IRS Girdles For Crypto; Tiny Trades Turns into Big Tax Drama

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Last year Kraken mailed the IRS a shocking 56 million tax forms. A third of those were for transactions worth less than a single coin of a dollar. The rest? Most were under $50. In other words, the government is now chasing pennies like it’s a treasure hunt.

A Study, Not An Exemption

A bipartisan gaggle of House MPs rolled out a bill that’s less about handing out tax breaks and more about asking the Treasury: “Do we need an exemption for tiny crypto trades?” The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act-PARITY for short-doesn’t gleefully legislate any relief. It just obliges the Treasury to investigate the idea and report back in 180 days.

Innovation should create opportunity for everyone, not just those already ahead.

The Digital Asset PARITY Act modernises the tax code for the digital age, creates clearer rules, and ensures emerging financial tools help expand financial inclusion and pathways to wealth.

It is…

– Rep. Steven Horsford (@RepHorsford) May 19, 2026

Crypto paperwork chaos

The bill also spells out a task force to count how many bits of paperwork small crypto trades actually explode into every year. And, because the IRS can never be certain, it will outline what it would cost them to give a “de minimis” exemption, and what shady players would try to do with that loophole.

Republican Representative Max Miller, one of the bill’s sponsors, mused that the U.S. tax code has been stuck in the stone age while digital assets have been jet‑piloting through the 21st century.

“As America continues to lead the world in innovation, our tax code has failed to keep pace with the rapid growth of digital assets and modern financial technology,” Miller said in a statement.

Tax code reinterpretation

What Else The Bill Covers

The PARITY Act carries over a quirky clause that would treat regulated payment stablecoins as cash for tax purposes. Under that provision, nobody gets a gain or loss on stablecoin deals unless the token’s cost basis dips below 99% of its redemption value.

The bill also aims to patch a loophole by applying wash‑sale rules to crypto, a trick stock investors are barred from but crypto traders enjoy. Democratic Representatives Steven Horsford and Suzan DelBene joined Miller and Republican Rep. Mike Carey to introduce the legislation.

Miller proudly told Bloomberg Tax that the bill could pass before Congress blows out its lights in January, after the November midterm elections where every House seat will be contested. If they’re lucky, we’ll get a slightly less tedious tax form next year.

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2026-05-21 12:58