As Congress weighs separate digital-asset tax bills, the Blockchain Association is urging lawmakers to tax mining and staking rewards when holders dispose of them, instead of when they gain control.
In an Oct. 22 letter to congressional leaders, the association proposed treating the rewards as property created by the holder and sourcing income to the taxpayer’s residence. Chief Policy Officer Lindsay Fraser signed the letter for the association. The group says its tax principles were developed with input from more than 100 members. Fraser said, “Americans who use digital assets aren't asking for special treatment.”
The association also wants stablecoins treated like cash for tax purposes, including relief from Form 1099-DA reporting, and a “meaningful” exemption for small transactions without specifying an amount. It proposes no tax on transfers between a person’s own wallets, smart-contract interactions or cross-chain movements when economic ownership and exposure do not change. The group also wants broker reporting limited to intermediaries that hold or control customer assets.
The association argues that current rules create uncertainty and compliance costs, and could push innovation offshore. It says its proposals would reduce taxpayer burdens and help the Internal Revenue Service (IRS) focus on economically significant activity.
Current IRS guidance counts staking rewards as gross income when a taxpayer gains control of them, using their value at that time. Form 1099-DA gross-proceeds reporting applies to certain broker transactions on or after Jan. 1, 2025. The IRS says its final rules cover brokers that take possession of assets being sold and exclude noncustodial brokers that do not.
The House Ways and Means Committee voted 38-5 on Sept. 16 to advance H.R. 10357, the Digital Asset Tax Certainty Act. Its substitute includes an exception for certain network and transaction fees of $10 or less and addresses the source and ordinary-income treatment of validation income. It does not include the association’s proposed rule for taxing rewards upon disposal.
In the Senate, S. 5616, the ADAPT Act, was introduced Sept. 30 and referred to the Senate Finance Committee.
