A bipartisan group of 18 U.S. House members is pressing the IRS to rework how crypto staking rewards are taxed — and fast. In a letter sent Friday to Acting IRS Commissioner Scott Bessent, led by Republican Rep. Mike Carey, lawmakers asked the agency to review and update what they called “burdensome” staking tax rules before 2026 begins. At issue is what critics say amounts to double taxation: under current guidance, token holders are taxed when they receive staking rewards and are taxed again when they sell those tokens. The lawmakers argue that taxing rewards only at the time of sale would better reflect investors’ actual economic gain and remove barriers to participation in staking, a core security mechanism for many proof-of-stake blockchains. “This letter is simply requesting fair tax treatment for digital assets and ending the double taxation of staking rewards is a big step in the right direction,” Carey said in the release. The letter warns that the existing treatment discourages taxpayers from staking — even though millions of Americans hold tokens and their participation is important for network security and U.S. leadership in the space. The group also asked the IRS whether any administrative obstacles would prevent updated guidance before the end of the year, framing reforms as consistent with the administration’s goal of “strengthening U.S. leadership in digital asset innovation.” Parallel legislative activity followed over the weekend: Reps. Max Miller and Steven Horsford introduced a discussion draft proposing broader tax relief for crypto users. Their measures would exempt small stablecoin transactions from capital gains tax and give taxpayers an elective deferral on staking and mining rewards. Under that proposal, taxpayers could choose to defer income recognition on such rewards for up to five years instead of being taxed immediately — a more incremental fix than the wholesale change urged in the House letter. Together, the letter and the discussion draft signal growing congressional pressure to ease the tax treatment of crypto staking as regulators and lawmakers wrestle with how tax rules should evolve alongside the industry. Read more AI-generated news on: undefined/news

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