Lawmakers Clash Over Crypto Tax Relief as Reform Effort Advances

The Joint Committee on Taxation estimated the bill would reduce federal revenue by $12 billion over a decade. Deficit hawks in both parties have flagged the figure. Supporters argue the simplification would boost compliance and eventually increase tax collections. The Congressional Budget Office has not yet scored the latest version, which includes amendments aimed at narrowing the revenue loss.

For crypto traders, the bill's fate matters beyond compliance costs. The proposed DeFi exemption would affect how yield farmers and liquidity providers report gains. A change in staking tax treatment could shift the economics of proof-of-stake networks like Ethereum. The bill also includes language on airdrops, which the IRS has not clearly defined as income or property.

The bill is expected to reach the House floor in the coming weeks. A similar measure in the Senate has stalled over disagreements on the scope of broker reporting requirements. Lawmakers said the final shape of the legislation could depend on whether the Treasury Department issues its own rules first. No date has been set for a floor vote.