Congress needs to fix Bitcoin taxes

Growing up, I lived in northwest Iowa in the Corn Belt. This region is known for its fertile farmlands and high productivity. When my grandpa planted corn and beans, he knew Uncle Sam would come for his portion — not when he planted, not while it grew and not when he harvested — but when he Buy your own product it. Families that mine for gold, grow wheat, or drill for oil are all still considered to be producers of commodities. 

Taxman is twice as aggressive when it comes to individuals who mine Bitcoin, digital gold of today. Not only that, when people use bitcoin to buy things, they have to calculate and report capital gains — even for small transactions like a cup of coffee.

Trump ran his campaign on the promise to make America “the undisputed bitcoin superpower and the crypto capital of the world.He has delivered so far. He has ended Operation Chokepoint 2.0 — the practice of exerting regulatory pressure to debank companies and individuals in the bitcoin and cryptocurrency industries. He will launch a Strategic Bitcoin Reserve. And he is urging Congress to pass market structure and stablecoin legislation — which the House is poised to do this week during “crypto week.” The Washington leadership is yet to make one of the biggest policy changes needed to unlock the potential of Bitcoin in America, namely fixing unfair taxes on bitcoin.

Politicians have agreed that bitcoin is considered a commodity. Securities and Exchange Commission. Commodity Futures Trading Commission and federal courts all treat it as a commodity — but the Internal Revenue Service Does not. That’s a big problem. In general, the IRS taxes only commodity producers when they sell their products. But, the IRS is currently taxing bitcoin miners at both times they are mining bitcoin The following are some examples of how to get started: When they sell it. This is the IRS’s only treatment of Bitcoin.

The IRS has issued a series of misguided statements “guidance” In 2014, the IRS issued a ruling that requires Bitcoiners recognize their mining rewards as income rather than self-created assets. The IRS can continue to do this until they change their guidance. “double dip” on Bitcoin miners. Congress, not the IRS, should be providing long-term certainty to individuals, businesses, and markets. Tax code can be simplified and made more fair by treating bitcoin like any other commodity.

In addition, individuals who transact bitcoins, regardless of how little the amount is, must consider it as a capital gain taxable transaction and calculate the difference in the value when compared with the dollar, based on when the bitcoin was acquired versus the time it was spent. It is unnecessary for both taxpayers and the IRS to deal with this administrative burden. Foreign currencies can also be used for small purchases, without having to comply with complex accounting rules. A bitcoin transaction should also receive an exemption. There are thousands of businesses around the world that accept bitcoins as payment. However, most Americans choose not to use this service due outdated and inefficient taxes.

Congress could have addressed these problems in the One Big Beautiful BillBut it never happened. 

We should still give Senator Cynthia Lummis credit for her recent unveiling of a draft digital asset tax reform that addressed these and other issues. In addition, during the hearings of the House Ways and Means Committee “crypto week” Taxation of digital assets

Bitcoin is not going anywhere, but old tax laws and regulatory stumbling blocks are preventing it. We need to start treating bitcoin as a commodity, just like corn, beans and cotton. The IRS should not be involved in everyday purchases. 

Taxman’s greed is something that even my grandfather can understand.

Zach Whiting, manager of Riot Platforms’ public policy department. The opinions expressed are not necessarily the views of BTC Inc., or Riot Platforms.