Fidelity’s Senior Tax Counsel VP , Sarah Reilly, told lawmakers during a congressional hearing today that the crypto industry urgently needs tax rules that are clear, consistent, and easy to follow.
Speaking alongside Blockchain Association CEO Summer Mersinger at an ongoing House Ways & Means Subcommittee session, Reilly called attention to the challenges crypto investors and companies face under current tax law.
Fidelity VP Calls for Better Crypto Tax Rules
She pointed out that without proper guidance, individuals and institutions have no choice but to rely on outdated tax principles and vague internal IRS policies. According to her, these stopgap measures do not cover the full range of digital asset transactions. Reilly stressed that this confusion does more than create frustration; it causes real harm.
The Fidelity VP urged Congress to step in. Essentially, she said lawmakers must update parts of the tax code that touch on digital assets, like those on securities lending, mark-to-market elections, and U.S. trading safe harbors.
She also asked for new rules that specifically cover newer developments like staking and stablecoins. Reilly clarified that most tax laws in place today were written before crypto existed, so they don’t reflect how the market works now.
Her call for change comes as lawmakers consider a group of major crypto bills. These include the GENIUS Act, which would set rules for stablecoins; the CLARITY Act, which would define whether digital assets fall under securities or commodities law; and a bill that would block the Federal Reserve from launching a central bank digital currency.
Tax Policies Surrounding Crypto
While Congress debates these proposals, the IRS has already introduced stricter reporting rules. From April 15, 2025, every taxpayer who traded or earned crypto or NFTs in 2024 must report all transactions, even those worth only a few dollars. Those who don’t comply could face steep fines or even jail time.
Also, starting January 2025, crypto exchanges and brokers like Coinbase must send the IRS Form 1099-DIV, showing the gross proceeds from customer trades. The agency postponed rules mandating exchanges to report cost basis data until January 2026.
However, these rules don’t apply to decentralized platforms, which don’t hold users’ funds and often can’t access transaction data. Further, the IRS also changed how taxpayers must calculate their crypto cost basis, mandating that investors must track gains wallet by wallet, instead of using one combined method.
At the same time, some states are easing up on crypto taxes. For instance, Missouri has moved to scrap capital gains taxes on crypto, signaling a possible change toward friendlier tax policies at the state level.
Meanwhile, Congress continues its biggest push yet to regulate the broader crypto market. Though the House blocked the GENIUS Act in a procedural vote, pressure from President Trump has revived the bill, along with the CLARITY Act and the anti-CBDC proposal. Lawmakers expect to vote again today.
