What is the PARITY Act for crypto taxes?

The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, or PARITY Act, is a proposed US bill that would direct the Internal Revenue Service and Treasury Department to study tax exemptions for small crypto transactions. The bill focuses on reducing reporting burdens tied to low-value digital asset payments. It does not yet create a direct tax exemption.

What is a de minimis crypto tax exemption?

A de minimis exemption would allow small crypto transactions to avoid capital gains tax reporting requirements. The idea is that minor purchases, such as buying coffee with crypto, should not trigger complex tax calculations. Lawmakers are studying whether exemptions for transactions under certain thresholds, such as $200, are practical.

Why are US lawmakers reviewing crypto tax rules now?

Many lawmakers and crypto firms argue the current US tax system is outdated for digital assets. Every crypto transaction can potentially create a taxable event, even for very small purchases. Supporters of reform say the rules discourage crypto adoption for everyday payments.

What did Representative Max Miller say about the bill?

Max Miller said the US tax code has failed to keep pace with digital asset innovation and modern financial technology. He argued lawmakers need clearer and more practical crypto tax policies. Miller also said he believes the legislation could pass before the next congressional cycle ends.

Does the PARITY Act immediately remove taxes on small crypto payments?

No, the bill does not directly create a tax exemption at this stage. Instead, it orders the Treasury Department to study possible relief options and issue interim guidance within 180 days. Any permanent exemption would likely require additional legislation or formal regulatory action.

Why are crypto exchanges supporting tax exemptions?

Kraken and other crypto firms say current reporting rules create unnecessary compliance burdens for tiny transactions. Kraken recently said millions of IRS tax forms involved transactions worth less than $50. The industry argues the rules make crypto impractical for everyday payments.

How could the bill affect stablecoins?

The proposal keeps provisions that would treat some regulated payment stablecoins more like traditional cash for tax purposes. That could reduce taxable gain calculations in certain low-volatility transactions. Stablecoin issuers and payment companies are closely watching this part of the legislation.

What are wash sale rules and why do they matter for crypto?

Wash sale rules prevent investors from selling an asset at a loss and quickly rebuying it purely for tax benefits. Traditional stocks already face these restrictions, but crypto currently operates in a grey area. The PARITY Act aims to apply wash sale rules to digital assets as well.

Image for illustrative purposes only. Not a real photo.

US lawmakers push IRS review of crypto tax exemptions

Written by Mahathir BayenaPublished May. 21 2026Last Updated May. 21 2026

A bipartisan group of US lawmakers introduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, or PARITY Act, directing the Internal Revenue Service to study potential tax exemptions for small cryptocurrency transactions.

The bill would require the United States Department of the Treasury to provide interim guidance within 180 days outlining what crypto tax relief could be offered under existing regulatory authority.

“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,”

Said Max Miller.

The proposal does not directly create a de minimis tax exemption for small crypto payments but instead calls for studies examining compliance burdens and the number of transactions under $200 currently reported to the IRS.

The bill also retains provisions treating regulated payment stablecoins similarly to cash for tax purposes in certain circumstances while seeking to apply wash sale rules and safe-harbour protections for broker-facilitated crypto trading.

Following the announcement there was no immediate market impact because the legislation remains in the proposal stage and has not yet advanced through Congress.

Crypto firms including Kraken have argued existing tax reporting requirements create excessive administrative burdens for low-value crypto payments after the exchange said millions of IRS tax forms related to transactions worth less than $50.

The legislation was introduced by Representatives Max Miller, Steven Horsford, Suzan DelBene and Mike Carey as Congress continues broader efforts to establish clearer regulatory frameworks for the US digital asset industry.