Digital Assets Voluntary Disclosure Program Act

no digital assets violation occurring during the applicable period was committed fraudulently or willfully, and (iii) if subject to-- (I) any ongoing criminal investigation with respect to any digital assets violation, or (II) any ongoing audit or examination by the Internal Revenue Service with respect to any applicable taxable year, has been issued a waiver by the Secretary to nonetheless participate in the program. (C) Certified eligible taxpayer.--The term ``certified eligible taxpayer'' means any taxpayer who-- (i) committed any digital assets violation during the applicable period, (ii) certifies, under penalty of perjury, that no digital assets violation occurring during the applicable period was committed fraudulently or willfully, and (iii) if subject to any ongoing audit or examination by the Internal Revenue Service with respect to any applicable taxable year, has been issued a waiver by the Secretary to nonetheless participate in the program. (2) Digital assets violation.-- (A) In general.--The term ``digital assets violation'' means, with respect to any eligible taxpayer, any instance in which such taxpayer failed to comply with a requirement under the Internal Revenue Code of 1986 if-- (i) such instance relates to the ownership of, or transactions in, digital assets during the applicable period, and (ii) such failure affects the proper amount of any tax item with respect to any applicable taxable year. (B) Digital asset.--For purposes of subparagraph (A), the term ``digital asset'' means, except as otherwise provided by the Secretary, any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary. (3) Applicable period.--The term ``applicable period'' means, with respect to any eligible taxpayer, the period-- (A) beginning with the later of-- (i) the taxpayer's first taxable year with respect to which the proper amount of any tax item is affected by any digital assets violation, or (ii) the taxpayer's first taxable year with respect to which a return of tax was filed during the 6-year period (3-year period in the case of a certified eligible taxpayer) immediately preceding the date of the enactment of this Act, and (B) ending with the taxpayer's last taxable year ending before the date of the enactment of this Act. (4) Applicable taxable year.--The term ``applicable taxable year'' means, with respect to any eligible taxpayer, any taxable year during the applicable period with respect to such taxpayer. (5) Digital assets violation penalty.-- (A) In general.--The digital assets violation penalty is an amount equal to the sum of-- (i) 25 percent (0 percent in the case of a certified eligible taxpayer) of the aggregate amount of so much of the deficiency of tax attributable to all digital assets violations as does not exceed $25,000 with respect to each applicable taxable year, plus (ii) 40 percent (5 percent in the case of a certified eligible taxpayer) of the aggregate amount of so much of the deficiency of tax attributable to all digital assets violations as exceeds $25,000 with respect to each applicable taxable year. (B) Special rules for amended returns filed after certain date.--In the case of an amended return with respect to any applicable taxable year filed after the date that is 12 months after the date on which the Secretary establishes the program, subparagraph (A) shall be applied with respect to such applicable taxable year-- (i) by substituting ``40 percent'' in lieu of ``25 percent'' in clause (i) thereof, (ii) by substituting ``5 percent'' in lieu of ``0 percent'' in clause (i) thereof, (iii) by substituting ``50 percent'' in lieu of ``40 percent'' in clause (ii) thereof, (iv) by substituting ``10 percent'' in lieu of ``5 percent'' in clause (ii) thereof, and (v) in the case of a certified eligible taxpayer, by substituting ``$100,000'' in lieu of ``$25,000'' each place it appears. (C) Waiver by secretary.--The Secretary may waive part or all of the digital assets violation penalty to the extent the Secretary determines that such a waiver would be in the interests of justice and the proper administration of the internal revenue laws, including in cases involving digital assets violations attributable to reasonable cause (as determined by the Secretary). (6) Secretary.--The term ``Secretary'' means the Secretary of the Treasury or the Secretary's delegate. (e) Applicability of Section 6665 of Internal Revenue Code of 1986.--For purposes of this section, any deficiency of tax or digital assets violation penalty shall be assessed, collected, and paid in the same manner as taxes, as provided in section 6665(a) (without regard to any restrictions on assessment described in section 6213). (f) References to Internal Revenue Code of 1986.--Except as otherwise expressly provided, whenever in this section a reference is made to a section, the reference shall be considered to be made to a section of the Internal Revenue Code of 1986. (g) Regulatory Authority.--The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including with respect to the provision of reasonable assurances to taxpayers that any information properly disclosed under the program shall not be used in contravention of any benefit described in subsection (c). <all>