US Senate Schedules Hearing To Examine Taxation Of Crypto Assets

The US Senate Finance Committee will hold a high-profile hearing on October 1 to examine the taxation of crypto assets. The hearing will see industry experts, including representatives from Coinbase and Coin Center, provide testimony.

The session is widely seen as key to shaping the future of crypto taxation in the US.

US Senate To Hold Key Hearing

The US Senate Finance Committee has scheduled a hearing to examine the topic of crypto taxation in the US. The hearing will put several tax lawyers, policy advocates, and crypto executives, including Coinbase’s VP, in the hot seat to provide testimony. Senate Finance Committee Chair Mike Crapo confirmed that the hearing, “Examining the Taxation of Digital Assets,” will be held on October 1 at the Dirksen Senate Office Building. The session will feature Jason Somensatto, Coin Center policy director, ASK Kramer Law’s Andrea Kramer, and Annette Nellen, Chair of the American Institute of CPAs’ Digital Asset Tax Task Force.

However, the spotlight will be on Coinbase’s Vice President of Tax, Lawrence Zlatkin.

The Crypto Taxation Debate

The hearing comes against the backdrop of an ongoing debate about how crypto assets should be taxed. Pro-crypto Senator Cynthia Lummis introduced legislation in July to update the tax code for crypto assets. Lummis argued that existing rules are outdated and hinder innovation. The White House’s Digital Asset Working Group also submitted a report urging Congress to modify tax rules to cover digital assets. The report urged the Treasury Department and IRS to clarify grey areas of stablecoin payment transactions and whether small sums from mining, staking, and airdrops should trigger taxable events.

The CAMT Backlash

Senator Cynthia Lummis also urged the Treasury Department to address an “unintended tax burden” on digital asset companies due to a provision in the Inflation Reduction Act. The provision in question, called the corporate alternative minimum tax (CAMT), imposes a 15% minimum levy on adjusted financial statement income, including unrealised gains from digital assets. Critics have warned that the provision could force companies to pay tax on paper profits even if they don’t sell their assets. Senators Lummis and Bernie Moreno also wrote to Treasury Secretary Scott Bessent, arguing that the CAMT could harm US companies by forcing them to sell tokens to cover their tax liabilities.

The Senators urged Bessent to use his authority to exempt unrealized crypto gains from the calculation, aligning tax policy to reflect that gains are only realized upon the sale of the assets in question.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice