The US legislators require the IRS to reconsider crypto staking tax regulations by 2026. There is a possibility that the end of double taxation is at hand, following the bipartisan push in Washington.
The IRS has been challenged to reform crypto staking tax regulations by eighteen bipartisan House legislators. They wrote to the acting Commissioner Scott Bessen,t urging them to act. The existing regulations tax staking rewards twice, which is deemed by critics as an unfair burden.
According to Steph Is Crypto on X, the proposed reforms include major changes. “BREAKING: HOUSE LAWMAKERS INTRODUCE NEW CRYPTO TAX BILL,” the account posted. The bill would exclude payments made in the form of stablecoins that are less than 200 and permit a deferral in staking and mining taxes of up to five years.
💥BREAKING:
🇺🇸 HOUSE LAWMAKERS INTRODUCE NEW CRYPTO TAX BILL:
• STABLECOIN PAYMENTS UNDER $200 TAX-FREE
• STAKING & MINING TAX DEFERRAL UP TO 5 YEARS
• CRYPTO TAX RULES ALIGNED WITH SECURITIES LAW
• WASH TRADING LOOPHOLES TARGETED pic.twitter.com/N4z9ncdvWR
— STEPH IS CRYPTO (@Steph_iscrypto) December 21, 2025
Source:Steph
The initiative in Washington is being fronted by Representative Mike Carey. According to him, the existing regulations discourage Americans from locking in blockchain networks. The letter cautions against administrative overheads that could endanger U.S. leadership in the field of digital assets.
Why Current Rules Spark Outrage
In 2023, the IRS released Revenue Ruling 2023-14, which treats staking rewards as taxable income. Even in the case market value is low, investors are taxed upon the receipt of rewards. They are again subject to capital gains taxes at the time of sale.
This system of double taxation contradicts the usual principles of property law. Lawmakers say that stakers are the ones who create new property, like gold miners. That new property should not be taxed until it is sold.
The letter highlights that network security relies on active participation. There are millions of Americans with tokens in proof-of-stake networks, and the existing tax complexity makes it prohibitive, as long as they have tokens at stake.
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Game-Changing Proposals Emerge
The coalition proposed by Carey will impose a tax on rewards being sold. This would align taxation to real economic gains, hence investors would not be taxed on changes in values that have not been realized.
Complementary legislation was introduced by the representatives Max Miller and Steven Horsford. Their PARITY Act provides alternative deferral provisions, which allow taxpayers to defer recognition over a maximum of five years.
The leaders of the industry support the reform push. According to Miller Whitehouse-Levine of the Solana Policy Institute, fair taxation is necessary. He said that this vital infrastructure activity should be promoted in the U.S. tax code.
Clock Ticking Toward 2026 Deadline
The lawmakers requested advice that would address barriers in administration and request revised rules by the end of the year. The delay would cement dubious rules on 2026 tax filings.
Ji Hun Kim of Crypto Council of Innovation emphasized the urgency. He explained that staking was a critical blockchain infrastructure. Tax regulations in the U.S. had to match the reality of the economy, he said.
Staking tax guidance has been previously recommended to be reviewed by the Trump administration. The problem was brought to light by a 2025 report on digital financial technology by the White House. Authorities admitted that changes or rechangers could be needed.
The bipartisan letter is an indication of increased congressional agreement. Both sides acknowledge that the old-fashioned regulations are a barrier to American blockchain competitiveness. The momentum of reforms is gaining steam towards 2026.