Tax treatment would address small digital-asset fees and stablecoin transactions

A taxpayer would not recognize gain or loss when paying a qualifying network or transaction fee with a digital asset. The rule would cover network fees and brokerage, trading, liquidity, or similar transaction fees of no more than $10 per underlying transfer. The digital asset used to pay a transaction fee must be the same type as the digital asset involved in the underlying transfer. The exception would not cover certain dealers, brokers, traders, businesses that validate transactions for others, taxpayers with more than 5,000 transfers in the prior tax year, or assets already covered by specified accounting methods. The Treasury Secretary would issue guidance, including rules to prevent people from structuring transactions to qualify. The rule would apply to digital-asset fee payments made after December 31, 2027.

Taxpayers would generally use a qualified U.S. dollar stablecoin’s redemption value to determine its tax basis, sale price, and value in exchanges. The rules would cover qualified U.S. dollar stablecoins issued by permitted or properly registered payment stablecoin issuers. The rules would not apply to stablecoin dealers, brokers, traders, taxpayers with more than 5,000 covered transactions in the prior year, or taxpayers using a functional currency other than the dollar. The treatment would depend on facts showing that the stablecoin’s value is generally within 0.5 percent of its redemption value. Related-party transactions would use stricter 100-percent valuation thresholds. The rules would apply to taxable years beginning after December 31, 2026; Treasury would provide temporary rules before final guidance is issued.

The Treasury Secretary would establish a voluntary disclosure program allowing eligible taxpayers to amend returns, pay the related tax and penalties, and seek limited penalty or prosecution protections. The program would cover taxpayers whose digital-asset reporting failures affected tax items during the program’s defined lookback period. Participants would need to file amended returns, pay the tax deficiency and interest, pay the required digital-asset violation penalty or use an accepted installment agreement, and provide required information. Uncertified participants could receive protection from certain additional penalties and criminal referrals for properly disclosed violations, while certified participants would receive narrower penalty protection. Participation could require a Treasury waiver when the taxpayer faces an ongoing audit or criminal investigation. Treasury would establish the program within 12 months after enactment, and eligible taxpayers generally would have 24 months after establishment to apply and file amended returns.