The U.S. House Ways and Means Committee on June 9, 2026 held its first legislative hearing on digital asset taxation in years, reviewing seven discussion-draft bills that collectively represent the most significant proposed overhaul of crypto tax rules since the IRS classified digital assets as p...
"Americans shouldn't need an accountant to buy jeans." — Lawrence Zlatkin, VP of Tax, Coinbase
The U.S. House Ways and Means Committee on June 9, 2026 held its first legislative hearing on digital asset taxation in years, reviewing seven discussion-draft bills that collectively represent the most significant proposed overhaul of crypto tax rules since the IRS classified digital assets as property in 2014. The drafts address six core friction points: a $10 de minimis exemption for network fees, stablecoin gain/loss relief, mining and staking reward deferral, wash-sale rule extension, securities-law analogue treatment, and a voluntary disclosure amnesty program.
No markup or floor vote occurred. The hearing was a discussion session — a necessary procedural step, but not legislation. The bills now face committee markup, potential reconciliation with the Senate's competing PARITY Act, and uncertain floor scheduling before the August recess. The economic stakes are material: 67 million Americans hold crypto, according to Committee Chairman Jason Smith (R-MO), and 88% of centralized exchange trading volume occurred on non-U.S. platforms in 2025.
The timing is not coincidental. The hearing follows two other pillars of the emerging U.S. crypto regulatory framework — the GENIUS Act (stablecoin regulation) and the pending market structure bill — making tax policy what the Crypto Council for Innovation termed "the third leg of the stool." Meanwhile, a June 4 Tax Court ruling in Paschall v. Commissioner affirmed that staking rewards are taxable upon receipt, adding judicial urgency to the legislative effort.
The Ways and Means Committee circulated seven discussion drafts ahead of the hearing. Each addresses a distinct segment of the crypto tax code:
| Bill | Name | Core Provision | |------|------|----------------| | H.R. 9178 | Less Tax Paperwork for Digital Asset Owners Act | $10 de minimis for network fees; stablecoin gain/loss exclusion | | H.R. 9175 | Tax Clarity for Mining and Staking Act | Elective deferral of mining/staking income to point of sale | | H.R. 9173 | Charitable Deductions for Digital Asset Donations Act | Simplified appraisal rules for widely traded digital asset donations | | H.R. 9176 | Providing Analogous Rules for Digital Assets Act | Extends IRC § 864 safe harbor, § 1058 lending rules, § 475 mark-to-market to digital assets | | H.R. 9174 | Digital Assets Voluntary Disclosure Program Act | Amnesty for prior non-compliant crypto tax filings | | H.R. 9172 | Applying Existing Tax Anti-Abuse Rules to Digital Assets Act | Extends wash-sale rule to digital asset transactions | | (Unnumbered) | Additional staking amendment (Horsford) | Limits deferral election to five years |
The bills were introduced with bipartisan participation. Rep. Steven Horsford (D-NV) proposed the five-year deferral cap amendment, signaling Democratic willingness to engage on terms, not just on principle.
Under current IRS rules, every disposition of a digital asset — including paying a $0.50 network fee — constitutes a taxable event requiring gain/loss computation. According to testimony from Coinbase VP of Tax Lawrence Zlatkin, the exchange processed approximately 800 million transactions, with roughly 50% valued under $100. Separately, data presented at the hearing indicated that 50% of 2025 Forms 1099-DA were filed for amounts below $10.
H.R. 9178 would exempt network transaction fees under $10 from taxable-event treatment, capped at 5,000 transactions per taxpayer per year. The exemption does not apply to brokers, dealers, or validators. It also does not apply to everyday spending — purchasing goods with appreciated Bitcoin remains a reportable event.
Sarah Reilly, VP and Senior Tax Counsel at Fidelity Investments, testified that the current framework "affects not only those directly involved in the crypto space, but also the financial sector at large," noting that tax uncertainty produces "inconsistent outcomes" and incentivizes offshoring of development activity.
The limitation is notable: a $10 cap on gas fees is functionally useful on Ethereum (where median gas costs often run $0.50–$3.00) but provides no relief for actual commerce. Sen. Cynthia Lummis's competing Senate bill proposes a $300 per-transaction threshold with a $5,000 annual cap — a substantially broader exemption.
H.R. 9175, the Tax Clarity for Mining and Staking Act, addresses what the industry calls "phantom income" — the obligation to pay tax on staking or mining rewards at the moment tokens are received, before any sale occurs. Under current IRS guidance, a validator earning 100 ETH in staking rewards in January at $3,500 per token owes income tax on $350,000 even if the token's value drops 50% by April.
The bill would allow taxpayers to elect treatment of newly minted digital assets as self-created property, deferring taxation until sale or disposition. Horsford's amendment would cap that deferral at five years.
The hearing exposed a clear fault line. Supporters of deferral, including Zlatkin and Somensatto, argued the current system discourages U.S.-based participation in network validation. Approximately 70% of staking infrastructure across the top 10 blockchain protocols is currently located offshore, according to data cited by the Crypto Council for Innovation.
Opponents, led by Michael Kaercher, Deputy Director of the Tax Law Center at NYU Law, warned that deferral "violates parity with traditional finance and the principle that income is taxed on receipt." He noted that deferred staking income could become a permanent tax elimination through stepped-up basis at death, converting what was intended as timing relief into a structural loophole. Kaercher did suggest that a deferral window "as low as a year" could address the liquidity concern without creating generational tax arbitrage.
H.R. 9172 would extend the existing wash-sale rule (IRC § 1091) to digital assets. Currently, because crypto is classified as property rather than securities, taxpayers can sell at a loss, immediately repurchase the same token, and claim the tax deduction — a strategy explicitly prohibited for stocks and bonds.
The Joint Committee on Taxation previously estimated that applying wash-sale restrictions to crypto would raise $16.8 billion over a decade. That provision was stripped from the Inflation Reduction Act in 2022 and has remained dormant until now.
The PARITY Act, introduced separately by Reps. Miller (R-OH) and Horsford (D-NV) on May 19, 2026, also includes wash-sale extension — suggesting this provision has broader bipartisan support than other elements of the package. The logic is straightforward: the same tax arbitrage that was closed for equities decades ago remains open for a $3.2 trillion asset class.
H.R. 9178 would exclude gains and losses on "regulated payment stablecoins" from taxable-event treatment, provided the cost basis does not deviate more than 1% from the redemption value. The PARITY Act sets a parallel threshold at $200 per transaction for stablecoins issued by federally regulated entities.
The rationale is functional: dollar-pegged stablecoins with sub-cent fluctuations generate de minimis gains and losses that create reporting burden without meaningful revenue. Under current rules, converting $100 USDC to $100.003 in cash constitutes a taxable event. The bills would treat these instruments closer to cash equivalents for tax purposes.
This provision aligns with the GENIUS Act's regulatory framework, which is expected to take effect January 18, 2027. New York's Department of Financial Services moved first, proposing Part 202 regulations on June 9 — the same day as the hearing — to align state stablecoin rules with the federal framework.
The legislative effort now operates alongside active judicial proceedings. On June 4, 2026, the U.S. Tax Court issued Paschall v. Commissioner (T.C. Memo. 2026-46), the first judicial ruling on the taxability of staking rewards. The court held that staking rewards are gross income under IRC § 61 at the moment they are credited to the taxpayer's account, applying the Glenshaw Glass "dominion and control" standard.
The taxpayer, who earned $33,354 in Cardano staking rewards via eToro in 2021, argued the rewards were not income until sold. The court disagreed, finding the tokens were "subject to no sale restrictions and could be converted to cash at any time."
Paschall is a Tax Court Memorandum opinion — persuasive but not binding precedent. However, the separate Jarrett v. United States case, which advances the "created property" theory that staking rewards are analogous to crops or authored works, has a bench trial scheduled for September 29, 2026 in the Middle District of Tennessee. If the Jarrett court disagrees with Paschall, a circuit split could force the issue to higher courts.
H.R. 9175's deferral provision would effectively moot the Paschall outcome legislatively, but only if enacted before the Jarrett trial concludes.
Chairman Smith framed the hearing around competitiveness: "Recent data indicate that a quarter of Americans, or over 67 million people, own cryptocurrency. That's a dramatic increase from only 3 percent at the start of this decade."
The competitive gap is quantifiable. Singapore imposes zero capital gains tax on individual crypto holdings. Switzerland charges no capital gains tax on private crypto, applying only a 0.3–1% annual wealth tax. The United States taxes short-term gains at rates up to 37%.
According to data cited at the hearing, 88% of centralized exchange trading volume in 2025 occurred on non-U.S. platforms. Coin Center's Jason Somensatto argued that "the tax system assumes intermediaries that open networks do not require," creating structural friction that pushes activity offshore.
The OECD's Crypto-Asset Reporting Framework (CARF) adds a compliance layer: 52 jurisdictions, including Switzerland, have committed to first CARF exchanges by 2027. The U.S. already mandates Form 1099-DA reporting starting with 2025 transactions, but the absence of coherent domestic tax rules means reporting obligations exist without corresponding tax clarity.
More than 50% of American crypto holders do not understand when their holdings are taxable, according to survey data presented at the hearing. That is not an adoption problem — it is a compliance infrastructure problem.
The seven bills represent the most comprehensive congressional attempt to address crypto taxation since the IRS's 2014 property classification in Notice 2014-21. The economic case for action is supported by data: 67 million holders, $3.2 trillion in market capitalization, 800 million transactions at a single exchange, and a Tax Court ruling that resolved one question while raising others.
The structural challenge remains what it has been since 2014: digital assets do not fit neatly into existing tax categories. They are property that functions like currency, generates yield like securities, and is created like intellectual property. Each of the seven bills addresses one facet of that mismatch. None addresses all of them.
The path forward depends on whether committee markup produces a unified bill before August recess, whether the Senate's PARITY Act framework converges with the House package, and whether the Jarrett trial in September alters the judicial landscape enough to change legislative urgency. Until then, the current tax code — built for a pre-crypto financial system — continues to apply to a $3.2 trillion asset class that 67 million Americans use and that more than half of them do not know how to report.