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In a significant move to modernize the U.S. tax treatment of cryptocurrencies, Rep. Max Miller (R-OH) announced Wednesday that he will soon introduce draft legislation establishing a comprehensive federal tax framework for digital assets. The announcement came during a House Ways and Means Subcommittee on Oversight hearing focused on the taxation of crypto-related activities.
Miller, a freshman lawmaker and member of the tax-writing committee, stated that his proposal will address a range of longstanding ambiguities in the tax code affecting crypto users, developers, and investors.
“We need a tax code that keeps up with innovation, not one that chases it overseas,” said Miller, emphasizing the need to “provide long overdue clarity for consumers, innovators and investors alike.”
Key Provisions Expected in the Draft Legislation
According to Miller, the forthcoming bill will include several cornerstone provisions aimed at reducing compliance burdens and creating a more innovation-friendly tax environment:
- De Minimis Exemption: Small crypto transactions used for everyday purchases would be exempt from capital gains taxation, a longstanding request from the digital asset community.
- Clarified Tax Treatment of Mining and Staking: The bill is expected to provide guidance on the income and timing rules applicable to crypto mining and staking activities, which currently exist in a gray area under IRS guidance.
- Modernization of Wash Sale Rules: A revision to the wash sale rules would prevent taxpayers from using crypto losses to offset gains in a way that could be deemed abusive, aligning the treatment of crypto assets more closely with traditional securities.
- Digital Assets in Retirement Plans and Charitable Giving: Miller signaled the legislation would also improve how digital assets can be included in tax-advantaged retirement accounts, loans, and charitable contributions.
The goal, according to Miller, is to bring regulatory certainty to a rapidly growing industry while maintaining compliance integrity and protecting tax revenue.
Legislative Outlook: Promise and Political Risk
While the announcement is seen as a positive step by crypto advocates and tax professionals seeking clarity, the path forward remains uncertain. A separate legislative package related to stablecoins and digital asset oversight was stalled this week after intra-party disputes derailed a procedural vote.
Miller’s proposal is part of broader “crypto week” activity in the House aimed at advancing regulation of digital assets, including jurisdictional clarity between the SEC and CFTC and oversight of stablecoins. However, internal disagreements over amendment procedures have complicated House Republicans’ legislative agenda.
The proposal, once introduced, is expected to draw attention from both the IRS and Treasury, which have issued limited guidance on crypto taxation to date — often leaving professionals with only piecemeal interpretations based on IRS Notice 2014-21 and subsequent FAQs.
Implications for Tax Professionals and Investors
Tax professionals are likely to welcome the move as it could:
- Simplify crypto tax reporting obligations
- Reduce audit risk due to uncertain tax positions
- Improve compliance for businesses and individual taxpayers engaged in mining, staking, and crypto payments
If enacted, the legislation could reshape how digital assets are treated across a range of tax scenarios, with significant implications for reporting, withholding, retirement planning, and charitable giving.
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