Mining Deferral Loophole Threatens Bipartisan Crypto Tax Bill Push

Mike Kaercher, deputy director of NYU Law's Tax Law Center, told the House Ways and Means Committee that a proposed deferral for mining income "violates parity with traditional finance"—and that's the kind of language that kills bipartisan momentum. The committee examined seven draft bills on June 9, 2026, aiming to fix crypto tax headaches: small-transaction exemptions, ending double taxation on mining and staking, and reducing paperwork for everyone. But the mining deferral drew the sharpest fire from Democrats, who worry it becomes a permanent subsidy.

Seven Bills, One Sticking Point

The bills are meant to address real pain points. Chairman Jason Smith argued they close gaps in the tax code and ease burdens for digital asset owners. One bill would exempt reporting for very small gains, letting stablecoin payments avoid a pile of paperwork. Another would eliminate the double tax on mining and staking proceeds—income taxed both on receipt and at sale. That's the provision Kaercher flagged. "Despite some thoughtful guardrails," he said, "it may be possible for taxpayers to permanently escape tax by earning rewards through certain business structures." Ranking Democrat Richard Neal summed it up: "I'm aligned with that goal—eventually. There's healthy skepticism on both sides."

The Mining Deferral That Could Be Gamed

Kaercher's specific objection: the bill gives miners and stakers an election to defer income from newly minted coins until disposition. He called it a new tax subsidy that violates the principle that income is taxed on receipt. Committee Democrats seized on that, demanding guardrails or outright removal. The broader context matters: the IRS is already swamped with a new crypto reporting regime while cutting staff under President Trump. Coinbase's VP of tax, Lawrence Zlatkin, noted "confusion for taxpayers, compliance challenges for businesses, unnecessary burdens for the IRS." Anchorage Digital's head of policy, Kevin Wysocki, tied regulatory clarity to tax clarity: "If we want innovation, investment, and jobs to stay in America, policymakers need rules that are clear, workable, and built for modern technology."

Bipartisan Goals Meet a Crowded 2026 Calendar

These bills rank second in priority behind the Digital Asset Market Clarity Act in the Senate. But the timeline is brutal—session ends December 2026, and the agenda is packed. Senator Cynthia Lummis has tried moving similar tax legislation through the upper chamber without success. Both chambers must agree before any law governs U.S. crypto activity. Without a fix to the mining deferral, expect these bills to languish alongside the Senate's stalled efforts.

Source: Crypto tax bills a work-in-progress as U.S. House lawmakers pose concerns
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