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Bill

HR 9174

Digital Assets Voluntary Disclosure Program Act

119th Congress Introduced by Aaron Bean

Creates a voluntary disclosure path for digital assets violations, offering penalties reductions and protections from criminal referrals upon compliant remediation.

Introduced in House
0
WeVote Research Nonpartisan
Bill Summary · HR 9174

Overview

  • Bill: HR 9174
  • Session: 119th Congress
  • Title: Digital Assets Voluntary Disclosure Program Act
  • Purpose: Establish a voluntary disclosure program for taxpayers with digital assets violations and provide defined remedial steps, penalties, and incentives to come into compliance with federal tax laws.

Main purpose and intent

  • Create a Digital Assets Voluntary Disclosure Program to allow eligible taxpayers to remedy digital assets violations by following specified remedial requirements.
  • Offer a structured path to reduce penalties and avoid further enforcement actions when disclosures and payments are made in accordance with the program.

Key provisions and changes

  • Establishment and timeline
    • The Secretary of the Treasury must establish the program within 12 months of enactment.
  • Eligible taxpayers and remedial requirements
    • There are two categories of eligible taxpayers: uncertified eligible taxpayers and certified eligible taxpayers.
    • Uncertified eligible taxpayer requirements:
    • Submit an application to participate.
    • File amended tax returns for applicable years within 24 months of program establishment, adjusting any tax items affected by digital assets violations.
    • Pay or arrange payment of the aggregate tax deficiency attributable to digital assets violations and the digital assets violation penalty, even if statutory limitation periods have expired.
    • Comply with additional information requests or requirements as determined by the Secretary.
    • The Secretary may charge a reasonable fee for submitting an application.
    • Certified eligible taxpayer requirements:
    • Must meet identical sub-items (B, C, D) of the above (amended returns, payment, and additional information) but with certification that violations were not fraudulent or willful.
  • Benefits and protections
    • Uncertified eligible taxpayers who meet remedial requirements and pay the digital assets violation penalty receive:
    • Waiver of all further penalties under Sections 6662 and 6663 for deficiencies attributable to properly disclosed digital assets violations.
    • Assurance that disclosed information will not be used to refer the taxpayer for criminal investigation or prosecution under specified sections (7201, 7203, 7206) related to the disclosed violations.
    • Certified eligible taxpayers who meet remedial requirements receive:
    • Waiver of all further penalties under Section 6662 for deficiencies attributable to properly disclosed digital assets violations.
  • Definitions
    • Digital assets violation: any failure to comply with tax-related requirements related to ownership or transactions in digital assets that affects tax items for applicable years.
    • Digital asset: any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology, as defined by the Secretary.
    • Applicable period: the later of the taxpayer’s first taxable year affected by a digital assets violation or the first taxable year within a specific look-back period (up to 6 years prior to enactment for uncertified taxpayers, 3 years for certified taxpayers), ending before enactment.
    • Applicable taxable year: any taxable year within the applicable period.
    • Digital assets violation penalty: a graduated penalty calculated as:
    • 25% of the deficiency attributable to violations (0% for certified eligible taxpayers) up to $25,000 per applicable year.
    • 40% of the excess deficiency above $25,000 per applicable year (5% for certified eligible taxpayers).
    • Amended returns filed after the establishment date: the penalty percentages and dollar amounts are increased (40/5% and $100,000 for certified eligible taxpayers, replacing the prior 25/0% and $25,000) for such late amendments.
    • Secretary’s discretion to waive penalties in the interests of justice.
  • Administration and regulations
    • The program, its penalties, and related processes are administered and interpreted under the Internal Revenue Code.
    • The Secretary may prescribe regulations and guidance to implement the program, including protections for information disclosed under the program.

Who would be affected

  • Taxpayers with digital assets violations who are:
    • Uncertified eligible taxpayers seeking to participate and remediate through amended returns and payment.
    • Certified eligible taxpayers who acknowledge non-fraudulent, non-willful violations and participate.
  • The Internal Revenue Service (IRS)/Treasury, which would administer, oversee, and regulate the program, including waivers, penalties, and data handling protections.

Procedural and timeline aspects

  • Enactment trigger: The program must be established within 12 months after enactment.
  • Remedial period for amendments:
    • Uncertified taxpayers must file amended returns within 24 months of program establishment.
    • For amended returns filed after the program’s establishment, certain penalties and thresholds are adjusted (higher penalties and higher dollar caps for certified taxpayers).
  • Penalty mechanics:
    • Digital assets violation penalties are structured to deter noncompliance while offering a clear remedy path and potential penalties reductions for those who participate and disclose properly.
  • Information protection:
    • Disclosed information under the program is protected from use in criminal prosecutions (with limited exceptions) to encourage voluntary disclosure.

Practical impact highlights

  • Provides a formal, time-limited pathway for taxpayers with digital assets violations to come into compliance and reduce penalties.
  • Creates financial penalties and a structured calculation method tailored to digital asset violations, with higher penalties possible for amended late filings.
  • Offers clear protections against criminal referrals for information disclosed under the program, potentially increasing voluntary participation.

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Compiled from official sources — confirm details with the bill’s official record.

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