New US Bill May Provide Remedy for Unintentional Crypto Tax Errors

Eligible taxpayers may receive relief from penalties.

Written by: Christina Comben

Compiled by: Chopper, Foresight News

The US Congress is advancing a bill that may offer a turning point for crypto investors who have failed to report crypto transactions in previous years.

Section 502 of the "Digital Asset Tax Compliance Act" (H.R. 10357) proposes to authorize the US Secretary of the Treasury to establish a voluntary disclosure program for digital assets within 12 months of the bill's enactment. Eligible taxpayers can correct past tax compliance issues related to digital assets by submitting amended returns and paying any owed taxes, interest, and penalties.

On September 16, the House Ways and Means Committee passed the bill with a vote of 38 in favor and 5 against, but it has not yet been formally enacted and still requires votes from the House, Senate, and the President's signature to take effect.

Andrew Gordon, Executive Director of the Digital Asset Tax Compliance Coalition, told this publication: "This is a significant adjustment that can help a large number of ordinary taxpayers, but currently, almost no one is paying attention."

Existing System Has Gaps

US crypto investors are facing their first reporting season following the implementation of new rules requiring exchanges to report crypto gains to the IRS, which allows the IRS to have a more comprehensive view of users' crypto trading records.

The House Ways and Means Committee passed the "Digital Asset Tax Compliance Act" with a vote of 38 in favor and 5 against.

Gordon stated that while these new rules can simplify future reporting, they do not address the years of tax compliance issues that existed before the new rules were implemented.

"For many years, a large number of investors have inaccurately reported their taxes," he said, noting that the current mechanism does not provide a predictable solution for taxpayers who made unintentional mistakes to settle their tax debts.

"Now, if crypto investors discover that they have missed reporting their crypto assets or have not reported at all, there is no appropriate way to remedy this." Many people realize years later that they misunderstood the tax rules for crypto transactions or how to report transactions across multiple platforms.

What Can Taxpayers Expect

The IRS's existing voluntary disclosure mechanism is intended to assist taxpayers who have intentionally violated tax laws and face criminal risks.

For taxpayers who simply made reporting errors, while they can currently submit amended returns, the penalty standards are not as clearly defined as the specialized crypto plan proposed in Section 502 of the bill.

Certified Public Accountant and founder of Crypto Tax Advisors, Sharon Yip, stated that it is quite common for ordinary crypto investors to make reporting errors.

Based on her firm's experience, some clients did not report crypto transactions because they mistakenly believed that taxes were only due when cashing out fiat currency.

"Currently, there is no standardized process that provides predictable penalty standards and clear solutions for non-intentional violations by crypto investors," Sharon Yip told this publication.

She believes that this specialized crypto plan could "fill this gap," providing a fixed correction window, lower and more predictable penalties, and greater certainty for taxpayers who voluntarily disclose.

What Policy Arrangements Will the Bill Provide

According to Section 502, taxpayers generally need to submit amended returns within 24 months after the program is established, and the bill sets two penalty schemes.

Taxpayers who swear that their violations were not fraudulent or intentional can enjoy lower penalty tiers. If they submit their returns within the first 12 months of the program's launch, the penalty for the portion of tax owed up to $25,000 is 0%, and 5% for amounts exceeding that.

For taxpayers who cannot provide such a sworn statement, the penalty for the portion up to $25,000 is 25%, and 40% for amounts exceeding that; if they miss the initial window, the penalty rates will further increase.

At the same time, taxpayers may be exempt from certain civil penalties. For tax issues covered by this section that have been disclosed in compliance, even if taxpayers cannot provide a sworn statement, the related disclosure information will not be referred for criminal investigation.

49% of cryptocurrency users understand that selling cryptocurrency may require tax payments. Data source: Cointracker.

Yip advises taxpayers to first organize all transaction records from exchanges and wallets, confirm the tax years that need correction, and then assess whether their errors were indeed non-intentional.

False swearing will incur perjury charges, and she recommends that uncertain taxpayers seek professional assistance.

Section 502 is a positive development for many US crypto users. A report released jointly by CoinTracker and Coinbase in 2026 shows that only 49% of users can correctly understand that selling crypto assets is a taxable event.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.