House lawmakers unveiled a 114-page crypto tax bill on Sept. 15. It offers relief for small network fees and expands wash-sale rules. The Ways and Means Committee will consider it at its Sept. 16 markup.
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What Does the Crypto Tax Bill Change?
Committee Chair Jason Smith unveiled the Digital Asset Tax Certainty Act following the drafting of two separate proposals. According to Bloomberg Government, the Republican from Missouri released the draft package on Monday evening. The draft contains proposals related to taxes on transactions, gains, losses, transfers, mining, staking, wash sales, and brokers.
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The draft legislation includes provisions drafted using the Republican proposals and the bipartisan proposals of Reps. Steven Horsford and Max Miller. Documents from the committee show that H.R. 10357 is due for markup at 10:00 a.m. ET on Wednesday. The lawmakers will mark up the draft alongside other non-related tax and health care laws.
One provision seeks to reduce tax on transactions and network fees of less than $10. This provision seeks to address the issue of small blockchain transactions that give rise to tax-reporting obligations under existing tax laws. The exemption applies to persons who made over 5,000 transactions in the past year.
Who Benefits From Small-Fee Relief?
A small fee allowance would primarily benefit low-volume users engaged in regular transactions involving digital assets. The measure would be used to lower the reporting in regard to low blockchain costs. High-volume users will not qualify for the carve-out under the 5,000-transfers threshold.
Smaller transactions had been discussed by Congress during its consideration of the House tax bill. Members of Congress were already contemplating the reduction of reporting obligations of digital asset users back in June. Mining, staking, and other common operations were also discussed at that time.
Broker reporting was also becoming more comprehensive under federal legislation. IRS rules required tracking on a wallet-by-wallet basis, and broker reporting of gross proceeds became mandatory on Form 1099-DA starting from 2025. Phased-in cost basis reporting would apply to transactions conducted in 2026.
Coinbase advocated for the relief of small payments during the prior discussion in the House. In testimony at a Ways and Means hearing on June 9, Coinbase Vice President of Tax Lawrence Zlatkin said that stablecoin payments and blockchain fees entail a significant burden. Coinbase also advocated for delayed tax treatment of mining and staking rewards.
Why Are Wash-Sale Rules Being Expanded?
Under the crypto tax bill, wash sale rules will apply to digital assets. Federal wash sale rules currently apply restrictions on the recognition of loss if the taxpayers repurchase substantially similar securities shortly after the loss has been claimed. Digital assets are not currently included under the statutory rule.
The inclusion of such a rule originates from H.R. 9172, known as the Applying Existing Tax Anti-Abuse Rules to Digital Assets Act. Representatives Jodey Arrington and Mike Carey had introduced the act in June. Qualified US dollar stablecoins were exempted from the rule on wash sale.
The wash sale rule is expected to generate revenue amounting to $2.074 billion from 2026 to 2036. It is believed that existing rules should adapt to changes in financial technology. According to Smith, taxpayers need some standardization for digital assets.
How Would Mining and Staking Be Treated?
Earlier proposal by the House regarding changing the timing of taxes related to mining and staking. H.R. 9175, or the Tax Clarity for Mining and Staking Act, would allow the taxpayers to defer the income recognition if there is a sale of the newly minted tokens.
It was estimated that this would result in a loss of federal revenue amounting to $2.956 billion between fiscal years 2026 and 2036.
Currently, the staking rewards are treated as ordinary income once the taxpayer obtains dominion and control. Its value during that period becomes the cost basis of any future gain or loss of the asset. Industry associations have called on the lawmakers to defer the taxation upon a sale of staking rewards.
The Blockchain Association, Crypto Council for Innovation, and Digital Chamber opposed the limit of five years to deferred taxation. They have urged Congress to adopt H.R. 9175 without changes.
The banking organizations stated that delayed taxation could provide a crypto reward tax treatment different from interest, dividends, and other income types of investments.
As reported by Punchbowl News on Sept. 13, the Republicans in the Ways and Means Committee were considering removing the mining and staking timing provision from the legislation package.
Sources familiar with the negotiations called it a major point of contention with Horsford. The final committee debate will show whether lawmakers retain, revise, or remove those provisions.
When Will the Crypto Tax Bill Move Forward?
In terms of the crypto tax bill, the September 16 markup comes after a Ways and Means hearing held on June 9 on multiple digital asset tax measures, which involved Coinbase, Fidelity Investments, Coin Center, and New York University’s Tax Law Center.
The hearing covered various topics such as mining, staking, charitable contributions, voluntary disclosures, wash sales, and more tax-related matters.
The September 16 markup will be the next official proceeding in the passage of H.R. 10357. Committee members can discuss the bill text, propose amendments, and vote on advancing it. Passing of the tax package will take it a step closer to becoming a law, while rejection will put it at risk of further delays.
It is not the only legislative action taking place on crypto this week in Washington. The Senate plans to make a procedural vote on the CLARITY Act on September 15; 60 votes will be necessary to advance the market structure measure. While these legislative packages target different parts of the crypto federal policy.
The crypto tax bill will be considered by the Ways and Means Committee together with the EFIN Verification Act of 2026, H.R. 10334, and five other bills. These other bills deal with healthcare and cobalt mining and some other policy areas. The markup will define the future of the crypto tax bill.
Lawmakers managed to incorporate several tax proposals into one package. Now the crypto tax bill covers small fee relief, anti-abuse provisions, broker reporting requirements, and several digital asset tax matters. The September 16 markup will show what happens to the package of the crypto tax bill in the House.
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