TL;DR
- US Congress aims to pass a new digital asset tax bill by August 2026.
- Debate centers on treating crypto as property versus currency for small payments.
- The IRS is increasing enforcement ahead of new 1099-DA reporting requirements.
The U.S. crypto tax debate enters a new phase as Rep. Max Miller, a member of the House Ways and Means Committee, confirms that he aims to advance a revised tax bill before the August 2026 recess. The effort seeks to correct nearly ten years of uncertainty that began in 2014, when the IRS classified digital assets as property and turned every sale, swap, or payment into a taxable event.
Miller said the draft already circulates among several committee members and added that he expects a Democratic co-sponsor soon. His remarks indicate that Congress now prepares to revisit rules that have remained unchanged while crypto adoption expanded across retail and institutional channels.
He explained that the 43-day government shutdown earlier in the fall removed nearly two months of legislative time, eliminating any chance of advancing the proposal before year-end. Even so, both the Ways and Means Committee and the Senate Finance Committee, which held hearings in July and October, intend to use the first half of 2026 to define the final framework.
From the Senate, Steve Daines echoed Miller’s remarks and projected that a full draft could arrive in August. He warned that prolonged uncertainty slows U.S. competitiveness, as digital-asset firms hesitate to expand without stable statutory guidance.
Push for small-transaction relief gains momentum
Lawmakers continue to debate whether crypto should remain fully classified as property or whether low-value payments could receive a separate category similar to currency. For years, industry groups have urged a de minimis exemption that allows users to make minor purchases without calculating capital gains.
Earlier in the year, Sen. Cynthia Lummis introduced a proposal that sets an exemption at $300, with a $5,000 annual cap. The discussion now includes additional technical questions, such as reporting obligations for exchanges, data sharing between foreign platforms and the IRS, and the treatment of staking rewards.
Under current IRS guidance, staking rewards count as ordinary income when received. Industry voices press for a shift to taxation at disposition instead of receipt. The negotiations also examine stablecoin payments, business receipts above $10,000, and new cross-border reporting rules under the Crypto-Asset Reporting Framework (CARF).
IRS expands enforcement as new rules approach
Between May and June, tax attorneys and crypto accounting firms reported a sharp increase in warning letters issued by the IRS to U.S. investors. The activity resembles prior enforcement waves in 2020 and 2021, when federal authorities obtained transaction data from major exchanges.
Beginning January 1, 2026, centralized intermediaries must issue 1099-DA forms for the first time, giving federal authorities clearer insight into trading activity. The mandate aligns with broader policy efforts underway in Congress, which also reviews a separate market-structure bill. That proposal has slowed in recent weeks, with Sen. Bernie Moreno stating that he will not support a weak compromise.
