“The committee’s legislation addresses key gaps in the tax code, including parity in tax treatment with comparable traditional financial asset transactions, clarity for tax situations unique to digital assets, and reduction in paperwork burdens for digital asset owners and brokers,” the chairman, Smith, summarized in a statement before the hearing.

One of the bills would address the longtime industry request that small transactions with very minimal gains should be exempted from tax reporting, which could ease the accounting burdens on users as well as freeing up digital assets to be used for routine payments. Another bill would eliminate the double-taxed scenario for mining and staking proceeds, which are taxed upon receipt and when they’re sold.

“If Americans want to pay with a stablecoin instead of a credit card or cash, they should be able to without a pile of tax paperwork,” Smith said during the hearing.

Mining deferrals

But one of the hearing’s witnesses, Mike Kaercher, deputy director of the Tax Law Center at NYU Law, said the bills still contain pitfalls, including his own objection to the mining-and-staking provision that could be abused.

“The problem is that the bill then provides an election for stakers and miners to defer income paid in the form of newly minted coins until disposition,” he said, suggesting it could create a new tax subsidy. He argued that it “violates parity with traditional finance and the principle that income is taxed on receipt.”

“Despite some thoughtful guardrails in the bill, it may be possible for taxpayers to permanently escape tax by earning rewards through certain business structures,” he said.

That concept drew significant attention from the committee’s Democrats, concerned about abuse of such deferral.

It’s unclear whether there will be a viable window for major crypto tax legislation before the current session of Congress ends at the close of 2026. It’s late in that session, and the agenda is already crowded, including with the remaining work on the crypto Clarity Act.

“Regulatory clarity and tax clarity go hand in hand,” said Kevin Wysocki, Anchorage Digital’s head of policy, in a post on social media site X. “If we want innovation, investment, and jobs to stay in America, policymakers need rules that are clear, workable, and built for modern technology.

For its part, the U.S. Senate hasn’t made significant progress on crypto tax bills, though Senator Cynthia Lummis has sought to move similar legislation through Congress’ upper chamber — so far unsuccessfully. Both chambers would ultimately need to approve legislation before it could become law that governs U.S. crypto activity.

A potential reduction of burden on taxpayers in the newly unveiled bills would also be shared by the Internal Revenue Services, which has already been inundated this year with a new tax-reporting regime. The U.S. tax agency has cut a significant portion of its staff under the administration of President Donald Trump at the same time as getting a rapidly increasing influx of crypto filings.

“Millions of Americans own or use digital assets, yet much of the tax code still treats this technology as though it were a niche experiment rather than a growing part of the financial system,” said Coinbase’s vice president of tax, Lawrence Zlatkin. “The result has been confusion for taxpayers, compliance challenges for businesses and unnecessary burdens for the IRS.”

Read More: U.S. House tax committee weighs crypto bills, including relief for small transactions

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