The efforts show growing momentum in Congress to align crypto taxes with how the technology actually works
US lawmakers are pressing federal tax officials to rethink how cryptocurrency staking rewards are taxed, warning that current
rules could unfairly hit investors twice. A bipartisan group in the House is asking the Internal Revenue Service to revisit its
guidance before new tax filings begin in 2026.
In a letter sent to IRS acting commissioner Scott Bessent, 18 representatives urged the agency to update what they called overly harsh and outdated rules. The effort is being led by Rep. Mike Carey, who said the goal is simple: stop taxing staking rewards before people actually sell them.
Under existing guidance, crypto holders who stake tokens may owe income tax when rewards are received, then face capital gains taxes again if those tokens are later sold. Lawmakers argue that approach does not reflect real gains and creates unnecessary complexity for everyday users.
The group wants staking rewards taxed only at the point of sale. They say this would better match how economic value is realized and remove a major barrier for people supporting blockchain networks through staking.
The letter also frames the issue as one of competitiveness. Lawmakers warned that discouraging staking could weaken network security and push innovation overseas, at a time when millions of Americans hold assets on proof-of-stake blockchains.
This is not the only push to modernize crypto tax rules. Over the weekend, Reps. Max Miller and Steven Horsford released a discussion draft aimed at easing tax pressure on crypto users more broadly.
Their proposal includes an exemption for small stablecoin transactions and a new option allowing taxpayers to delay reporting income from staking or mining rewards for up to five years. That approach would still tax rewards, but later, when users are better positioned to pay.
