Senators Pat Toomey (R-PA) and Kyrsten Sinema (D-AZ) proposed the “Virtual Currency Tax Fairness Act,” a new bill with bipartisan support, in Congress on Tuesday. By establishing a “tax exemption for minor personal transactions,” the bill seeks to “ease the use of digital assets for ordinary purchases,” according to the U.S. Senate Committee on Banking, Housing, and Urban Affairs statement. Senator Toomey remarked, “While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way.” While #crypto has the potential to become part of our everyday lives, the current tax code stands in the way. @SenatorSinema and I are teaming up to make it easier to use digital currencies as a common method of payment by exempting from taxes small personal transactions. pic.twitter.com/B6K3jT7GBC — Senator Pat Toomey (@SenToomey) July 26, 2022 Internal Revenue Service Any time a cryptocurrency is used to pay for a purchase of any value, it constitutes a taxable event under existing legislation. If the cryptocurrency increased in value, even by a tiny fraction of a penny, a person would be required to pay capital gains taxes on the transaction to the Internal Revenue Service (IRS). According to the bill’s text, the new law aims to “amend the Internal Revenue Code of 1986 to exclude from gross income de minimis earnings from certain sales or exchanges of virtual currency, and...
