House Hearing Exposes Split on Speed of Crypto Tax Rules

A package of cryptocurrency tax reform bills ran into scrutiny during a House Ways and Means Committee hearing on Tuesday, exposing a divide among lawmakers over how fast new rules should take effect. The session examined several digital asset tax provisions and left key questions unresolved as Congress considers updating the tax code for the sector.

Republicans on the committee pushed for quick passage. Delay would stifle innovation and push activity offshore, they said. Democrats countered that moving too fast risked creating loopholes that could let taxpayers underreport income or avoid taxes. Several members from both parties acknowledged the need for updates. They disagreed on the timeline and scope.

The package covers areas where the IRS has already issued temporary guidance, including broker reporting and staking rewards. Lawmakers on both sides said permanent legislation is needed. The specific language on each provision remains under negotiation. One point of disagreement is the definition of a broker. Treasury has proposed a broad definition that would include decentralized exchange software providers, drawing pushback from industry groups.