The two leaders of the U.S. Senate Committee on Finance have asked the public for policy ideas regarding the taxation of digital assets.

“The rapid emergence of digital assets has raised novel regulatory issues, including the appropriate treatment under our federal tax law. The [tax code] draws distinctions between types of property, with no straightforward classification for digital assets.” U.S. Sens. Ron Wyden (D-Ore.), the committee’s chair, and Mike Crapo (R- Idaho), its ranking member, wrote in a statement. “This uncertainty creates complex reporting issues for taxpayers, and warrants examining how the [code] can provide clearer guidance for taxpayers on the treatment of digital asset transactions.

In their open letter to experts, stakeholders and interested parties, the senators raises questions to consider in the following categories under the relevant sections of the Internal Revenue Code (IRC):

▪ Marking-to-Market for Traders and Dealers (IRC Section 475);
▪ Trading Safe Harbor (IRC Section 864(b)(2));
▪ Treatment of Loans of Digital Assets (IRC Section 1058);
▪ Wash Sales (IRC Section 1091);
▪ Constructive Sales (IRC Section 1259);
▪ Timing and Source of Income Earned from Staking and Mining;
▪ Nonfunctional Currency (IRC Section 988(e));
▪ FATCA and FBAR Reporting (IRC Sections 6038D, 1471-1474, 6050I, and 31 U.S.C. Section 5311 et seq.); and
▪ Valuation and Substantiation (IRC Section 170).

Last month, the staff of the Joint Committee on Taxation issued a report on Selected Issues Regarding the Taxation of Digital Assets at the request of the two senators. The report was compiled to provide background on current law regarding such taxation. 

In addition to the senators’ outreach, U.S. Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) are expected to reintroduce the Responsible Financial Innovation Act soon,  Fortune reported. The bill intends to overhaul regulation of the cryptocurrency and stablecoin industry, Accounting Today reported.