Digital Assets Voluntary Disclosure Program Act

Key Points

• This bill creates a formal program allowing people who failed to properly report cryptocurrency and other digital assets on their tax returns to come forward, file amended returns, and pay what they owe. The Treasury Department has 12 months after enactment to set up the program.
• Taxpayers who participate and pay their back taxes plus a penalty get protection from criminal prosecution for tax evasion, filing false returns, and related offenses tied to their digital asset mistakes. The government also waives the usual accuracy-related and fraud penalties.
• People who certify under penalty of perjury that their errors were not fraudulent or willful pay significantly lower fees. For these 'certified' taxpayers, the penalty on the first $25,000 of unpaid tax per year is 0%, compared to 25% for those who cannot make that certification.
• There is an incentive to act quickly: penalty rates go up for amended returns filed more than 12 months after the program launches. For uncertified taxpayers, the rate on the first $25,000 jumps from 25% to 40%, and the rate above that threshold rises from 40% to 50%.
• The program covers digital assets broadly defined as any digital representation of value on a cryptographically secured distributed ledger. The Treasury Secretary has authority to expand or clarify this definition and can waive penalties when doing so serves the interests of justice.