A legal case related to crypto is making its way through the US legal system and it is likely that no precedents will be set. A crypto staking community on Twitter was abuzz with activity last week when new reports suggested that a lawsuit against the IRS could mean a new precedent. This news related to staking rewards that were not sold could not be considered income and hence, taxed.
A few users on Twitter were jubilant that the IRS has settled with a Tennessee couple. The Jarretts – Jessica and Josh – sued the IRS for a tax refund. In 2019, they paid money for rewards related to Tezos staking. They got the refund and it seemed like a victory for stakers across the country.
Experts on tax and related policies were quick to comment on Twitter that some reports were misleading and could create confusion. This could result in risky decisions and cause problems with the IRS and taxes down the road.
The furore caused by this case last week was not the first time for a disagreement by the crypto community regarding taxes. Even experts find the whole crypto tax issue confusing. This problem has been exacerbated by the IRS’s refusal or reluctance to talk openly about it. There hasn’t been any guidance either. Investors and taxation professionals are trying to devise strategies to deal with the lack of guidance or certainty. The refund issued to the Jarretts is definitely not going to be a precedent for others to follow. Unless there is clarity, taxpayers have to wait in limbo.