Congress Heard Crypto Tax Bills, Then Heard Silence 🧾

The House Ways and Means Committee convened Tuesday at 2pm ET to publicly debate a package of six GOP-authored crypto tax bills, with witnesses from Fidelity, Coinbase, Coin Center, and NYU Law's Tax Law Center testifying on proposals covering de minimis exemptions, the tax treatment of staking and mining rewards, and an IRS safe harbor for prior failures to report crypto gains. The hearing was broadcast live on the committee's YouTube channel, according to the committee page published Monday, and followed a set of draft bills circulated by House Republican leadership last week. The measures would exempt up to $10 in network transaction fees per transaction for as many as 5,000 transactions a year, create a two-year safe harbor for some taxpayers who failed to report prior crypto gains, and alter the tax treatment of rewards generated by crypto mining and staking. Rep. Mike Carey introduced the staking and mining measure, H.R. 9175, the Tax Clarity for Mining and Staking Act.

Bipartisan consensus proved elusive. Rep. Richard Neal (D-MA), the committee's top Democrat, told reporters he does not foresee members reaching a bipartisan deal on crypto tax policy until after November's midterms, according to Punchbowl News. "I'm aligned with that goal—eventually," Neal said at Tuesday's hearing. Rep. John Larson (D-CT) added that "there is a sense of urgency, but there's also a sense of, 'are we acting too quick without knowing what we're doing?'" and "there's far more questions than there seem to be answers." Democrats, including Rep. Mike Thompson (D-CA), raised concerns that deferring taxes on staking and mining rewards could make crypto more attractive than traditional, taxable investments like corporate stocks and bonds and significantly reshape financial markets. "It seems to be a real sticking point in all this, and it seems that maybe we're at an impasse," Thompson said. Thompson previously voted to pass both the stablecoin-focused GENIUS Act, signed in July, and the Clarity Act, which would formally legalize most crypto activity in the United States.

The most contested bill, the Tax Clarity for Mining and Staking Act, would preserve current IRS treatment of mining and staking rewards as taxable income upon receipt as the default, while allowing taxpayers to elect an alternative approach that defers income recognition until the assets are sold or otherwise disposed of. Supporters, including Coinbase Vice President of Tax Lawrence Zlatkin, pressed the committee to expand certain provisions, including de minimis exemptions for crypto payments. Under current rules, staking rewards and newly mined crypto must be reported as income when received regardless of whether the tokens are sold; IRS Notice 2014-21 treats mined Bitcoin as taxable income upon receipt, and Revenue Ruling 2023-14 states staking rewards are immediately taxable when received. The bill also includes provisions stating that a trust would not lose its tax status solely because it stakes digital assets on behalf of investors, provided it is not actively engaged in the business of validating transactions. "Staking and mining rewards have sat in an awkward grey area for years, and the absence of clear rules has made compliance a guessing game for anyone actively participating in these networks," said Markus Levin, co-founder of decentralized data protocol.

In a joint letter sent this week to the top-ranking Republicans and Democrats on the House Ways and Means Committee, the Blockchain Association, the Crypto Council for Innovation, and the Digital Chamber urged lawmakers to quickly pass the staking and mining bill and warned against altering its current text. "Reopening the compromise already struck in this legislation would risk reviving the very problems the bill resolves and stalling a bipartisan result that is finally within reach," the groups wrote. A representative for the Digital Chamber told Decrypt the organization plans to bring nearly a dozen member companies to the Hill on Wednesday to press for the bill's passage, adding that the flyout should provide "a good feel for the level of motivation." The Senate's closely watched Clarity Act faces a similar deadline, with advocates arguing that if it cannot pass by August, it is unlikely to become law for the foreseeable future.