Section 502 of the Digital Asset Tax Certainty Act (H.R. 10357), currently advancing in the US Congress, proposes a Digital Asset Voluntary Disclosure Program to allow crypto investors to correct past tax reporting errors. The House Ways and Means Committee approved the bill by a 38-5 vote on Sept. 16, but it has not yet passed the full House or Senate, nor been signed into law. If enacted, the Treasury secretary would be required to establish the program within 12 months.
The legislation targets taxpayers who made non-willful mistakes, such as failing to report crypto-to-crypto trades or relying on incomplete exchange records. Under the proposed rules, eligible participants must file amended returns within 24 months of the program’s establishment. The bill outlines two penalty tracks: those who certify under penalty of perjury that violations were neither fraudulent nor willful face a 0% penalty on the first $25,000 of annual tax deficiency and 5% on amounts above that if filed within the first 12 months. Non-certifying taxpayers face higher rates of 25% on the first $25,000 and 40% on excess amounts, with penalties increasing if the initial window is missed. Both groups receive relief from specified civil penalties and protection from criminal referrals for properly disclosed offenses covered by the provision.
Advocates argue existing IRS procedures lack predictability for honest errors. Andrew Gordon of Digital Asset Tax Action notes that current voluntary disclosure practices are designed for willful violations, leaving ordinary investors without a clear resolution path. Sharon Yip, a CPA and founder of Crypto Tax Advisors, emphasizes that common errors include misunderstanding taxable events or misclassifying transactions. A 2026 CoinTracker and Coinbase report indicates only 49% of crypto users correctly understood that selling crypto can be a taxable event, highlighting the need for clearer guidance and remediation options.
The advancement of H.R. 10357 signals a legislative attempt to reconcile strict tax enforcement with the practical realities of early-stage crypto adoption. By creating a structured amnesty for non-willful errors, the bill acknowledges that many investors lacked clear guidance during the asset class's formative years. This approach shifts the regulatory focus from punitive measures for inadvertent mistakes to incentivizing compliance through predictable penalty frameworks. It recognizes that the complexity of blockchain transactions often outpaced standard accounting practices, leading to widespread unintentional non-compliance.
However, the proposal remains contingent on passing both chambers of Congress and presidential approval, meaning its benefits are not yet available to taxpayers. Investors should note that while the bill offers reduced penalties for certified non-willful conduct, the requirement to certify under penalty of perjury introduces significant legal risk if errors are later deemed intentional. Furthermore, the implementation timeline—up to three years post-enactment—means immediate exposure to existing IRS enforcement mechanisms persists. Market participants must carefully assess their historical transaction data against current laws rather than assuming future amnesty will cover present liabilities.
