A new lawsuit has been added to the recent lawsuits filed in the cryptocurrency sector. Accordingly, the Tezos (XTZ) node operator has filed a lawsuit against the IRS again.
Tezos (XTZ) Validator Josh Jarrett Is Not Giving Up!
Josh Jarrett, a validator node operator on the Tezos (XTZ) network, has filed a lawsuit against the IRS, The Block reported.
Josh Jarrett has stated that he opposes the US IRS’ tax policy on cryptocurrency staking rewards, claiming that there is a problem with the current law that requires staking rewards to be reported as income.
Jarrett also argues that staking rewards should be treated as property rather than income, and that these tokens should only be taxed at the time of sale, not before.
Jarrett also filed a motion seeking a refund of $12,179 in taxes paid by his wife, Jessica Jarrett, on $13,000 in XTZs she earned in 2020.
“Staking tokens involves creating ‘new property’ that no one has owned before. Therefore, the new property is not taxable income.
Instead, the taxable income should be the income from the sale of that new property.”
According to its guidance, which was released in 2023, the IRS states that block rewards, such as staking, are “income” when they are generated and taxes must be paid on the estimated market value of the tokens when earned.
The lawsuit filed by Josh Jarrett is supported by Coin Center, a non-profit organization that researches cryptocurrencies.
He had filed a lawsuit before!
Jarrett filed a lawsuit against the IRS in 2021 over his 2019 tax bill, but that lawsuit was dismissed in early 2024.
In 2021, Jarrett requested a refund of taxes paid on XTZs he did not sell, claiming that the 8,876 Tezos tokens earned as staking rewards in 2019 should be treated as property and not income.
Jarrett did not sell the XTZs he earned in 2019, but he paid taxes on these XTZs to the IRS.
In 2022, the IRS offered Jarrett a $4,000 tax refund for the $9,407 in taxes he paid on Tezos staking rewards. However, Jarrett declined the refund in order to continue his lawsuit. As a result, Jarrett continued his lawsuit, but the court dismissed the case entirely.
XTZ, which has gained 2.1% in the last 24 hours, continues to trade at $0.66 at the time of writing.
*This is not investment advice.
