A bipartisan group of US lawmakers has urged tax authorities to revise crypto staking rules that they say result in unfair double taxation.
The effort is led by Republican Representative Mike Carey and includes 18 members of the US House of Representatives.
Lawmakers sent a formal letter to Internal Revenue Service acting commissioner Scott Bessent requesting updated guidance before 2026.
The letter argues that current IRS treatment places an unnecessary administrative burden on crypto stakers.
Under existing rules, staking rewards may be taxed when received and again when sold.
Lawmakers said this approach risks taxing unrealised gains that may never materialise.
Carey said the aim is to align taxation with actual economic outcomes for taxpayers.
This letter is simply requesting fair tax treatment for digital assets and ending the double taxation of staking rewards is a big step in the right direction.
Mike Carey said.
The lawmakers proposed that staking rewards should only be taxed at the point of sale.
They argued this would ensure taxes are applied based on realised gains rather than paper income.
The letter said current rules discourage participation in staking despite its importance to blockchain networks.
Lawmakers warned that reduced staking participation could weaken network security.
They also linked staking participation to broader US competitiveness in digital asset innovation.
Millions of Americans own tokens on these networks. Network security — and American leadership — requires those taxpayers to stake those tokens, but today the administrative burden and prospect of over taxation discourages that participation.
The lawmakers wrote.
The group asked whether any administrative barriers exist to updating guidance before the end of the year.
They said reform would support the administration’s goal of strengthening US leadership in crypto innovation.
The push is not the only effort underway to change crypto tax treatment.
Representatives Max Miller and Steven Horsford recently introduced a separate discussion draft addressing crypto taxation.
Their proposal would exempt small stablecoin transactions from capital gains taxes.
It would also allow taxpayers to defer income recognition on staking and mining rewards.
Under the draft, taxpayers could elect to defer taxes on those rewards for up to five years.
Lawmakers said this approach would reduce complexity while maintaining tax compliance.
Industry observers say multiple proposals show growing political attention on crypto tax clarity.
Supporters argue clearer rules could boost participation without undermining tax revenue.