Right now, a crypto investor can sell Bitcoin at a loss, claim the deduction, and buy the same Bitcoin back sixty seconds later. Stock investors have not been allowed to do that for roughly a century. That gap, along with unanswered questions about staking, mining, stablecoins, and charitable donations, is finally in front of Congress.
“One of the biggest rewrites to crypto tax rules is happening now,” says Andrew Gordon, Managing Partner of Gordon Law Group, who recorded the video below outside the Capitol while these debates were underway.
The vehicle is the PARITY Act, which is easy to confuse with the CLARITY Act. The short version: the CLARITY Act decides which agencies regulate digital assets, while the PARITY Act decides how digital assets are taxed. It is the tax bill that would answer questions the IRS and Treasury have left open for more than a decade. Some of its provisions look likely to become law. Others, in Andrew’s words, are wishful thinking. This guide covers the difference between the two bills, what the PARITY Act would change, which provisions have real momentum, and what crypto investors should do before the next filing season.
What Is the PARITY Act?
The PARITY Act (formally the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act, H.R. 8899) is a bipartisan bill that would establish federal tax rules for digital assets, covering stablecoins, wash sales, staking and mining, lending, charitable donations, and more. Representatives Max Miller (R-OH) and Steven Horsford (D-NV) introduced it in the House on May 19, 2026.
Why does it matter? Because crypto taxation has been governed largely by a 2014 IRS notice and scattered guidance ever since. “For the last decade, the IRS, Treasury, they have not issued much guidance at all for digital assets,” Andrew explains. “The Parity Act addresses many of the questions that people have had, such as the timing and recognition of mining and staking rewards and whether the wash sale rule applies to crypto. So it’s really the first of its kind and a huge step forward for digital assets in America.”
The bill is also not traveling alone. On June 9, 2026, the House Ways and Means Committee held a hearing on digital asset taxation and released a package of companion bills covering mining and staking, voluntary disclosure, and anti-abuse rules. Even if enacted, the PARITY Act sets direction rather than every detail. As Andrew notes, “it’s on the IRS and Treasury to define the bill, to provide guidance. It’ll kickstart regulation and rulemaking in the United States for crypto.”
Before diving into the provisions, it helps to clear up the name that PARITY is most often confused with.
How the PARITY Act Differs From the CLARITY Act
The CLARITY Act is a market structure bill that decides which regulators, primarily the SEC and CFTC, oversee digital assets. The PARITY Act decides how digital assets are taxed. They are separate bills moving on separate tracks.
“There is a big difference between parity and clarity,” Andrew says. “While clarity has guidance on creating new tokens, parity refers to the tokens that already exist, how everyday taxpayers will have to report, how they’ll pay taxes, what is actually taxable, what’s not, when you have to pay your taxes, and other requirements.”
The CLARITY Act (H.R. 3633) advanced out of the Senate Banking Committee on May 14, 2026 by a 15 to 9 vote. The PARITY Act does not need to wait for it; the tax bill can move independently because it borrows its stablecoin definitions from the GENIUS Act, which is already law.
So what would the PARITY Act actually change? Start with the provision most likely to reach the finish line.
The Crypto Wash Sale Rule: The Change Most Likely to Pass
The wash sale rule blocks investors from claiming a tax loss if they buy the same or a substantially identical asset within 30 days of selling it. It applies to stocks and securities today, but not to crypto, because the IRS treats crypto as property rather than a security.
That is the loophole behind crypto tax-loss harvesting: sell at a loss, deduct it, and buy right back with no waiting period. The PARITY Act would rewrite Section 1091 of the tax code to cover “specified assets,” a definition that includes any digital asset. The bill even spells out that trading on a different exchange or a different blockchain does not make two tokens meaningfully different.
“Right now, crypto investors seem to be under a loophole where the wash sale rule doesn’t apply,” Andrew says. “This legislation and many other pieces of legislation that we’ve seen over the years closes this loophole, applies the wash sale rule to crypto investors. So most likely, we’re going to see that in final legislation.”
The same section of the bill extends related anti-abuse rules, including constructive sale rules, and would let professional digital asset dealers and active traders elect mark-to-market accounting, matching how securities traders are treated. If loss harvesting is part of your strategy, the window may be measured in months, and the next section explains an area where the news is better.
Stablecoins Would Be Taxed More Like Cash
Under the PARITY Act’s deemed-basis rule, payments made with regulated, dollar-pegged stablecoins would generally not trigger taxable gains or losses. In practice, spending a compliant stablecoin would work like spending dollars instead of selling property.
Today, every stablecoin payment is technically a disposal of property that must be tracked and reported, even when the gain or loss is a fraction of a cent. Starting with the new Form 1099-DA broker reporting rules, those transactions generate enormous volumes of reporting data with essentially no tax value. The deemed-basis rule would apply only to stablecoins issued under the GENIUS Act’s regulatory framework, which keeps the benefit tied to reserves-backed, supervised issuers.
Stablecoins are among the bill’s least contested provisions. Staking and mining are where the fight is.
Staking and Mining Rewards: The Wishful Thinking Part
The most debated proposal would let miners and stakers defer tax on their rewards until they sell them, instead of owing tax on the value the moment rewards are received. Under current IRS guidance, staking rewards are ordinary income when the taxpayer gains control of them, even if the tokens are never sold and later crash in value.
“One of the areas that may be a little bit more wishful is deferring tax on staking and mining until it’s sold,” Andrew cautions. “This seems to be controversial. There’s a lot of discussion about how long deferral should exist, if at all. So while we hope that legislation will include this provision, it seems to be a bit of an uphill battle.”
A companion bill in the Ways and Means package, the Tax Clarity for Mining and Staking Act (H.R. 9175), would generally treat newly minted tokens as ordinary income at receipt while allowing taxpayers to elect deferral until disposition. Any version of deferral would be more favorable than the current rules, which is exactly why its cost makes it contentious.
Two quieter provisions would also matter to everyday investors: donations and small transactions.
Charitable Donations and the De Minimis Question
The PARITY Act would create a two-track system for donating crypto to charity. Large, liquid assets such as Bitcoin and Ethereum could be donated without a qualified appraisal, the same way publicly traded stock is treated. For smaller or illiquid tokens, the deduction would be limited to what the charity actually receives when it sells the asset.
That fixes a real pain point: under current rules, donating more than $5,000 of crypto requires a qualified appraisal, an odd requirement for an asset whose price is published every second.
On small transactions, manage your expectations. The bill does not create a de minimis exemption for low-value crypto payments. Instead, it directs the Treasury to study the issue, deliver a report to Congress within one year, and issue interim guidance within 180 days. “Buy coffee with crypto” relief remains a goal, not a rule.
There is one more idea in the mix, and for anyone with past reporting gaps it may be the most important one.
A Crypto Voluntary Disclosure Program May Be Coming
A companion bill, the Digital Assets Voluntary Disclosure Program Act (H.R. 9174), would direct the Treasury to establish a one-time program allowing taxpayers to correct past crypto reporting mistakes with reduced penalties and a path back into compliance.
“Both sides of the aisle seem to recognize that there is a big problem with reporting and enforcement in crypto, and we need a path forward for everyone,” Andrew says.
One practical caution: do not wait for a program that has not passed. The IRS is already receiving exchange data, and Form 1099-DA reporting gives it far more visibility into crypto activity than it had even two years ago. Taxpayers with unreported crypto have options today, including amended returns and the IRS’s existing voluntary disclosure practice, and acting before the IRS makes contact matters. The IRS is generally more receptive to taxpayers who correct mistakes proactively than to those it finds first.
Who Would Be Affected by the PARITY Act?
You don’t need to be a full-time trader or a crypto business to feel these changes. “The average crypto investor will be impacted by parity,” Andrew notes, “because almost everyone that’s trading crypto assets is involved in things like staking, mining, or even donating crypto to charities.” The groups with the most at stake:
- Investors who harvest tax losses. The wash sale rule would end the sell-and-rebuy strategy in its current form.
- Stakers and miners. The timing of when rewards are taxed could shift in your favor, or stay exactly where it is.
- Stablecoin users. Payments and transfers could stop generating taxable events and reporting clutter.
- Crypto donors. Appraisal requirements for liquid coins could disappear.
- Anyone with unreported years. A formal disclosure program could offer reduced penalties, but only for those who come forward.
When Could the PARITY Act Become Law?
The PARITY Act has not passed. As of September 2026, it remains pending in the House Ways and Means Committee. The committee is reportedly preparing a broader digital asset tax package, and news reports indicate the Senate Finance Committee may release its own crypto tax legislation in fall 2026.
Andrew’s read from Washington: “I’m very hopeful and optimistic that it’ll happen in the next few months. We need these decisions to happen before the next tax filing season. So I hope that it’s passed this Congress, but if not now, hopefully very soon. Whether it’s this year or the next, crypto legislation is going to be passed.”
Which raises the practical question: what should you do while Congress debates?
What Crypto Investors Should Do Now
Here is the good news: nearly every provision described above would give taxpayers clearer and generally fairer rules than the ones in place today, and nothing in the bill penalizes investors who prepare early. Preparation now pays off under either outcome.
- Talk to a tax attorney first, not just your accountant. If you have unreported crypto income or you are unsure whether past returns were accurate, conversations with a tax attorney are protected by attorney-client privilege. Conversations with an accountant generally do not carry the same protection.
- Get your transaction history in order. Every provision in this bill, from wash sales to staking, depends on records: dates, cost basis, wallets, and exchanges. Clean records are valuable under current law and essential under any new law.
- Harvest losses with your eyes open. The wash sale window for crypto is still open, but building a long-term strategy around a loophole Congress intends to close is risky. Understand the effective dates before you act.
- Do not wait for the disclosure program. If you have past reporting gaps, options exist right now. Waiting for a bill that may not pass, while broker reporting expands, works against you.
- Watch the calendar. If legislation passes before the next filing season, some provisions could apply quickly. Build flexibility into your year-end planning.
Pending Legislation Is Not a Tax Strategy
Crypto tax software can total your transactions, but it cannot tell you how a pending bill affects your position, whether to amend a past return, or how to respond if the IRS asks questions. And when past returns are in question, one protection matters most: conversations with a tax attorney are covered by attorney-client privilege, a protection that conversations with an accountant generally do not carry. At Gordon Law, tax attorneys and accountants work as one team, so your planning, preparation, and any IRS defense happen under one roof.
Gordon Law Group was founded by Andrew Gordon, a tax attorney and CPA. We have focused on crypto tax since 2014 and have prepared more than 1,500 crypto tax reports. Our team also works directly with policymakers as crypto tax rules are written.
Whether you are fully compliant and planning ahead or several years behind on reporting, there is a path forward, and it is easier to walk it before the rules change than after.
Schedule a confidential consultation to get answers about your crypto taxes.
About Andrew Gordon
Andrew Gordon, featured in the video above, is the Managing Partner of Gordon Law Group. He is a tax attorney and CPA who has focused on cryptocurrency taxation since 2014. Read his full bio on his team profile page.
