks, priced honestly

The program separates honest mistakes from willful evasion, and prices them differently. Taxpayers who can certify, under penalty of perjury, that their noncompliance was not fraudulent or willful use the certified track with a three-year lookback. Everyone else uses the uncertified track with a six-year lookback and much steeper rates.

Returns filed late in the window face higher rates on both tracks, and the Secretary may waive part or all of the penalty where justice or reasonable cause warrants it. Note what the percentages apply to: the unpaid tax for each year, not account balances or transaction volume — so the penalty scales with the actual harm to the Treasury.

What participants must do

Come forward completely: apply to the program (with a reasonable fee), file amended returns for the affected years, and pay the tax, interest, and the program penalty — immediately or through an installment agreement under section 6159. There is no discount on the tax itself. The program trades certainty for candor, not revenue for silence.

What they get in return

Certified taxpayers get the accuracy-related penalty (section 6662) waived — their program penalty, often zero, replaces it. Uncertified taxpayers pay the steep rates and in exchange get the accuracy and civil-fraud penalties waived, plus a statutory bar on the IRS using what they disclosed to refer them for prosecution under the core criminal tax statutes. That inversion is the point: the worst facts pay the most and buy finality; honest mistakes pay almost nothing and simply get resolved.

This is also why the fix has to come from Congress rather than from the IRS alone. A statutory program binds in a way administrative practice cannot: the 12-month deadline to build it, the penalty caps taxpayers can plan around, and the bar on criminal referral under sections 7201, 7203, and 7206 (with a carve-out for aiding-and-assisting violations under section 7206(2)) based on the disclosed violations are all written into law, rather than left to policy that can shift with each enforcement cycle. Certainty is the product here, and only a statute can deliver it.

What counts as a digital asset

The bill defines a digital asset as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary” — broad enough to cover coins and tokens today, with room for the Secretary to sweep in whatever comes next, so the program does not obsolete itself.

Who this helps

Consider a freelance designer who traded crypto from 2023 through 2025 across platforms that issued no tax forms. She never reported the gains — not to hide them, but because nothing arrived in the mail and she did not know she had to. Suppose the unreported tax comes to $6,000 in each of three years, $18,000 in all.

Today her options are bad. If the IRS reaches her first — and broker reporting means it eventually can — the 20 percent accuracy-related penalty is on the table: $3,600, plus interest and whatever else an examination turns up, with no assurance about where it ends. The IRS’s general voluntary disclosure practice was built for offshore account holders with willfulness problems, not for her. So she, like millions of others, does nothing, and her exposure compounds as broker reporting catches up with her history.

Under H.R. 9174 she certifies her mistake was not willful, files three amended returns, and pays the $18,000 plus interest. Her program penalty is zero — each year’s deficiency is under $25,000 — and the accuracy-related penalty is waived. She is fully compliant, the government has its revenue, and the whole thing has an end date. That is what a door back into the system looks like.

The fact pattern is not hypothetical. Our founder has written about a father and son who run a winery in Iowa and began investing in crypto in 2017 — six years of activity, never reported, because no one told them a crypto-to-crypto swap was a taxable event. They want to come into compliance. What stops them is the fear that reconstructing years of records hands the IRS an audit roadmap with no assurance about where it ends. That is precisely the person a voluntary disclosure program exists for — and precisely who current practice, built for willful offshore account holders, fails (Crypto Tax Is Moving Behind the Scenes, May 2026).

One boundary is worth naming: the certified track reaches back only three years of filed returns, measured from the date of enactment, so exactly which tax years the program covers depends on when the bill becomes law. Deficiencies older than that window — from 2019 trading, say — fall outside the program and stay under current law.

Status and next steps

H.R. 9174 was introduced by Rep. Aaron Bean (R-FL-4) on June 8, 2026 and referred to the House Ways & Means Committee, where it was featured at the committee’s June 9, 2026 legislative hearing on digital asset taxation. A new broker-reporting regime makes voluntary compliance more valuable than ever — and makes this the right moment to build the door.

We have made this case directly to the tax-writing committees, to Treasury’s Office of Tax Policy, and to members on both sides of the aisle. The idea has momentum. It needs voices behind it — Digital Asset Tax Advocacy exists to organize them.

A note on what this page is: Digital Asset Tax Advocacy is a 501(c)(4) advocacy organization, and this page is advocacy — we describe the bill accurately, and we are asking Congress to pass it. Nothing here is tax or legal advice; taxpayers with past noncompliance should get advice on their own facts under current law, which this bill has not yet changed.

Last reviewed July 30, 2026 · Reviewed by Andrew Gordon, JD, CPA