Josh Jarrett, a Tezos blockchain staker, and his partner Jessica have filed a second lawsuit against the Internal Revenue Service (IRS) challenging the agency’s treatment of cryptocurrency block rewards as income. The couple argues that these rewards should be considered property and taxed upon sale, not immediately upon receipt.
This is the second time Jarrett has taken the IRS to court over this issue. In 2021, he successfully challenged the agency’s treatment of his 2019 Tezos block rewards, leading to a refund and the dismissal of the case.
In the new lawsuit, the Jarretts are seeking a permanent injunction that would force the IRS to treat block rewards as property. This would overturn the agency’s 2023 policy, which mandates that block rewards be treated as income when earned.
Coin Center, a cryptocurrency advocacy group, is supporting the Jarretts in their lawsuit. The group argues that the IRS’s current policy is unfair and could discourage individuals from using cryptocurrencies.
The lawsuit, comes as Congress is considering legislation to clarify the tax treatment of cryptocurrency block rewards. However, the outcome of this legislation is uncertain, making the Jarrett’s case even more significant.
The increasing number of lawsuits against regulators over crypto-related issues highlights the need for clearer guidelines and regulations in this rapidly evolving space.
October 2024, Cryptoniteuae
