Coinbase’s vice president of tax, Lawrence Zlatkin, testified before the House Ways and Means Committee on June 9, urging lawmakers to stop requiring Americans to calculate capital gains every time they spend a stablecoin or pay a blockchain transaction fee.
His testimony took place during a hearing on six standalone bills intended to modernize how the U.S. tax code treats digital assets, addressing issues from mining and staking taxation to charitable donations and broker reporting requirements.
Coinbase Presses for Simpler Crypto Tax Rules
Ahead of the hearing, the House Ways and Means Committee said it would evaluate legislation aimed at bringing “clarity, parity, and administrability” to digital assets. Representing Coinbase, Zlatkin told legislators that the current rules force consumers to track small gains and losses on routine transactions involving cryptocurrency.
Zlatkin argued that federally regulated stablecoins pegged to the U.S. dollar should be treated equally for tax purposes because they are designed to maintain a one-to-one value with the dollar. He said requiring users to calculate cost basis every time they spend a stablecoin creates paperwork burdens without producing meaningful tax revenue. He also supported a proposal from Congressman Rudy Yakym to waive tax reporting on gas fees up to $10.
Coinbase urged Congress to adopt a broader de minimis exemption for small crypto purchases. Under the company’s proposal, low-value transactions in Bitcoin (BTC) or other non-stablecoin cryptocurrencies would not require taxpayers to compute gains each time they make a purchase.
Earlier this year, Coinbase CEO Brian Armstrong faced accusations that he lobbied against a Bitcoin de minimis tax exemption; he denied the claims as “totally false” and said he had actively supported a BTC de minimis rule.
On mining and staking, Coinbase backed legislation introduced by Congressman Mike Carey that would allow validators to defer taxation on block rewards until the assets are sold, rather than taxing them when received.
“A farmer is never taxed when a bushel of wheat sprouts from the ground; they are taxed when they harvest that crop, bring it to market, and execute a sale,” Zlatkin explained.
The Wash-Sale Question
Zlatkin also reiterated Coinbase’s position on wash-sale rules, which prohibit investors from claiming a tax loss if they repurchase the same asset within 30 days of selling it.
While Coinbase has long supported applying wash-sale rules to crypto, the company highlighted a practical challenge: crypto trades occur around the clock across exchanges, liquidity pools, and self-custody wallets, and there is currently no unified data architecture to track wash-sale violations across that fragmented environment in real time.
He recommended that, if wash-sale rules are extended to digital assets, lawmakers provide an implementation period of at least 18 to 24 months to allow the necessary software infrastructure to be developed. Zlatkin warned that immediate enforcement would likely cause widespread reporting errors and trigger a surge of IRS audits.