Crypto groups back bill allowing miners and stakers to defer taxes until sale

Three of the largest U.S. crypto advocacy organizations have urged Congress to pass legislation that would allow digital asset miners and stakers to defer taxation on newly created tokens until those assets are sold.

In a joint letter sent to the House Ways and Means Committee, the Blockchain Association, Crypto Council for Innovation and The Digital Chamber voiced support for H.R. 9175, the Tax Clarity for Mining and Staking Act, and called on lawmakers to approve the bill as introduced.

The groups described the proposal as a “balanced compromise” that would address years of uncertainty surrounding the taxation of mining and staking rewards while preserving eventual income recognition.

Bill creates optional tax-deferral framework

Representative Mike Carey introduced the legislation. It would establish a new framework for taxing newly minted digital assets received through mining and staking activities.

Under current IRS guidance, miners and stakers generally recognize taxable income when rewards are received. The proposed bill would preserve that treatment as the default option. 

However, it would also allow taxpayers an alternative approach that defers income recognition until the assets are disposed of.

If a taxpayer makes that election, newly minted digital assets would not be included in gross income when received. Instead, gains would be recognized when the assets are sold or otherwise disposed of.

Supporters argue that the approach addresses concerns that taxpayers can face tax liabilities before they have converted rewards into cash.

Industry pushes back on current IRS treatment

The crypto groups pointed to existing IRS guidance as a source of uncertainty for network validators.

The letter references IRS Notice 2014-21, which treats mined Bitcoin as taxable income upon receipt. Also, Revenue Ruling 2023-14 states that staking rewards are immediately taxable when received.

According to the organizations, taxing rewards at the time they are created can create liquidity pressures, force asset sales to meet tax obligations, and result in what they describe as “phantom income” concerns.

The groups also argued that the bill would reduce compliance burdens for taxpayers and the IRS by creating a clearer framework for reporting and enforcement.

Proposal could affect future staking investment products

Beyond individual taxpayers, the bill includes provisions related to investment trusts engaged in digital asset staking.

The legislation states that a trust would not lose its tax status solely because it stakes digital assets held on behalf of investors, provided it is not actively engaged in the business of validating transactions.

The provision could become increasingly relevant as asset managers explore staking-enabled investment products and seek clearer tax treatment for digital asset funds.

Final Summary

• Three major U.S. crypto advocacy groups have urged Congress to pass a bill allowing miners and stakers to defer taxes on newly minted digital assets until sale.
• The legislation would create an optional tax framework while also clarifying the treatment of staking-related investment trusts.