IRS Calls Crypto Staking Taxable Amid Ongoing Lawsuit

The IRS maintains that crypto staking rewards are taxable upon receipt, according to a Dec. 20 court filing reported by Bloomberg. This position is at the center of a legal dispute with Joshua and Jessica Jarrett, a Tennessee couple staking on Tezos, who argue rewards should only be taxed when sold.

The IRS rejected the claim that staking creates "new property," asserting that tax liability arises immediately. This closely-watched case could set a precedent for taxing staking rewards across proof-of-stake blockchains in the U.S.