Two pending digital asset bills would provide needed regulatory and tax clarity but could heighten criminal tax exposure for noncompliant taxpayers by removing ambiguity as a defense against willfulness, according to an attorney and CPA.
Distinct digital asset frameworks
The two measures address different parts of the digital asset ecosystem, and they sit at different stages in Congress.
The Digital Asset Market Clarity Act (CLARITY Act), H.R. 3633, is a market-structure bill that determines how digital assets are classified, which regulator has jurisdiction, and what rules exchanges must follow. It passed the House and now awaits Senate action. Supporters are pressing for a vote before the Senate leaves for its August recess at the end of the week, according to Reuters.
The Digital Asset PARITY Act (PARITY Act), H.R. 8899, is a tax bill introduced by Representatives Max Miller (R-OH) and Steven Horsford (D-NV) and referred to the House Committee on Ways and Means. It would align the tax treatment of digital assets with that of traditional financial instruments.
Because the bill draws its stablecoin definitions from the already-enacted Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, P.L. 119-27, it can advance on a separate track from the market-structure legislation.
“CLARITY would principally establish the regulatory structure for digital asset markets. PARITY would amend targeted tax rules governing transactions within those markets,” David Klasing, founder of Tax Law Offices of David W. Klasing, P.C., told Checkpoint.
Treasury saddled with regulatory cleanup
The PARITY Act combines traditional anti-abuse provisions with new nonrecognition and accounting rules, and it would hand the Treasury Department a substantial guidance workload.
The bill extends the wash sale rule under IRC § 1091 to digital assets, deferring losses when a substantially identical asset is reacquired within 30 days before or after a sale, and applies the constructive sale rule under IRC § 1259. It also expands securities-lending treatment under IRC § 1058 so that lending a qualifying digital asset is not a taxable sale, and it lets dealers and active traders make a mark-to-market election under IRC § 475.
Klasing said the “substantially identical” standard is where the guidance will be tested, because the bill defines the term broadly and Treasury must decide how it reaches wrapped tokens, liquid staking tokens, and the same coin bridged across chains.
“Congress is bolting mature-market rules onto plumbing that was never built to support them, and the plumbing is where compliance will strain first,” he said.
To address “phantom income,” the bill would let taxpayers elect to defer income from newly created staking and mining rewards for up to five years or until disposition, with dispositions during the deferral period treated as ordinary gain or loss. Klasing cautioned that the relief carries a long administrative tail. “Deferral postpones phantom income rather than curing it and concentrating several years of rewards into one recognition year carries its own liquidity risk,” he said.
A “deemed-basis rule” would treat regulated, dollar-pegged payment stablecoins that qualify under the GENIUS Act and are acquired within 1% of $1.00 as cash, sparing holders from tracking minor gains and losses. Klasing flagged a cliff: units acquired during a “deep depeg,” or when basis falls below 99% of redemption value, could fall outside the rule and sit in the same wallet as qualifying units.
Statutory clarity to heighten criminal tax exposure
The same clarity, Klasing warned, would remove ambiguity as a defense against willfulness in criminal cases.
“For taxpayers who have been intentionally leaving crypto off their returns, the real story is what this legislation does to willfulness,” he said. “A criminal tax case requires the government to prove the intentional violation of a known legal duty, and for years the genuine ambiguity around digital asset taxation gave noncompliant taxpayers room to claim confusion. Statutory clarity takes that room away.”
That shift would arrive as new broker reporting on Form 1099-DA gives the IRS greater visibility into digital asset transactions. “The data catches up at the same time as the law,” Klasing said. Moving assets off a reporting exchange into self-custody to keep them from the government’s view, he added, is the kind of affirmative act that can turn a civil deficiency into felony tax evasion under IRC § 7201.
Klasing’s advice to anyone with unreported years was to act now. “The time to fix them voluntarily is while the government is still assembling its dataset, because the voluntary disclosure path closes once the government already has your information,” he said.
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