PARITY Act directs Treasury to study de minimis crypto tax exemption

A bipartisan group of lawmakers has introduced legislation directing the Treasury Department to study the potential for a tax exemption on small cryptocurrency transactions. The bill, known as the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act, or PARITY Act, was introduced in the House by Representatives Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey.

The proposed legislation does not immediately create an exemption. Instead, it mandates that the Treasury, which oversees the Internal Revenue Service, complete a study and issue interim guidance within 180 days on the feasibility of a so-called de minimis exemption for transactions under $200. The review would assess the compliance burden of reporting such small transactions, quantify how many sub-$200 transactions are currently reported, and evaluate what enforcement resources would be needed if an exemption were enacted. The study must also consider potential risks of abuse, such as traders breaking larger orders into multiple small swaps to avoid reporting.

The crypto industry has long argued that the current tax framework, where every transaction can be a taxable event,...