Lawmakers with the U.S. Senate Financial Services Committee announced in July they would be accepting suggestions on how to tax crypto until Sept. 8.
The Blockchain Association, a United States-based cryptocurrency advocacy group, has submitted suggestions for lawmakers to consider in potential legislation on the tax treatment of digital assets.
In a Sept. 8 letter to U.S. Senators Ron Wyden and Mike Crapo, the Blockchain Association said lawmakers should support the Keep Innovation in America Act, a bill aimed at changing the reporting requirements for certain taxpayers involved in crypto transactions. According to the advocacy group, any legislation introduced in Congress should “create symmetry” between taxation of crypto and non-crypto assets, as well as clarify requirements for information on income earned from staking and mining crypto.
Some of the recommendations were similar to those proposed by crypto advocacy group Coin Center in August, including establishing a de minimis threshold aimed at excluding gains or losses of certain crypto transactions from tax reporting requirements. The Blockchain Association submitted the letter on the last possible day the U.S. Senate Financial Services Committee said it would be accepting responses following a July request.
“The Committee should focus on developing intentional, measured legislation concerning specific issues of taxation as they relate to digital assets,” said the Sept. 8 letter. “The Association urges the Committee to take care not to enact legislation that provides less-favorable tax treatment for digital assets as compared to other assets and rather, focus on developing legislation that would level the playing field for digital assets compared to other assets.”
1/ Today, we submitted a letter in response to the Senate Committee on Finance’s Request For Information (RFI) seeking policy input on the taxation of digital assets.https://t.co/4aF8XGfjpY pic.twitter.com/pEm3BfwuuH
— Blockchain Association (@BlockchainAssn) September 8, 2023
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Other suggestions for the two senators to consider included opposing a digital asset mining excise tax proposed by the Biden administration, claiming the measure could “inhibit the growth and development” of the crypto industry. The proposal, first announced in March as part of U.S. President Joe Biden’s FY2024 budget, would include a 30% excise tax on electricity used by crypto miners.
The call for crypto tax guidance by U.S. lawmakers followed a July 31 announcement from the Internal Revenue Service (IRS) stating that filers must report staking rewards as gross income in the year they were received, setting new standards for U.S. taxpayers in 2024. The IRS largely taxes the buying, selling, and exchange of crypto assets as capital gains and losses, with mining rewards subject to the same requirements.
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