Key Takeaways
- Two lawmakers are pushing to update tax law regarding cryptocurrencies.
- There’s bipartisan interest in clarifying how the tax law interacts with digital assets.
- Critics claim the crypto industry is pushing for special treatment to get an advantage over other financial assets.
- Employers bracing for confusion over tips, overtime deductions.
- IRS issues new guidance on carbon capture safe harbor.
One of the under-the-radar tax issues on Capitol Hill may be coming to a head next year—the taxation of digital assets like cryptocurrencies.
Rep. Max Miller, R-Ohio, and Rep. Steven Horsford, D-Nev., both released statements last week outlining legislation they are co-sponsoring that would address several tax issues with digital assets. If enacted, it would be the first major bill to create tax rules specialized for the crypto area, more than a decade after they exploded onto the financial world. Many cryptocurrency dealers and advocacy groups claim the laws need to be updated to clarify grey areas for the novel properties.
The legislation would allow holders to trade stablecoins—cryptocurrencies pegged to certain normal currencies—without reporting if they are worth less than $200, meant to allow them to be used for routine transactions. It would also clarify how cryptocurrencies can be used for charity, and would clarify reporting requirements for foreign investors on U.S. trading platforms.
This is one rare issue in DC with genuine bipartisan interest. But that doesn’t mean it isn’t controversial. In a Senate Finance Committee hearing on Oct. 1, some members expressed concerns that new rules could give crypto holders an advantage. Sen. Elizabeth Warren, D-Mass., said that some proposed “special rules” for cryptocurrencies all “tilted in the same direction.”
While Congress could be tied up in January with resolving the impasse over the expired enhanced premium tax credits, this is one issue that lawmakers may revisit before the midterm elections in November come into full swing.
Recent Tax Pieces:
Tips and Overtime Reporting Expected to Test Employers in 2026 – Trevor Sikes, Tax Notes ($):
Those tax breaks for workers reflect policy initiatives President Trump endorsed during his 2024 presidential campaign.
Although Treasury and the IRS released proposed regs on the qualified tips deduction and even gave employers transitional relief from reporting requirements in 2025, tax professionals still see several areas that require additional awareness and answers for employers and workers alike.
IRS Provides Certification Safe Harbor for Carbon Capture Credit – Mary Katherine Browne, Tax Notes ($):
The guidance became necessary after the EPA proposed permanently ending its greenhouse gas reporting program in September. Treasury and the IRS issued final regulations (T.D. 9944) in January 2021 that required taxpayers to comply with the subpart RR reporting requirements of that program to claim the section 45Q credit. Subpart RR required the reporting of greenhouse gases from facilities that inject carbon dioxide underground for geologic sequestration.
Student Loan Forgiveness Poses Looming Tax Dilemma for States – Daniel Moore, Bloomberg Tax ($):
Tax-exempt status for loan forgiveness under those plans is due to expire at the end of this year. The Republican-controlled Congress declined to extend an income-driven tax carveout created by a pandemic-era law and the Trump administration has declined so far to take executive action.
Health Costs Rise Everywhere in 2026, Not Just With Obamacare – Erin Durkin, Bloomberg Tax ($):
House Republicans passed legislation that would boost transparency around pharmacy benefit managers—the industry “middlemen” that implement drug benefits for health insurers, including negotiating rebates. Lawmakers and the administration have increasingly scrutinized PBMs for contributing to the rise in prescription drug costs through certain business practices.
Top Federal Tax Policies Of 2025 – Asha Glover, Law360 Tax Authority ($):
The budget reconciliation bill is the biggest tax policy passed this year, and its permanence helps foster certainty for businesses, making it easier for them to take the kinds of risks that create jobs and innovation, Arnold & Porter Kaye Scholer LLP partner Mark Epley said.
"I think the value delivered to the economy in the long term in terms of job creation and opportunities to innovate that come from making these tax law provisions permanent can't be overstated," Epley said.
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