Washington, D.C. (Sept. 8, 2023) – Today, Blockchain Association 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. The Association offered the following recommendations:
- Congress Must Create Symmetry Between the Tax Treatment of Digital and Non-Digital Assets where appropriate. While digital assets differ from traditional financial assets, and Congress should recognize their unique characteristics, digital assets should receive the same treatment under the tax code in some instances.
- Clarity is Needed Regarding the Timing and Source of Income Earned from Staking and Mining. Most digital assets rely on a consensus mechanism to validate transactions, with different digital assets running on networks that use different consensus mechanisms. Tax compliance clarity from the IRS with respect to miners and stakers is needed.
- De Minimis Gains and Losses Should be Excluded from Tax Accounting. Congress should research and propose a de minimis threshold under which gains or losses on digital asset transactions may be excluded from tax reporting.
- Congress Must Delineate Tax Exempt Treatment for Digital Assets. Congress should clarify how digital assets are treated for purposes of tax-exempt activities.
- Congress Should Decline to Enact the Digital Asset Mining Excise Tax Proposal. The Biden Administration’s 2024 “Green Book” proposal to impose a digital asset mining energy excise tax should be opposed.
- Congress Should Pass the Keep Innovation in America Act. Congress should adopt the bipartisan Keep Innovation in America Act, which seeks to reverse certain provisions of the Infrastructure Investment and Jobs Act that creates barriers to the development of the digital asset industry.
The Association appreciates the work of Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo and their commitment to learn more about ways to improve the tax treatment of digital assets. The Association remains ready as a resource for Congress on behalf of industry to ensure clarity for the United States digital asset ecosystem.
About Blockchain Association: Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.