Senators Dreadfully Vexed: Cry “Foul!” Over Crypto Tax Kerfuffle 🤦‍♂️💸

by

The admirable US Senators Cynthia Lummis and Bernie Moreno—those paragons of fiscal creativity—have thrust themselves onto the crypto stage, waving a legislative banner with all the gusto of an Oxford rowing team after victory at Henley. Their new proposal attempts to alleviate the kind of tax-induced migraines that make even steely-eyed CFOs weep gently into their spreadsheets. Americans love their regulations, but apparently not when it results in the government pinching imaginary money from their digital piggybanks.

Cynthia Lummis, Bernie Moreno and the Crypto Tax Headache

don’t tax companies on the “gains” they haven’t actually seen, barring an alternate reality where your unfed Tamagotchi is somehow worth its weight in gold.

Punishing firms for not cashing out during a crypto high is, in their view, like fining a chap for admiring the pie without ever having a bite. The Financial Accounting Standards Board (FASB), meanwhile, continues to insist companies update their ledgers each time the Bitcoin price sneezes. Talk about the taxman’s version of musical chairs!

Our valiant lawmakers fear this risk of taxation-by-accounting-phantasm would send blockchain whiz kids fleeing to international waters—or, given the security of DeFi, possibly low-Earth orbit.

FASB’s Daring Adventure and the Taxman’s Sneaky Backdoor

FASB, never a group to shy from a hearty number crunch, called for “transparency” in late 2023 (transparency, in this case, apparently meaning “let’s see just how many imaginary chickens these companies own”). Now, outfits must value crypto like Bitcoin and Ethereum at the end of each quarter, announcing wins and losses on their ledgers with masochistic consistency.

Lummis and Moreno, not being great fans of taxing daydreams, are rallying the troops at Treasury to ignore those ghostly fortunes when calculating CAMT. If the Department is feeling munificent, they’ll tinker with AFSI and let digital dreams stay safely untaxed—until someone, somewhere, actually sells something.

Crypto’s Sopranos: Industry Worries and the Case of the Vanishing Accountants

Our dynamic duo warns that if the government persists with this creative taxation, American companies might be tempted to liquidate faster than a Brit at last call. Even worse, firms may abscond to lands where nobody’s even heard of “CAMT”—or, if they have, are politely ignoring it.

Not content with mere threats, the IRS attempted to calm nerves by offering the insurance sector a temporary tax vacation in 2023 (Notice 2023-20, for fans of bureaucratic romance novels). Meanwhile, the leaders of the Digital Asset Initiative decided this was the ideal moment to disappear before the 1099-DA rules came crashing down—leaving a trail of speculation thicker than a BlockFi fine-print disclosure.

In short, senators urge the Treasury to stop faffing about and provide clear instructions—ideally in time for accountants to remember what relaxation feels like.

“If you wish to support innovation, don’t tax the daydreams—just the tangible loot,” the proposal more or less says, though in language that flies just above the head of the average pub-goer.

Missouri Tosses Its Hat: Crypto Gains to Escape State Tax

Missouri, always the plucky outlier, has thrown its legislative lasso around capital gains tax entirely, House Bill 594 promising to let Missourians cash in their crypto without so much as a raised eyebrow from the tax collector. Pending the governor’s nod, Missouri may soon outdo even the most generous Swiss canton.

On the federal side, waffling reigns supreme—prediction markets give a Trump-led capital gains-tax abolition in 2025 about as much chance as your uncle mastering TikTok. (Kalshi pegs it at a stately 12%.) Over at Polymarket, crypto fans are only slightly less glum, but hope springs eternal and all that.

Rumors swirl that Donald Trump may one day abolish income taxes, replacing them with tariffs to be paid in, one assumes, commemorative steak knives or rare Pokémon cards. Until such flights of fancy become law, American crypto fans must continue their favorite pastime: arguing with the IRS and watching their unrealized gains vanish at the speed of Twitter drama.

Read More

2025-05-14 06:19