Bipartisan Push for Crypto Tax Reform: Principles on Mining, Staking, De Minimis Exemptions Gain Momentum
Washington, D.C. – Lawmakers from both sides of the aisle are advancing principles to overhaul cryptocurrency taxation, addressing long-standing issues like mining rewards, staking income, and small personal transactions. The Bipartisan Policy Center’s recent framework outlines key reforms aimed at simplifying compliance while closing tax gaps in the booming digital asset sector.[7]
Evolving Landscape Under New Administration
Cryptocurrency taxation has been a focal point since IRS Notice 2014-21 classified digital assets as property rather than currency, triggering capital gains taxes on disposals.[1][3] The Biden Administration emphasized enforcement, cracking down on underreporting amid a $688 billion federal tax revenue gap, with at least $50 billion linked to unreported crypto transactions.[5] However, a pivotal shift occurred with the release of a comprehensive White Paper in August, proposing crypto as a distinct asset class with rules blending securities and commodities frameworks, including mark-to-market elections and trading safe harbors.[1]
Under the Trump Administration, momentum has accelerated. Congressional hearings by the House Ways and Means and Senate Finance Committees signal strong bipartisan support for legislation.[1][4] A Discussion Draft from Ways and Means incorporates White Paper recommendations, tackling de minimis gains, sourcing rules, lending agreements, wash sales, and more.[1][4]
Core Bipartisan Principles
The Bipartisan Policy Center’s principles emphasize simplicity, clarity, and fairness in taxing digital assets:[7]
- De Minimis Exemption: Bipartisan bills propose exempting small personal crypto transactions, such as a $200 per-transaction threshold for regulated payment stablecoins, mirroring foreign currency rules. This aims to prevent ‘surprise taxes’ on everyday digital payments, as noted by Sen. Kyrsten Sinema.[2][4]
- Mining and Staking: Guidance is needed on taxing rewards as ordinary income upon receipt, with principles calling for clear rules to avoid disputes.[3][7]
- Broker Reporting: Starting in 2025, the Infrastructure Investment and Jobs Act mandates brokers like trading platforms to report transactions to the IRS. Transitional relief applies for 2025-2026, easing penalties for withholding and reporting.[5][6] The Trump Administration pushes extending this to centralized exchanges.[3]
- Asset Classification: Debate persists between SEC (securities) and CFTC (commodities) jurisdictions. Proposals suggest a new hybrid class with tailored tax treatments.[1][3]
Additional reforms in the Discussion Draft include digital asset lending, constructive sales, charitable contributions, and adjustments to the Corporate Alternative Minimum Tax (CAMT) to exclude unrealized mark-to-market gains from accounting statements.[4]
Congressional Momentum Builds
Recent activity underscores urgency. The House Ways and Means Oversight Committee held a July 16, 2025, hearing titled ‘Making America the Crypto Capital of the World,’ following the OBBBA enactment.[4] The PARITY Act overlaps with White House recommendations and prior bills like the 2022 Lummis-Gillibrand Act, though differences remain.[1][4]
Experts predict 2026 legislation is likely, driven by bipartisan interest, Treasury input, and White House backing.[1][4] IRS final regulations from July 2024 require brokers to report sales and exchanges, with ‘Yes/No’ questions on tax forms capturing mining, staking, forks, and disposals.[5][6]
| Key Proposal | Description | Status |
|---|---|---|
| De Minimis Threshold | $200/transaction exemption for stablecoins | Discussion Draft; Bipartisan bills[2][4] |
| Mining/Staking Tax | Ordinary income on receipt | Principles outlined; Needs legislation[3][7] |
| Broker Reporting | Form 1099 for platforms from 2025 | Final regs; Transitional relief[5][6] |
| Asset Class | Hybrid securities/commodities rules | White Paper; Hearings[1][3] |
Implications for Taxpayers and Industry
These reforms promise clarity amid crypto’s trillion-dollar market. Simplified de minimis rules could boost mainstream adoption for payments, while robust reporting curbs illicit activity and evasion.[3][5] Internationally, sourcing rules for cross-border trades remain complex, potentially driving tax avoidance if unaddressed.[3]
The IRS’s 2025 cryptocurrency task force and enforcement actions, including prosecutions, highlight compliance risks.[5][6] Taxpayers must now answer digital asset questions on returns, covering receipts from services, rewards, mining, staking, forks, sales, or trades.[5]
Stablecoins face specific withholding rules, with a 30-day grace period if they lose peg status.[6] For corporate filers, CAMT exclusions prevent double-counting unrealized gains.[4]
Outlook for 2026
With Congress eyeing year-end packages potentially bundling these with tax extenders, passage chances rise.[2] Analysts forecast ‘hot’ legislative activity, possible IRS guidance rollbacks on DeFi, and a pro-crypto tilt under Trump.[1]
The Bipartisan Policy Center urges rules that foster innovation without sacrificing revenue, positioning the U.S. as a digital asset leader.[7] As hearings continue, stakeholders watch for a balanced framework benefiting investors, businesses, and the economy.
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