House Ways and Means hearing pushes for modernized tax rules for digital assets

WASHINGTON — Lawmakers on the House Ways and Means Committee heard bipartisan testimony Thursday urging Congress to overhaul tax rules for cryptocurrencies and other digital assets to reduce compliance burdens, protect retail users and keep industry jobs in the United States.

Witnesses representing industry groups, financial firms and consumer advocates told the committee that current tax treatment is unclear and administratively onerous. "Right now, every digital asset transaction, no matter how small, is a taxable event," Summer Mersinger, chief executive officer of the Blockchain Association, told the panel. She warned that reporting requirements could overwhelm taxpayers and the Internal Revenue Service.

The panel heard repeated proposals aimed at three problem areas: a de minimis exclusion for small personal transactions; clearer guidance on when rewards from staking or mining count as income; and changes to reporting rules that officials say could produce billions of additional information returns.

Why it matters: More than 50 million Americans hold some form of cryptocurrency, witnesses and members said, and companies tied to digital assets have generated jobs and investment. Without clearer tax rules, supporters argued, activity could move offshore and small investors could face onerous paperwork or…