U.S. lawmakers urge IRS to revisit staking taxes before 2026

Eighteen members of the House of Representatives, led by Rep. Mike Carey, sent a letter to Scott Bessent, who is serving as both U.S. Treasury Secretary and acting head of the IRS. In the letter, they ask the agency to “promptly revisit and update” its staking guidance before the 2026 tax year begins, and to explain the reasoning behind the IRS position issued in 2023.

At the center of the dispute is Revenue Ruling 2023-14. In that ruling, the IRS said that a cash-method taxpayer must include the fair market value of “validation rewards” in gross income in the year they gain “dominion and control” over them, meaning the moment the taxpayer can actually use, transfer, or otherwise dispose of the rewards.

The lawmakers argue that this framework misses how staking works in practice. In their view, both staking and mining involve a participant becoming the first owner of newly created property. Under traditional tax logic, newly created property typically creates a taxable event when it is sold or otherwise disposed of, not at the moment it is created.

They also point to day-to-day compliance problems. If rewards are taxed immediately, taxpayers have to pin down the value at the exact time of receipt and may end up paying tax on a price that swings sharply days later. The letter calls this system hard to follow and awkward to administer. There is also a competitiveness angle: millions of Americans hold tokens, and proof-of-stake networks rely on staking participation for security. When the rules turn into a constant “minute-by-minute accounting” exercise, some people simply opt out.

The lawmakers place their request in a broader policy context as well. They reference a 2025 administration report in which Treasury and the IRS recommended revisiting earlier guidance on when income from staking and mining should be recognized.

At the end of the letter, the group lays out five questions for the IRS:

1. What considerations drove the choice to tax rewards as “income now”?
2. Before issuing the ruling, did the IRS study how blockchains operate and how realistic compliance would be?
3. Did the agency evaluate the impact on U.S. technological competitiveness?
4. Does the IRS plan to issue updated or supplemental guidance?
5. Are there administrative hurdles that would prevent changes by the end of 2025?

In parallel, lawmakers have also floated broader crypto tax ideas. One draft proposal mentioned in the debate would ease the burden for everyday users by exempting small stablecoin payments from capital gains tax and allowing taxpayers to defer taxes on staking and mining rewards for an undefined period.