The House Ways and Means Committee on June 9, 2026 held its first legislative hearing on comprehensive digital asset taxation — the most procedurally significant crypto tax action since the IRS classified virtual currencies as property in Notice 2014-21 twelve years ago. The committee circulated ...
"We have forced 21st-century financial innovation into 20th-century tax rules, producing entirely predictable results." — Lawrence Zlatkin, VP of Tax, Coinbase
The House Ways and Means Committee on June 9, 2026 held its first legislative hearing on comprehensive digital asset taxation — the most procedurally significant crypto tax action since the IRS classified virtual currencies as property in Notice 2014-21 twelve years ago. The committee circulated seven discussion-draft bills covering de minimis exemptions, staking and mining reward deferrals, wash sale rule extensions, stablecoin tax treatment, charitable donation relief, and securities framework alignment.
The hearing marks the emergence of tax policy as the "third leg of the stool" in U.S. crypto regulation, alongside the GENIUS Act (stablecoins) and the CLARITY Act (market structure). Four witnesses — from Fidelity Investments, Coinbase, Coin Center, and NYU Tax Law Center — testified before the full committee. Chairman Jason Smith (R-MO) cited 67 million American crypto holders, a $3.2 trillion market capitalization, and an untenable compliance status quo as justification for action. The committee faces a written submission deadline of June 23, 2026, after which markup timing remains uncertain.
The bills represent a "divide and conquer" legislative strategy: splitting proposals into separate drafts rather than one omnibus bill, allowing bipartisan coalitions to form around individual provisions. EY Americas Crypto and Digital Asset Tax Leader Tom Shea noted the tax bills can advance independently from market structure legislation, relying on definitions already enacted in the GENIUS Act.
The committee released six named bills and one undisclosed procedural draft. Each targets a specific gap in the existing Internal Revenue Code as applied to digital assets.
H.R. 9178 — Less Tax Paperwork for Digital Asset Owners Act (Rep. Rudy Yakym): Exempts transaction fees below $10 per transaction from capital gains reporting, capped at 5,000 transactions per taxpayer per year. Also excludes minor stablecoin gains and losses from taxable events. Coinbase testified that roughly half of its 800 million annual transaction filings involve amounts under $100, indicating the scale of the compliance burden this bill addresses.
H.R. 9175 — Tax Clarity for Mining and Staking Act (Rep. Mike Carey): Allows proof-of-work miners and proof-of-stake validators to defer income recognition on block rewards until sale or disposition, rather than at receipt. Current treatment under IRS Revenue Ruling 2023-14 requires ordinary income recognition at fair market value upon receipt — creating situations where validators owe tax on $100 in received tokens that may have fallen to $50 before sale.
H.R. 9173 — Charitable Deductions for Digital Asset Donations Act (Rep. Mike Kelly): Eliminates the qualified appraisal requirement for digital asset donations exceeding $5,000. The rationale: exchange-traded digital assets have transparent, verifiable pricing that makes independent appraisal redundant.
H.R. 9176 — Providing Analogous Rules for Digital Assets Act (Rep. David Kustoff): Extends securities lending and trading safe harbors to digital assets. Adds mark-to-market accounting election availability for digital asset traders.
H.R. 9172 — Applying Existing Tax Anti-Abuse Rules to Digital Assets Act (Rep. Jodey Arrington): Extends wash sale rules (IRC Section 1091) and constructive sale rules to digital assets.
Voluntary Disclosure Program Act (Rep. Aaron Bean): Creates a limited, one-time voluntary disclosure program for taxpayers with past digital asset tax compliance errors.
Digital Asset PARITY Act (Reps. Max Miller, R-OH, and Steven Horsford, D-NV): Introduced May 19, 2026, this bipartisan companion bill offers a five-year deferral election for mining and staking rewards.
Under current law, no de minimis exemption exists for digital asset transactions. Every disposal — including buying a coffee with bitcoin — is a reportable taxable event requiring Form 8949 filing. The IRS began receiving 1099-DA broker reports for the 2025 tax year, generating hundreds of millions of forms annually.
Three competing threshold proposals are now in circulation:
| Proposal | Per-Transaction Threshold | Annual Cap | Scope | |----------|--------------------------|------------|-------| | H.R. 9178 (Yakym) | $10 (gas fees only) | 5,000 transactions | Network fees | | Ways and Means drafts | $200–$600 (under discussion) | TBD | General transactions | | Lummis Senate bill | $300 | $5,000 | General transactions, inflation-adjusted |
The spread between $10 and $600 reflects an unresolved policy question: whether to provide narrow relief for gas fees alone or broad relief enabling everyday crypto payments. Industry groups including the Crypto Council for Innovation (CCI), the Digital Chamber, and Coinbase are actively lobbying for higher thresholds. CCI CEO Alison Mangiero stated: "Getting the tax treatment of digital assets right is essential to compliance, to everyday use."
A separate stablecoin provision would treat dollar-pegged stablecoins compliant with the GENIUS Act as functional cash equivalents. According to EY's Tom Shea, the "deemed-basis rule" would eliminate gain/loss tracking for routine stablecoin purchases unless the basis falls below 99% of redemption value.
The tax treatment of validation rewards generated the hearing's sharpest disagreements. The core problem: 70% of staking infrastructure across major blockchain protocols now operates outside the United States, according to CCI data. Fidelity's Sarah Reilly testified that "tax uncertainty has real and harmful consequences — it incentivizes the offshoring of innovation and infrastructure."
Current treatment: IRS Revenue Ruling 2023-14 classifies staking rewards as ordinary income at fair market value upon receipt or the moment the taxpayer gains dominion and control.
H.R. 9175 (Carey): Full deferral until sale or disposition, with no time limit.
PARITY Act (Miller/Horsford): Deferral election limited to five years.
The policy split at the hearing was clear. Coin Center's Jason Somensatto argued that newly issued block rewards should be taxed upon sale, not creation, drawing an analogy to self-created property. NYU's Michael Kaercher opposed indefinite deferral, warning it violates parity with traditional finance and could enable permanent tax avoidance through partnership structures with stepped-up basis at death. He suggested deferral windows "as low as a year" could address liquidity concerns while preserving revenue integrity.
Rep. Lloyd Doggett (D-TX) characterized the mining and staking bills as providing "special tax advantages" rather than addressing compliance gaps — a signal that Democratic support may require tighter guardrails.
The PARITY Act's five-year window represents a compromise position. EY's Shea noted this represents "significant deviation from prior proposals" and could shape the final legislative text.
Under current law, IRC Section 1091 wash sale rules apply to securities but not to digital assets classified as "property." This allows crypto traders to sell at a loss, immediately repurchase the same asset, and claim a tax deduction — a strategy unavailable to stock traders.
H.R. 9172 would close this gap by extending the 30-day restriction to digital assets. Traders would need to wait 30 days before repurchasing a "substantially identical" asset to preserve loss deductions.
The provision drew criticism from Coin Center's Neeraj Agrawal, who stated: "Congress wants to extend wash-sale rules to crypto. Doing so would make everyday crypto use, DeFi, and multi-wallet tracking nearly unworkable."
The implementation challenge is definitional. For equities, "substantially identical" is relatively straightforward. For digital assets, the question of whether wrapped tokens, liquid staking tokens, or bridged versions of the same asset qualify as "substantially identical" remains unanswered.
The American Bankers Association has lobbied in favor, arguing current rules unfairly advantage crypto over traditional assets.
The four-witness panel exposed a policy divide between industry participants seeking competitive tax treatment and academic experts advocating revenue neutrality.
Sarah Reilly, VP & Senior Tax Counsel, Fidelity Investments: Emphasized that "most relevant tax rules were written without contemplating digital assets," affecting not only crypto-native firms but the broader financial sector handling tokenized securities and funds.
Lawrence Zlatkin, VP of Tax, Coinbase: Disclosed that Coinbase files approximately 800 million transaction reports annually, roughly half involving amounts under $100. Supported securities lending provisions and de minimis relief.
Jason Somensatto, Policy Director, Coin Center: Advocated for self-created property treatment of block rewards and de minimis exemptions. Positioned these as compliance simplification rather than tax preferences.
Michael Kaercher, Deputy Director, NYU Tax Law Center: The panel's dissenting voice, opposing indefinite deferral elections and warning about "stepped-up basis" avoidance. Supported shorter deferral windows and parity with existing financial instrument treatment.
Committee fault lines were partisan but not rigid. Chairman Smith and Rep. Yakym led the push for comprehensive relief. Ranking Member Richard Neal (D-MA) urged caution: "It's easier to put something into the tax code than take it out." Rep. Horsford (D-NV) co-sponsored the PARITY Act but proposed the five-year deferral cap, indicating Democratic willingness to engage on narrower terms.
Chairman Smith's decision to circulate seven separate drafts rather than a single omnibus bill is procedurally deliberate. According to legislative analysis, this approach enables different coalitions to form around each provision, reducing the risk of a blanket veto from any faction.
Key dates and milestones:
The tax bills can advance without the CLARITY Act (market structure legislation), per Shea's analysis, because they rely on definitions from the already-enacted GENIUS Act. This independence gives tax reform a potentially faster legislative path.
However, open questions remain. The de minimis threshold for everyday purchases has been referred to Treasury for further study. Source jurisdiction rules for cross-border transactions — critical for determining where staking income is taxed — remain a gap. Over 50% of American crypto holders report not understanding when holdings become taxable, according to CCI survey data.
State-level action adds complexity. Illinois and other states are proposing new digital asset transaction taxes that could undermine federal clarity efforts.
The June 9 hearing moved crypto taxation from a policy afterthought to an active legislative workstream. The seven-bill architecture gives the committee flexibility to advance consensus provisions — de minimis relief and charitable donation simplification appear to have the broadest support — while continuing to negotiate contentious items like deferral periods and wash sale implementation.
The economic logic is straightforward. A $3.2 trillion asset class held by one in four Americans currently operates under tax rules written for an era before smartphones, creating compliance friction that pushes infrastructure offshore and generates hundreds of millions of low-value tax filings. Whether Congress resolves this before or after midterm elections will depend on markup scheduling and the ongoing reconciliation process.
The written submission deadline of June 23 will produce additional industry and academic input. The committee's next procedural step — marking up individual bills or combining provisions into a single vehicle — will determine whether crypto tax reform becomes law in the 119th Congress or carries over to the 120th.