Crypto Groups Urge Congress to Pass Staking, Mining Tax Bill

Three crypto trade groups — the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber — sent a joint letter on Sunday to House Ways and Means Chair Jason Smith and top Democrat Richard Neal urging passage of the Tax Clarity for Mining and Staking Act “as introduced.” The letter said the bill would resolve uncertainty over how mining and staking rewards are taxed.

Under current IRS guidance, miners and stakers typically must recognize income when rewards are received. The lobbying groups described that treatment as “taxation of phantom income,” noting taxpayers can owe tax on tokens they cannot immediately sell. The bill would let taxpayers choose to report rewards at receipt or when they sell the assets. The groups argue that option would reduce liquidity pressures for individuals and entities that hold tokens for network security or operational reasons.

The bill was introduced earlier this month and has not advanced past the Ways and Means Committee. Democratic Representative Steven Horsford filed an amendment to limit the deferral option to five years. Ji Hun Kim, CEO of the Crypto Council for Innovation, posted on X that Horsford’s amendment would “break” the bill and produce “negligible revenue.”

The banking industry pushed back. The American Bankers Association warned the bill would create “a significant advantage over nearly every other way Americans save, invest and earn returns today.” The ABA added that when a company pays a dividend, shareholders receive the value and pay tax that year, contrasting that treatment with the proposed approach for crypto rewards.

Lobbyists for the bill cautioned that reopening negotiations could revive the issues the measure seeks to resolve and might stall a narrowly negotiated bipartisan result. Backers have called for an up-or-down vote on the bill as introduced; opponents and some lawmakers want changes they say would prevent preferential treatment of crypto assets.

Separately, Congress is considering the PARITY Act, which would direct the IRS to study exemptions for small crypto transactions. Industry groups have raised concerns about reporting burdens from high volumes of low-value trades. In April, the exchange Kraken reported sending 56 million tax forms to the IRS, saying nearly one-third covered transactions worth less than $1 and more than 75% covered transactions under $50.

The Ways and Means Committee has not advanced the staking and mining bill. If the committee holds a scheduled hearing, members will be able to question proponents and opponents and consider amendments.