Senator Lummis refers to the IRS’s crypto tax regulations as ‘bad tax regulations’

US Senator Cynthia Lummis has called for changes in the current crypto tax policy. Lummis emphasizes that the policy has been tilted against Bitcoin and other cryptocurrencies. Lummis said that the Bitcoin mining community is one of the hardest-hit groups due to the proposed provisions, which would endure potentially duplicative taxes and substantial compliance headaches. This interpretation follows Senator Lummis’ X post that says that America’s crypto tax laws disproportionately target Bitcoin and other digital assets. As a long-time advocate, she argued that the current tax laws are a “complete mess,” with the most problems manifested by Bitcoin. Bitcoin and digital assets are being unfairly targeted because of flawed tax rules. We need crypto revisions in reconciliation. — Senator Cynthia Lummis (@SenLummis) June 10, 2025 She said the cryptocurrency rules must be updated during the reconciliation process to curb that. Senator Lummis refers to the IRS’s crypto tax regulations as ‘bad tax regulations’ Senator Cynthia Lummis stated that Bitcoin and digital assets are wrongly singled out due to bad tax regulations. Though Lummis does not mention them by name, her remarks likely refer to the IRS’s crypto tax reporting rules, particularly those rolled out in the 2021 Infrastructure Investment and Jobs Act. This law took a wide view of “brokers,” placing miners and developers under the same category. The 2021 Infrastructure Investment and Jobs Act is also called the Bipartisan Infrastructure Law. This law widened the broker reporting rules in Sections 6045 and 6045A to cover digital assets. This wide-reaching categorization has faced criticism from miners and developers, who have voiced out their claims. According to them, they would be virtually unable to comply with these regulations. The rules force them to report information like names and transaction amounts in their tax filings — information they often do not even have access to. Lummis’ post called on Congress to try to make the rule change on a special amendment vehicle. The pro-Bitcoin senator calls for “crypto changes in reconciliation” to accelerate the amendment process. According to House rules, some tax or spending bills can be approved with a simple majority using reconciliation. Senator Lummis wants to use this method to change the definition of “broker” and bypass bipartisan gridlock. Bitcoin reached a new all-time high of $111,970 despite regulatory uncertainties People are also worried that the flawed tax code carries the potential for double taxation in the case of miners and participants in decentralized finance (DeFi). This is because Miners get taxed on their block rewards and then again on capital gains when they sell what they own. At the same time, DeFi users could face several taxable events even if they have not made any profits. However, despite such regulatory uncertainty, Bitcoin reached a new all-time high of $111,970. Cryptocurrency markets are rebounding today, with the two highest performers, Bitcoin and Ethereum, posting positive gains following a weekend of largely sideways trading. US lawmakers are debating new crypto rules to solve this regulatory uncertainty that may profoundly reshape the industry. The GENIUS Act is on the verge of a cloture vote in Congress this week, with the CLARITY Act also moving forward. There’s also a bill introduced to turn President Donald Trump’s executive order calling for a Strategic Bitcoin Reserve into law. The movement of these legislative actions has generated hope that the cryptocurrency tax reforms proposed by Senator Lummis could soon become law. Cryptopolitan Academy: Coming Soon – A New Way to Earn Passive Income with DeFi in 2025. Learn More

Source: Cryptopolitan