The U.S. House Ways and Means Committee held its first legislative hearing on digital asset taxation in years on June 9, 2026, circulating seven discussion-draft bills that would overhaul how the IRS treats stablecoins, staking rewards, mining proceeds, and everyday crypto transactions. The heari...
"The digital asset status quo is untenable. America needs clear tax rules of the road to remain the crypto capital of the world." — Jason Smith, Chairman, House Ways and Means Committee
The U.S. House Ways and Means Committee held its first legislative hearing on digital asset taxation in years on June 9, 2026, circulating seven discussion-draft bills that would overhaul how the IRS treats stablecoins, staking rewards, mining proceeds, and everyday crypto transactions. The hearing exposed a bipartisan divide over the pace and scope of reform, with Ranking Democrat Richard Neal describing the committee mood as "healthy skepticism" and Republican Chairman Jason Smith pushing for rapid progress.
The drafts collectively address a $28 billion estimated tax-revenue gap identified by the Joint Committee on Taxation, touching 67 million Americans who now hold cryptocurrency — roughly one-quarter of the adult population, according to Smith's opening remarks. No markup or vote occurred. Written submissions close June 23, 2026. The hearing marks the opening round of a tax fight that runs parallel to the CLARITY Act market-structure bill awaiting a Senate floor vote.
Chairman Smith's decision to advance seven separate discussion drafts rather than one omnibus bill is a deliberate tactical choice, according to multiple congressional staffers and tax policy analysts. Breaking the issues apart makes it easier to build coalitions around individual provisions and allows the committee to discard politically toxic sections without killing the entire effort.
The seven drafts cover:
Smith cited a specific pain point in his opening remarks: "Each $5 cup of coffee bought with a digital asset generates two new pieces of tax paperwork." With 31% of crypto owners expressing interest in using tokens for everyday purchases, according to Smith, the compliance burden is a material barrier to adoption as a payment method.
The bipartisan Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act (H.R. 8899), introduced on May 19, 2026, by Reps. Max Miller (R-OH) and Steven Horsford (D-NV) with co-sponsors Suzan DelBene (D-WA) and Mike Carey (R-OH), serves as the primary cross-aisle legislative vehicle.
The PARITY Act bundles several of the individual draft provisions into one package and adds a "deemed-basis rule" for regulated payment stablecoins. Under proposed Section 139J, gains under $200 from the sale or exchange of dollar-pegged, regulated stablecoins would not count as taxable income — a direct analog to existing cash-transaction treatment.
According to Rep. Horsford, speaking at Consensus Miami on May 5, 2026, the bill is intended to establish a "durable floor" for crypto taxation rather than a comprehensive ceiling. The bill's dual-authorship structure — Republican Miller and Democrat Horsford — is designed to signal viability in a divided committee.
However, Horsford subsequently vowed to oppose all Republican-drafted crypto tax bills unless changes are made to the validation-reward and charitable-donation provisions, complicating the bipartisan narrative.
The most contested provision allows validators and miners to elect deferral of income tax on newly created tokens until disposition. Under current law, staking and mining rewards are taxed as ordinary income at fair market value upon receipt, then again as capital gains or losses upon sale — creating a double-taxation problem that the industry calls "phantom income."
The proposed fix: taxpayers could defer tax on rewards for up to five years, after which unrealized gains would be taxed as ordinary income at then-current fair market value.
Mike Kaercher, Deputy Director of NYU Law's Tax Law Center, warned at the hearing that the deferral mechanism could enable permanent tax avoidance and constitutes "a new tax subsidy" that violates parity with traditional financial instruments. Committee Democrats raised concerns about whether taxpayers could "permanently escape tax" through strategic timing of dispositions.
Under current law, IRC § 1091 wash-sale restrictions do not apply to digital assets. Crypto traders can sell at a loss and immediately repurchase the same token to bank the deduction — a strategy unavailable to stock and bond investors. Both the individual committee drafts and the PARITY Act would extend the 30-day wash-sale window to digital assets and add constructive-sale rules.
The American Bankers Association submitted testimony criticizing the overall package for giving cryptocurrencies "a significant advantage" over other asset classes in other respects, even as the wash-sale extension would close one gap.
The stablecoin provisions would exempt regulated, dollar-pegged payment stablecoins from capital-gains reporting when the gain or loss on a transaction is under 1% of value. This aligns with the economic reality that most stablecoin transactions are functionally cash transfers, not speculative trades. The IRS would be directed to review the implications of a broader de minimis exemption under the PARITY Act framework.
The June 9 hearing revealed a committee divided not on the principle of crypto tax modernization, but on the speed, scope, and revenue implications.
Republican position: Chairman Smith framed the issue as competitiveness. "Our tax system should not be picking the winners and losers," he stated, adding that digital asset taxation "does not have to turn into a partisan fight." Smith cited the statistic that nearly a quarter of crypto holders earn less than $75,000, positioning the bills as middle-class tax relief.
Democratic position: Ranking Member Neal's "healthy skepticism" reflected two concerns. First, Democrats worry that favorable crypto tax treatments could widen the tax gap relative to traditional finance, where broker reporting and withholding infrastructure is mature. Second, the Form 1099-DA reporting regime — which only began requiring gross-proceeds reporting in 2025 and will not require cost-basis reporting until 2027 — is still being implemented. Democrats view the deferral provisions as premature given that baseline enforcement tools are not yet operational.
Rep. Horsford occupies an unusual position. He is the top Democratic recipient of crypto industry campaign contributions on the committee, receiving close to $2 million since 2023, according to a Revolving Door Project analysis released ahead of the hearing. He co-authored the PARITY Act but then publicly threatened to oppose the Republican versions of the same provisions — a posture that multiple observers interpreted as a negotiating tactic to extract concessions on staking and charitable-donation rules.
The Revolving Door Project report released before the hearing documented the crypto industry's campaign spending on Ways and Means Committee members across the 2024 and 2026 election cycles. The analysis showed that industry contributions flowed to both sides of the aisle, with the heaviest concentration on members most involved in drafting the bills.
Broader spending data shows the crypto sector's political investment has escalated. Fairshake and affiliated PACs had amassed over $193 million for the 2026 midterms, according to public filings, with Coinbase, Ripple, and Andreessen Horowitz among the largest contributors. Total industry political spending in the 2026 cycle exceeded $320 million across direct contributions, PAC spending, and lobbying.
Witnesses at the hearing included Lawrence Zlatkin, Coinbase VP of Tax, and Kevin Wysocki, Anchorage Digital's Head of Policy — representing two of the industry's most politically active firms. Coin Center's Jason Somensatto provided non-industry testimony, noting in his written submission that "millions of everyday Americans have faced the task of determining how to report and pay taxes on cryptocurrency transactions" under a code that predates digital assets.
The June 9 session was a discussion hearing — no markup, no vote. Written submissions close June 23, 2026. The bills face several procedural hurdles before they could become law:
The practical window for major crypto tax legislation is narrow. Bloomberg Tax reported that a senior Democratic tax writer expressed skepticism about pre-midterm action, suggesting the committee may not achieve bipartisan consensus before the session's end.
The June 9 hearing opened a new front in U.S. crypto regulation — taxation — alongside the market-structure fight embodied by the CLARITY Act. The seven bills address legitimate compliance pain points: phantom income on staking, punitive paperwork on small transactions, and regulatory asymmetry between stablecoins and cash. The $28 billion estimated revenue impact and 67 million affected holders make the stakes material.
The outcome depends on whether the committee can resolve the deferral controversy before the session clock runs out. Chairman Smith's strategy of separate bills rather than one package gives him flexibility to drop toxic provisions, but Democratic concerns about enforcement gaps — particularly while the 1099-DA regime is still being implemented — represent a structural objection that individual concessions may not resolve. The hearing produced no votes, no markup date, and no timeline for floor action. What it produced was a map of the political terrain that crypto tax reform must cross before December.