Following the procedural setback of the CLARITY Act in the Senate, the center of gravity in US digital asset legislation has quickly shifted toward taxation, with H.R. 10357, the "Digital Asset Tax Certainty Act," emerging as the current focal point.

The bill, which addresses tax compliance issues within the Internal Revenue Service (IRS) regulatory framework, aims to resolve specific operational challenges in taxing digital assets, marking a turning point in the legislative process from jurisdictional disputes to substantive tax structure construction. The proposal shows notable bipartisan characteristics, introduced on September 14 by House Ways and Means Committee Chairman Jason Smith, a Republican from Missouri. Co-sponsors include Jodey Arrington, Aaron Bean, Mike Carey, Steven Horsford, Mike Kelly, David Kustoff, Max Miller, and Rudy Yakym. Among them, Pennsylvania Republican Mike Kelly, who chairs the Ways and Means Subcommittee on Tax, had previously pushed for digital asset charitable contribution provisions that were incorporated into the bill, allowing eligible donations to apply simplified tax procedures. Nevada Democrat Steven Horsford, the sole Democratic co-sponsor, had deeper involvement; as early as May 2026, he and Max Miller introduced H.R. 8899, the "Digital Asset PARITY Act," which covered stablecoins, digital asset lending, wash sale rules, mark-to-market taxation, mining and staking rewards, charitable donations, and investment trusts. H.R. 10357 absorbs some of those policy directions but does not fully adopt its entire design.

The legislative process achieved a key breakthrough at the committee level. On September 16, the House Ways and Means Committee passed the bill by a vote of 38 to 5, sending it to the full House for consideration. Even if the House passes it, the bill must still undergo Senate review and be signed by the President before taking effect, indicating that legislative uncertainty remains. However, the committee's decisive vote provides a solid foundation for subsequent procedures.

One core provision focuses on exemptions for small network fees and limits on applicability. The IRS currently treats digital assets as property, meaning paying a fee constitutes a disposal of assets and requires calculating gains or losses. H.R. 10357 proposes that when using digital assets to pay blockchain network fees of no more than $10, or eligible brokerage, transaction, or liquidity fees, the associated gains or losses would not be included in taxable results. Notably, the $10 threshold applies only to network fees and transaction fees, not to the purchase amount of goods or services. Professional traders, broker-dealers, digital asset dealers, service providers processing transactions in bulk on behalf of others, and entities with more than 5,000 digital asset transfers in the prior year are generally ineligible for this exemption. The provision is set to apply to disposals occurring after December 31, 2027, aiming to reduce compliance burdens for ordinary users.

Another central provision creates a simplified accounting method for widely traded assets. The bill allows taxpayers to voluntarily elect simplified accounting for eligible "widely traded digital assets," replacing the need to track costs transaction-by-transaction, though US dollar stablecoins are not eligible for this regime. Once elected, annual gains or losses for the same asset type are calculated using a unified formula: total annual disposal proceeds plus the fair market value of assets held at year-end, compared against acquisition costs during the year, prior year-end asset values, and adjustments, with the difference recorded as gain or loss. Under this system, individual disposals during the year are no longer recognized separately. The trade-off is that gains or losses are uniformly treated as short-term capital items, and the election, once made, cannot be revoked during the first five tax years. The rules are proposed to apply to tax years beginning after December 31, 2027. Data compiled by Woofun AI indicates this mechanism would significantly reduce accounting complexity for high-frequency traders.

For qualified US dollar stablecoins, the bill establishes dedicated tax calculation rules. Tax basis and transaction value would be determined based on the redemption value in US dollars promised by the issuer. If the purchase, sale, or exchange value remains near the redemption value, taxpayers would not need to recognize gains or losses from minimal price differences, with thresholds such as 99.5% and 100.5% established for judgment. Eligible stablecoins must be issued by licensed payment stablecoin issuers under the GENIUS Act, or by qualified foreign issuers registered in the US, with the Treasury Department required to publish an updated list. Dealers, broker-dealers, high-frequency traders, taxpayers using a non-dollar functional currency, and related-party transactions would face additional restrictions. These rules are proposed to apply to tax years beginning after December 31, 2026, providing clear tax expectations for the stablecoin ecosystem.

The bill also extends certain traditional financial rules to digital assets and strengthens anti-avoidance mechanisms. Eligible digital asset lending could qualify for rules that defer gain or loss recognition, subject to conditions such as returning identical assets. Dealers and professional traders may elect mark-to-market taxation. Foreign investors trading through US brokers could access a safe harbor. Donations of qualified stablecoins or widely traded assets could waive certain qualified appraisal requirements. For other digital assets, direct donations cannot claim charitable deductions, but taxpayers could first sell assets into qualified stablecoins and then donate, with eligible disposal gains excluded from taxable capital gains. Additionally, the wash sale rules under IRC Section 1091 are extended to digital assets: if an investor sells at a loss and acquires substantially identical assets (such as bitcoin, contracts, options, or economically equivalent tokenized assets) within 30 days before or after, the loss cannot be immediately deducted and is added to the cost basis of the replacement assets. Constructive sale rules are also introduced to prevent taxpayers from locking in gains through hedging positions like short sales or forward contracts while deferring tax, with corresponding adjustments for foreign corporations and US territories.

The nature of mining and staking income is clarified, though the timing of recognition remains unresolved. The bill categorizes such income as "digital asset validation support activity income," explicitly treating it as ordinary income. For US residents, related income is generally treated as US-source; for non-residents, it is treated as foreign-source unless conducted through a fixed place of business, in which case the location determines the treatment. For investment trusts, merely staking or receiving rewards would not automatically cause loss of trust tax status, but actively operating a validation business would negate this protection. Broker reporting rules are adjusted accordingly: eligible stablecoins no longer require transaction-by-transaction reporting, and assets electing simplified accounting can be reported by category, summarizing transactions, net gains or losses, and fair market value. Furthermore, the bill requires the Treasury Department to establish a voluntary disclosure program within 12 months of enactment. Taxpayers could file within 24 months of the program's establishment to pay back taxes, interest, and penalties, and upon remediation, could receive civil penalty relief, with disclosed information not used for specific criminal investigations. The Treasury would also study using zero-knowledge proofs, smart contracts, and other technologies to enhance compliance efficiency.

The bill also incorporates the FULL HOUSE Act provisions, aiming to restore full deductibility of gambling losses. Under current rules beginning in 2026, deductions are limited to 90% of losses and capped at income—for example, a taxpayer winning $100,000 but losing $100,000 could only deduct $90,000, resulting in $10,000 of taxable income. The new bill seeks to repeal this change.

The policy significance of H.R. 10357 lies in building a symmetric system rather than simply cutting taxes. It attempts to reduce compliance costs with no real economic substance, grant digital assets some of the treatment afforded to traditional financial assets, and introduce anti-avoidance rules to close loopholes. Although the House Ways and Means Committee has passed the bill, the text could still change during full House and Senate deliberations, and final enactment will require time to materialize. This represents another key attempt by Congress to establish a clear legal framework for digital assets following the CLARITY Act setback, and its outcome will directly influence compliance trends across the global crypto market.