A bipartisan group of US lawmakers has asked the Internal Revenue Service to revisit its treatment of crypto staking rewards, arguing that current crypto staking tax laws result in unfair double taxation and discourage participation in blockchain networks.
In a letter sent Friday to IRS Acting Commissioner Scott Bessent, 18 members of the US House of Representatives called for updated guidance on how staking rewards are taxed. The effort is being led by Republican Representative Mike Carey of Ohio, who said the request is focused on ensuring fair tax treatment for digital asset holders.
“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 a statement included in the letter.
Under current IRS guidance, staking rewards are generally taxed as income when they are received and then taxed again when sold, based on any price appreciation. Lawmakers argue this approach does not reflect actual economic gains and creates unnecessary administrative burdens for taxpayers.
Lawmakers warn current crypto staking tax laws hurt participation
The letter proposes that staking rewards should instead be taxed at the time of sale. According to the lawmakers, this would ensure that stakers are taxed based on realized gains rather than on assets that may fluctuate in value or never be sold.
They warned that existing crypto staking tax laws are discouraging Americans from participating in staking, which they described as a fundamental component of many blockchain networks.
“Millions of Americans own tokens on these networks. Network security and American leadership require those taxpayers to stake those tokens, but today the administrative burden and prospect of over taxation discourages that participation,” the lawmakers wrote.
The group also asked the IRS whether there are any administrative barriers that would prevent updated guidance from being issued before the end of the year. They framed the request as aligning with the current administration’s stated goal of strengthening US leadership in digital asset innovation.
The push is not happening in isolation. Over the weekend, Representatives Max Miller of Ohio and Steven Horsford of Nevada introduced a separate discussion draft aimed at easing tax obligations for everyday crypto users.
Their proposal includes an exemption for small stablecoin transactions from capital gains taxes and introduces a deferral option for staking and mining rewards. Rather than eliminating immediate taxation entirely, the draft would allow taxpayers to defer income recognition on staking or mining rewards for up to five years.
While the approaches differ, both efforts signal growing bipartisan concern that existing crypto staking tax laws may be outdated as digital assets become more integrated into mainstream financial activity.
If adopted, changes to staking taxation could provide clarity for millions of US crypto holders while reducing compliance friction for a sector that policymakers increasingly view as strategically important.
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