Crypto Lobbyists Urge U.S. Congress to Maintain Tax Bill

On June 21, the Blockchain Association, Crypto Council for Innovation, and The Digital Chamber sent a letter to the U.S. House Committee on Ways and Means urging the passage of the Tax Clarity for Mining and Staking Act (H.R. 9175) for miners and stakers.

— Crypto Council for Innovation (@crypto_council) June 22, 2026

The organizations supported Congressman Mike Carey’s bill and opposed an amendment by Steven Horsford that limits the tax deferral on mining and staking rewards to five years. They argue that this amendment undermines the compromise established in the bill.

What the Bill Proposes

The H.R. 9175 bill was introduced on June 8. It is currently in the House Committee on Ways and Means and has not yet progressed further. The bill addresses new digital assets that taxpayers receive for participating in transaction validation, including rewards for mining, staking, and similar activities that support blockchain operations.

According to the Joint Committee on Taxation's description, H.R. 9175 confirms that receiving new digital assets is considered ordinary income. Taxpayers will have the option to elect a special regime to account for these assets similarly to self-created property.

Why the Industry Talks About "Phantom Income"

A key argument from lobbyists is the risk of taxing income before market participants can monetize the asset. In a letter, the organizations reminded that the IRS has taken the position that miners must include the fair market value of mined Bitcoin in gross income on the date of receipt. The agency later indicated that staking rewards are also taxable income upon receipt.

The letter's authors believe this approach creates liquidity issues and can lead to the taxation of "phantom income." For instance, a network participant receives tokens but does not sell them. If the asset's price subsequently drops, taxes may be calculated based on a higher value at the time of receipt, even though the taxpayer has not realized any cash revenue.

The Dispute Over Horsford's Amendment

Steven Horsford proposed limiting the deferral to five years. If a taxpayer elects the special regime and does not sell the asset by the end of the fourth tax year following the year of receipt, they must recognize a gain or loss as if the asset were sold at fair market value on the last business day of that fourth year.

This represents a fundamental change in the logic of the bill for the industry. Ji Hun Kim, CEO of the Crypto Council for Innovation, stated that the amendment would "break" H.R. 9175, turning it into a five-year forced sale clock for staking and mining rewards.

For years, CCI has argued for proper taxation of staking rewards. Rep. Horsford’s amendment would unfortunately break H.R. 9175, replacing it with a 5-year forced-sale clock on staking and mining rewards that JCT says raises negligible revenue. We greatly appreciate his… https://t.co/Lmt4OfxfxI

— Ji Kim (@_jikim) June 22, 2026

In their letter, the three organizations also noted that the five-year limit would force taxpayers to track cost basis and calculate gains on a mandatory cycle, even if no sales occurred. They estimate this would create an additional burden for market participants, consultants, and the IRS.

The Joint Committee on Taxation estimated the budget effect of the amendment to H.R. 9175 at $101 million for the years 2026–2036. Lobbyists called this effect negligible compared to the administrative burden and stated that the original version of the bill is already a compromise.

Banks Oppose the Bill

The banking lobby criticized the bill. The American Bankers Association (ABA) stated that H.R. 9175 would give crypto yields an advantage over other savings and investment methods.

The ABA believes this approach could encourage a shift of funds from bank deposits to crypto products with tax advantages. The association estimates this could impact small business lending and local communities, as deposits remain a crucial funding source for banks.

The association also compared the proposed regime to the taxation of dividends, interest on bank deposits, and other capital income, which are typically taxed in the current year. The ABA labeled the deferral for crypto rewards as "blatant favoritism" towards digital assets.

Previously, the IRS introduced new disclosure requirements for crypto transactions via Form 1099-DA. According to a survey by Awaken Tax among 1,000 crypto investors, most expressed concern over the radical shift from self-reporting to automatic reporting of transactions.

In June, the Blockchain Association sent an open letter to U.S. Senate leaders John Thune and Chuck Schumer urging them to expedite the passage of the CLARITY Act.