Less Tax Paperwork for Digital Asset Owners Act
- Bill Number
- H.R. 9178
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-06-08: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-22T20:25:16Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to reduce tax compliance burdens for owners of digital assets by simplifying the recognition of gains and losses, exempting small network fees from taxation, and providing special rules for U.S. dollar stablecoins. It aims to ease paperwork and reporting requirements for everyday digital asset transactions while maintaining tax integrity through exceptions and oversight mechanisms.
Key Provisions
- De minimis network fees (Section 2): No gain or loss is recognized when a digital asset is used to pay a network fee of $10 or less for validating another transaction. This applies to dispositions treated as payments, with adjustments to basis or deductions for unrecognized gain. Exclusions apply to traders, brokers, dealers, high-volume users (over 5,000 transactions), and certain mark-to-market assets. The Secretary may grant administrative exceptions for low-revenue-impact taxpayers.
- Simplified accounting for widely traded digital assets (Section 3): Taxpayers may elect annual simplified gain/loss calculation for designated types of widely traded digital assets, treating net results as short-term capital gains or losses. The method aggregates sales, fair market values, and acquisitions, with special rules for lending, transitions, and nonrecognition. Elections apply ongoing unless revoked, with 5-year waiting periods for re-election. Coordination avoids wash sale and related-party rules in some cases.
- U.S. dollar stablecoin transactions (Section 4): Basis in qualified stablecoins acquired at or near redemption value is set at redemption value. Gains/losses on sales are calculated as if exchanged at redemption value, with similar treatment for non-cash consideration. Exceptions apply to traders, high-volume users, non-dollar functional currencies, and related-party transactions (with adjusted thresholds).
- Broker reporting updates (Section 5): Modifies information return requirements to exclude or aggregate reporting for de minimis fees and elected simplified accounting assets. Brokers must report aggregate data where needed for verification.
- Definitions (Section 6): Adds terms such as digital asset, widely traded digital asset (requiring market cap over $500 million and liquidity criteria, with inflation adjustments), qualified U.S. dollar stablecoin (tied to permitted issuers under the GENIUS Act), and related concepts like wrapped and tokenized assets.
Significant Changes to Existing Law This bill introduces new sections 1044, 1051, and 1063 to the Internal Revenue Code, creating targeted exceptions and simplified methods not previously available for digital assets. It carves out de minimis treatment for small fees (previously fully taxable dispositions), allows elective annual mark-to-market-like accounting for qualifying assets (instead of transaction-by-transaction tracking), and treats stablecoins nearly like currency for basis and valuation purposes. Broker rules under section 6045 are updated to align with these changes, reducing detailed transaction reporting in covered cases. These represent departures from general capital gains rules under subchapter O.
Potential Impacts
- On citizens: Lowers compliance costs and record-keeping for individual digital asset holders by exempting minor fees and simplifying annual calculations, potentially encouraging broader participation in digital asset markets.
- On government agencies: Reduces IRS administrative burden through aggregated reporting but requires new guidance, list publications for stablecoins, and oversight of elections/exceptions. May affect revenue collection timing due to deferred recognition in some cases.
- On international relations: Limited direct effects; stablecoin rules reference the GENIUS Act for issuer qualifications, which may interact with cross-border digital asset flows, but no explicit changes to treaties or foreign tax credits.
Main Stakeholders Affected
- Individual and institutional digital asset owners and traders.
- Brokers, exchanges, and validators facilitating digital asset transactions.
- U.S. dollar stablecoin issuers and users.
- The Internal Revenue Service and Department of the Treasury (for implementation and guidance).
- Partnerships and S corporations holding digital assets.
Notable Legal, Constitutional, or Political Implications The bill delegates significant regulatory authority to the Secretary of the Treasury for guidance, elections, and abuse prevention, raising standard administrative law considerations but no apparent constitutional issues. It promotes tax neutrality for emerging technologies without altering core capital gains frameworks. Politically, it reflects efforts to modernize tax rules for digital assets amid growing market adoption, with effective dates delayed to 2027–2028 to allow preparation. No direct impacts on federalism or individual rights are evident from the text.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-08: Referred to the House Committee on Ways and Means.
- 2026-06-08: Introduced in House
- 2026-06-08: Introduced in House
Bill Versions
- Less Tax Paperwork for Digital Asset Owners Act — issued 2026-06-08 — PDF (34 pages)