As staking moves from a niche pursuit to a mainstream way for investors to earn yield, lawmakers in Washington are increasingly focused on long-standing gaps in U.S. tax policy that could shape the future of proof‑of‑stake networks — and millions of users who secure them. What’s happening - Eighteen bipartisan House members, led by Representative Mike Carey, have formally pressed the IRS to revisit its guidance on crypto staking ahead of the 2026 tax year. Their letter argues the current approach creates double taxation, burdens investors with complex reporting, and doesn’t reflect real economic gains — problems that are amplified during volatile markets. - Lawmakers specifically asked whether administrative obstacles stand in the way of updating IRS guidance before year‑end and suggested taxing staking rewards at the point of sale as a cleaner way to capture actual gains while reducing compliance headaches. - They also warned that unclear rules could discourage staking participation — a concern given staking’s role in validating transactions and maintaining the security and resilience of proof‑of‑stake (PoS) blockchains. Why the timing matters Several temporary tax provisions are set to expire in 2026, and members of Congress say they want clear policy on staking before broader tax negotiations take center stage. They also cautioned that prolonged uncertainty could invite court rulings that cement interpretations through precedent rather than deliberate policy-making. Parallel legislative effort: Digital Asset PARITY Act Alongside the IRS letter, Representatives Steven Horsford and Max Miller released a discussion draft called the Digital Asset PARITY Act that takes a broader stab at modernizing crypto tax rules: - A de minimis exemption for regulated stablecoin payments used in everyday transactions, so small gains or losses from such payments wouldn’t generally be taxed — similar to how low‑value foreign currency exchanges are treated. - For staking and mining, the draft doesn’t eliminate immediate taxation but would let taxpayers defer income recognition for up to five years, offering temporary relief while longer‑term solutions are debated. - The bill would also extend wash‑sale rules and certain securities tax provisions to actively traded digital assets, aiming to limit abuse without creating new loopholes. What this signals Together, the IRS letter and the PARITY draft indicate growing consensus on Capitol Hill that crypto taxation needs careful, technical updates rather than ad hoc fixes. A key focus is resolving the “double taxation” problem that critics say penalizes network participants and complicates reporting. What to watch next - Will the IRS move to update staking guidance before 2026? - Will the PARITY Act or portions of it gain traction in committee or as part of larger tax negotiations? - Could lingering ambiguity invite court decisions that lock in costly precedents? For stakers, validators and retail investors, the coming year could determine whether staking remains mired in tax uncertainty — or shifts toward a clearer, more predictable framework that better matches how these networks operate. Cover image: ChatGPT; ETHUSD chart: TradingView. Read more AI-generated news on: undefined/news

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