Coinbase’s tax vice president testified before Congress on June 9, advocating for simplified crypto tax rules. Lawrence Zlatkin argued that requiring capital gains calculations for stablecoin spending and small transactions creates excessive paperwork without meaningful revenue. He supported bills to reform taxation for staking, mining, and small purchases.
Coinbase has called on U.S. lawmakers to simplify cryptocurrency tax reporting for everyday users. The exchange’s vice president of tax, Lawrence Zlatkin, delivered testimony before the House Ways and Means Committee during a hearing on six digital asset tax bills.
Zlatkin stated that current rules force consumers to track minor gains on routine crypto transactions. He argued that stablecoins pegged to the U.S. dollar should be treated at par for tax purposes due to their designed one-to-one value.
The executive said calculating cost basis for stablecoin spending generates paperwork without significant tax revenue. He also supported a proposal to waive tax reporting on transaction fees, known as gas fees, of up to $10.
Furthermore, Zlatkin asked Congress to create a broader exemption for small cryptocurrency purchases. This would mean people making low-value transactions with assets like Bitcoin would not calculate taxable gains each time.
On mining and staking, Coinbase backed a bill that would let validators defer tax on block rewards until sale. “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 executive also addressed the application of wash-sale rules to cryptocurrencies. He noted the practical challenge of tracking violations across 24/7 global trading venues and self-custody wallets.
Zlatkin warned that forcing immediate compliance would lead to widespread reporting errors. He recommended an 18 to 24-month implementation period to allow necessary software infrastructure to be built first.
