Tax Clarity for Mining and Staking Act: Lobby Rejects 5-Year Cap

Three crypto trade groups have asked Congress to pass the Tax Clarity for Mining and Staking Act without changes – specifically without a proposed five-year cap on reward-tax deferral.

The Blockchain Association, the Crypto Council for Innovation, and The Digital Chamber sent a joint letter June 21 to House Ways and Means Committee leaders Jason Smith and Richard Neal. The groups said the bill should pass “as introduced” because it would give miners and stakers clearer tax rules. They wrote that “after years of uncertainty” the proposal offers a compromise for builders and lawmakers.

The dispute centers on when mining and staking rewards should be taxed. Under current IRS guidance, miners and stakers may owe tax when they receive rewards, based on the market value at that time. The crypto lobby calls this “phantom income” because users may owe tax before they sell the asset.

H.R. 9175 would let taxpayers choose when to recognize rewards for tax purposes. They could pay tax when they receive the crypto or defer it until they sell or dispose of it. The groups said this approach keeps income taxable while reducing pressure to sell tokens to cover tax.

The letter also noted that proof-of-work and proof-of-stake networks secure more than $1.7 trillion in value. The groups argued that clearer rules would help ensure these networks “can be secured by Americans in America.”

The bill has not moved beyond the House Ways and Means Committee. It was introduced before a June legislative hearing as part of a wider crypto tax package. That package also includes the PARITY Act, which would direct the IRS to review small crypto transactions.

Rep. Steven Horsford filed an amendment that would limit reward tax deferral to five years. Crypto Council for Innovation CEO Ji Hun Kim opposed the change in a post on X, saying it would “break” the bill and raise “negligible revenue.”

The joint letter made a similar argument. It said a five-year limit would add recordkeeping costs and force taxpayers to track time-based recognition events across wallets and accounts. The groups said the amendment would bring back the problems the bill seeks to fix.

The American Bankers Association has opposed the measure. The banking group said the bill would treat crypto rewards differently from dividends, bank interest, and other returns that taxpayers report each year. It said the proposal would show “clear favoritism” for crypto over other asset classes.

The ABA argued that delayed taxation could help crypto rewards compound in ways common savings products cannot. It said the bill could reshape how Americans compare yield from crypto, bank accounts, and traditional investments.

The broader House crypto tax package drew scrutiny at a June 9 hearing. Mike Kaercher of the NYU Tax Law Center warned that reward deferral could act as a tax subsidy and raise abuse concerns. Coinbase tax executive Lawrence Zlatkin said current rules create confusion, hard compliance work, and pressure on the IRS.

The debate now sits with Congress. Crypto groups want the bill passed unchanged to settle reward tax timing. Banking groups and tax critics want lawmakers to avoid giving digital assets special treatment in the tax code.

The bill has no scheduled markup or floor vote.