House panel advances first federal crypto tax framework after Clarity Act setback

The House Ways and Means Committee voted 38-5 to advance the Digital Asset Tax Certainty Act. The bill would establish clear federal tax rules for cryptocurrencies. Committee Chair Jason Smith called it the first-ever tax framework for digital assets. The bill would exempt network or transaction fees of $10 or less from taxation. The exemption would not apply to service providers conducting transactions for others. That provision would take effect in December 2027 if the bill passes. The bill would require the Treasury Department to establish a Digital Asset Voluntary Disclosure Program within 12 months of enactment. Qualifying taxpayers could amend earlier returns. They could settle unpaid tax, interest, and penalties. The bill would tax mining and staking income as ordinary income. Certain investment trusts could stake their holdings without that activity alone affecting their tax status. An earlier option to defer income was removed. The current version does not clarify when mining and staking income would be recognized. Rep. Steven Horsford said the bill leaves that timing question unresolved. The House is expected to leave Washington until after the November elections. Alison Mangiero said the bill could be taken up during the lame duck period. Attention could turn to the Senate Finance Committee. The Senate had failed less than a day earlier in its first procedural vote on the Clarity Act. The Clarity Act would broadly regulate digital assets. Democrats said they opposed the bill largely because they believed its ethics concerns were not fully addressed. Those concerns involved President Donald Trump's crypto interests, which had grown to hundreds of millions of dollars. Rep. Lloyd Doggett said the House bill would provide billions of dollars in tax breaks to the crypto industry. Doggett said the benefits would go to billionaire crypto holders and wealthy Americans such as the Trump family.