U.S. Senator Todd Young of Indiana is calling on the Internal Revenue Service (IRS) to review Biden-era tax guidelines for cryptocurrency rewards.
Summary
- Sen. Todd Young urged Treasury Secretary Scott Bessent to reconsider the IRS’s 2023 tax treatment of staking rewards.
- The IRS recently proposed implementing the global CARF tax standard, aligning the U.S. with 72 other countries by 2028.
- The CARF framework, set for rollout in 2027, will require stricter reporting on capital gains from foreign cryptocurrency platforms.
Senator Todd Young is urging the IRS to reconsider its 2023 guidelines on the tax treatment of cryptocurrency rewards earned through staking, where digital assets are locked to support blockchain networks.
Currently, the IRS taxes owners on staking rewards when they are received, rather than when they are sold, which critics argue taxes unrealized gains.
Young, according to Bloomberg News, has asked Treasury Secretary Scott Bessent to review the ruling, citing concerns over taxpayer uncertainty and potential complications in revenue forecasting for legislation.
Young is a member of the Senate Finance Committee while Bessent serves as acting IRS commissioner.
The issue has sparked calls from digital asset advocates for a change in the tax approach.
IRS attempts to change crypto rules
Last week, the IRS issued a proposal to the White House that outlines the implementation of the Crypto-Asset Reporting Framework (CARF), a global tax standard designed to provide the IRS with access to data on foreign cryptocurrency accounts held by U.S. citizens.
The measure would align the U.S. tax system with 72 countries by 2028, requiring stricter reporting on capital gains from foreign platforms.
CARF, launched by the OECD in 2022, aims to facilitate international cryptocurrency information sharing to combat tax evasion.
The rollout of CARF is expected to begin in 2027, with 50 countries already prepared to adopt it, including major nations like Japan, Germany, and the U.K.