A US Senate committee will hold a hearing next week to discuss the taxation of digital assets, aligning with the White House’s crypto report released in July.
The hearing, led by Finance Committee chair Mike Crapo, is scheduled for Wednesday, featuring testimony from Coinbase’s vice president of tax, Lawrence Zlatkin, and Coin Center’s policy director, Jason Somensatto, according to the notice released on Wednesday.
This action follows the White House Digital Asset Working Group’s recommendations from July, which advised lawmakers to classify crypto as a new asset class and adapt current tax regulations for securities and commodities to cover digital assets.
If legislation is not implemented, the recommendations urge the Treasury Department and Internal Revenue Service to provide guidance on the taxation of stablecoin payments and the treatment of small crypto amounts earned from airdrops, mining, and staking.
The IRS currently classifies cryptocurrencies and non-fungible tokens as property rather than currency, which means any transaction involving these digital assets could trigger capital gains taxes if sold or transferred at a profit.
Developments in crypto regulation have significantly progressed since Trump’s return to office in January, aiming to foster innovation, retain talent, and address the slow advancements seen under the Biden administration, where tax regulations were a primary point of confusion for industry stakeholders.
Senate Finance Committee to hear from American tax experts
The committee will also hear from Annette Nellen, chair of the Digital Assets Tax Task Force at the American Institute of Certified Public Accountants, according to the notice.
Related:Top US Democrat signals fight over crypto market structure
Andrea S. Kramer, a founding member of ASKramer Law in Chicago, specializing in crypto tax, will also be present.
US senator wants to prevent double taxation of crypto participants
Senator Cynthia Lummis has sought to address what she describes as the “unfair tax treatment” of crypto miners and stakers, stating they are taxed twice: first upon receiving block rewards and again when sold.
“It’s time to end this unfair tax treatment and ensure America stands as the world’s Bitcoin and Crypto Superpower,” Lummis wrote on X in late June.
Lummis attempted to include a provision addressing this issue in Trump’s budget reconciliation bill in early July; however, it was not included in the amendments presented to the Senate floor before the bill passed.
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