Bipartisan House Bill Directs Treasury to Study De Minimis Crypto Tax Exemption Within 180 Days
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Key Takeaways
- The PARITY Act instructs the Treasury to study the compliance burden of reporting small crypto transactions and assess potential abuse risks of a de minimis exemption, without enacting one.
- The bill includes provisions treating regulated payment stablecoins like cash for tax purposes and applies wash sale rules to crypto assets for the first time.
- Sponsor Rep. Max Miller expressed confidence the bill could pass before January 2027, as the Senate separately advances the CLARITY Act to divide crypto oversight between the SEC and CFTC.
A bipartisan group of House lawmakers introduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act, known as the PARITY Act, on Tuesday, directing the U.S. Treasury to study a de minimis tax exemption for crypto transactions and provide interim guidance within 180 days, though the bill does not itself create such an exemption.
Republican Representative Max Miller, one of the bill’s sponsors, said in a statement that “our tax code has failed to keep pace with the rapid growth of digital assets and modern financial technology.”
PARITY Act Directs Treasury to Study Compliance Burden and Abuse Risk of a De Minimis Exemption
The bill directs the Treasury, which oversees the IRS, to study taxpayers’ compliance burden in reporting small crypto transactions and to report on the number of crypto transactions worth less than $200 that are reported to the IRS annually.
It also asks the Treasury to report on what the IRS would need if a de minimis exemption were passed into law and what types of abuse could occur under such an exemption. The legislation was introduced after lawmakers released a discussion draft in March.
The bill arrives amid broader industry pressure on Congress. The crypto industry has separately called on Congress to pass legislation exempting small crypto transactions from tax. Crypto exchange Kraken said last month it sent 56 million tax forms to the IRS, with nearly a third covering transactions worth less than $1 and more than 75% covering transactions worth less than $50.
Bill Retains Stablecoin Tax Treatment, Safe Harbor Provision, and Wash Sale Rules for Crypto
The PARITY Act retained several provisions carried over from the March discussion draft. One section would treat regulated payment stablecoins similarly to cash for tax purposes, with no recognized gains or losses unless the cost basis of the tokens is less than 99% of their redemption value.
The bill also retained a safe harbor provision for trading through brokers and included language applying wash sale rules to crypto assets, which currently do not apply to digital assets under existing law.
Miller Said He Is Confident the Bill Can Pass Before the End of the Current Congress
Miller told Bloomberg Tax he was confident the bill could pass before the end of the current Congress, which concludes in January 2027 following the November 2026 midterm elections, when every House seat is up for election. Democratic Representatives Steven Horsford and Suzan DelBene, along with Republican Representative Mike Carey, also helped introduce the bill.
The bill arrives as the Senate prepares to take up the Digital Asset Market Clarity Act, the CLARITY Act, which the Senate Banking Committee advanced on May 14 and which would formally divide crypto market oversight between the SEC and CFTC.
