Crypto Wants to Rewrite IRS Tax Rules: Will They Actually Get Their Way?

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The Blockchain Association is feeling rebellious – like, “Hey IRS, let’s have a chat about how you tax digital assets!” Apparently, they think the current tax rules are more suited to antique coins and traditional property than the high-tech, flashy world of blockchain. Not quite sure who’s been living in the past here, but someone needs a wake-up call.

In a “we-can-do-better” moment, these trade groups have published a paper suggesting the IRS should rethink its approach. Why? Well, the IRS is tightening the screws, making crypto exchanges sweat under the spotlight with more rules and reporting. But sure, let’s totally keep doing things the same way, because that always works out, right?

How the IRS currently treats crypto

So, what’s the deal with crypto tax right now? According to the IRS, cryptocurrency isn’t currency – it’s property. Yes, property. Like a painting you might hang on your wall, but one that fluctuates in value every 30 seconds. This is the guidance that was stamped into existence back in 2014, and let’s just say it’s been, shall we say, a tad out-of-date since.

Here’s how the IRS makes crypto super fun to deal with:

  • If you sell, trade, or use crypto for anything, get ready to pay up because it’s taxable.
  • If you swap one crypto for another (because that’s what you do), it counts as a taxable disposal. Yes, even if it’s just a digital exchange, you’re still on the hook.
  • If you mine or stake crypto, you’re making “ordinary income,” which means the IRS expects a cut right off the bat. Lucky you!
  • Oh, and don’t forget to track every transaction, or else the IRS might have a few “friendly” questions for you.

And let’s not forget the new reporting rules! Now, exchanges and brokers are expected to spill all the juicy details to both you and the IRS. No secrets here!

What the industry wants to change

The crypto world is feeling burdened by these old-school property rules and wants to be treated like the cool, modern payment system they actually are. They’re not looking to escape taxes entirely (because that would be way too easy), but instead, they want a little tax facelift to make life simpler. Here’s their wish list:

  • Let’s delay tax payments until you cash out and turn that crypto into actual money. Imagine that – no taxes every time you blink!
  • Make staking and validation (because that’s what we do here) exempt from taxes. It’s totally not like mining, okay?
  • Simplify the mess of tracking costs for high-frequency transactions. Because honestly, who has time for that?
  • Let’s make taxes match how digital assets actually work in real life – like as a cool payment system, not a piece of art you’re just going to hoard.

The industry insists this isn’t about making life easier for tax cheats (well, that’s not the plan anyway). They just want some clarity because, you know, things are getting a little complicated out there in the world of decentralized finance.

Why this debate is gaining momentum now

Ah, timing. It’s everything. As the IRS tightens up its crypto enforcement and Congress ponders some grand digital asset laws, the US crypto industry is trying to look like the good, law-abiding citizen at the party. Problem is, the IRS doesn’t seem impressed, and without updated rules, there’s a risk of pushing all this innovation… overseas. Great job, America, way to make sure everyone moves to a tax haven!

The crypto lobby is practically waving its arms in the air, begging Congress to update the rules or risk looking like a clueless grandparent trying to send an email. But the IRS is like, “Hey, we’ve got it covered.” Sure, IRS, sure.

What would actually change – and what wouldn’t

Okay, let’s get real. Even if the industry’s proposals gain some traction, taxes on crypto aren’t going anywhere. Capital gains? Still a thing. Income reporting? Oh yeah. The IRS is not just going to let you skip out on your taxes because you “have digital money now.” Nice try, though.

The real change would be when and how taxes get triggered, not whether you pay them. Any of these shiny new proposals would still need some serious legislative action, not just a few industry-friendly suggestions. So for now, the IRS is holding strong, and crypto lovers can’t escape it just yet.

The IRS is

not

here for that change, not yet anyway.

  • Whether tax rules evolve will depend on Congress being as cool as crypto – and that’s a big if.

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    2026-02-24 20:27