US lawmakers push for simplified crypto tax reporting with PARITY Act

A bipartisan group of US lawmakers has introduced a bill that would direct the IRS to study how it could create a de minimis exemption for cryptocurrency taxes.

The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields Act (PARITY Act) was introduced in the House on Tuesday after a discussion draft was released in March. The bill is seen as a step towards simplifying tax reporting for small crypto transactions and providing relief for taxpayers who currently face significant compliance burdens.

The Treasury would be required to study a de minimis exemption, provide interim guidance within 180 days on what relief it can offer under existing authority, and report on the number of crypto transactions worth less than $200 that are reported to the IRS. The bill also asks for an analysis of taxpayers' compliance burden in reporting small crypto transactions.

The PARITY Act is seen as a companion to another bill currently being considered by Congress that would regulate the crypto industry. Lawmakers are optimistic about the bill's chances of passing by the end of this Congress, which ends in January after the November midterm elections.