Senators Race Against Clock to Overhaul Crypto Tax Rules Before Market Chaos Hits

Lawmakers scramble to patch glaring loopholes in digital asset taxation—before the next bull run turns the IRS into an unwitting charity.

The ticking time bomb in your portfolio

With decentralized finance surging, outdated tax policies now risk either strangling innovation or letting billions slip through Uncle Sam’s fingers. The Senate’s last-ditch proposal aims to split the difference—because nothing inspires bipartisan action like the smell of uncollected revenue.

Wall Street’s worst nightmare?
A system where crypto traders actually understand their liabilities. The fix would force clearer reporting from exchanges while (theoretically) preventing double taxation on staking rewards—assuming anyone can define ‘staking’ in legalese.

One hedge fund manager groaned anonymously: ‘First they ignore the space, then they regulate it poorly. At least the compliance lawyers will buy new yachts.’

The proposed changes will likely ease the tax burden on companies with investments in digital assets. 

“We respectfully urge Treasury to act swiftly. By issuing interim guidance and ultimately adjusting the final rule, Treasury can prevent a harmful and unintended tax policy from taking hold – one that undermines fairness, distorts markets, and penalizes U.S. companies for adopting innovative financial strategies,” the letter stated. 

Enacted in 2022 and taking effect in 2023, the Inflation Reduction Act introduced a 15% minimum corporate tax targeting large U.S. companies. The provision applies to firms that report an average annual income exceeding $1 billion over a three-year period.

This minimum tax—calculated using a company’s financial statement income rather than taxable income—has raised concerns among digital asset firms, who argue it could significantly increase their tax liabilities due to the way crypto holdings are reported on balance sheets.

Senator Lummis’ latest push for tax policy reforms comes on the heels of the Senate’s razor-thin vote to stall the GENIUS Act. The bill, which Lummis co-sponsored, fell short by a single vote in a 49-48 decision, halting momentum on legislation aimed at advancing innovation and regulatory clarity in the digital economy.

A Senate motion to advance consideration of the GENIUS Act stalled on May 8, after Democratic lawmakers raised objections tied to former President Donald Trump’s growing alignment with the cryptocurrency sector.

Read More

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the shiba inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.