Republican lawmakers led by Senator Lummis formally petitioned the US Treasury to revise how taxes apply to digital asset companies.
Senator Lummis, one of the Senate’s most vocal proponents of digital assets, along with other Republican lawmakers, are making a case for digital asset companies being taxed unfairly.
Sen. Lummis moves against Bidn-era tax burden
On May 12, 2025, a coalition of Republican senators led by Senator Cynthia Lummis wrote a petition to the US Treasury asking that it revise how the Corporate Alternative Minimum Tax (CAMT) applies to digital asset companies.
In a letter addressed to Treasury Secretary Scott Bessent, the senators urged action to prevent a major threat to US innovation and competitiveness in the digital asset industry.
The petition specifically targets the unintended consequences of the clashing accounting standard, ASU 2023-08 and the CAMT provision of the Inflation Reduction Act which was signed into law by President Biden in 2022.
CAMT imposes a 15% minimum tax on corporations averaging at least $1B in adjusted financial statement income (AFSI) over a three-year period. These laws clash with each other because of how AFSI is calculated.
AFSI is based on Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), both of which are not tailored for tax policy.
Senator Lummis, along with other Republican lawmakers, warned that the new tax framework that requires corporations to pay taxes on unrealized gains in digital assets will force corporations to pay taxes on potential profits they haven’t actually received.
These potential profits result from the fair value accounting method recently adopted by the Financial Accounting Standards Board (FASB). The board’s standards affect AFSI but are not designed to influence tax liability.
“This is an issue of fundamental fairness and economic common sense,” the letter read. “Neither Congress nor FASB intended for corporations to be taxed on unrealized digital asset gains. This is a textbook case of regulatory overreach through unintended consequences.”
The letter argues that this tax burden could force US corporations to sell their digital assets simply to meet their tax obligations.
According to the senators, such an action would stifle innovation, discourage investment, and put American companies at a disadvantage compared to foreign competitors, whose accounting standards do not require mark-to-market valuation of digital assets.
Republican senators push solution proposals
To correct this tax burden, the senators urge the Treasury to exercise its authority to adjust the CAMT framework. The senators suggest that the Treasury adjust the definition of AFSI to exclude all unrealized gains and losses from corporate digital asset holdings.
They also suggest that the Treasury could make a targeted exemption to exclude only unrealized gains or losses arising from the application of ASU 2023-08.
The senators also drew attention to an earlier precedent: the IRS’s own 2023 Notice, Notice 2023-20, which provided temporary relief for the insurance industry to avoid harsh consequences from the application of CAMT.
“We are not asking for special treatment,” the letter emphasizes. “We are asking for equitable treatment and the preservation of market functionality. If we fail to act, we risk ceding leadership in the next era of global finance.”
The petition stresses that, under current rules, US companies could be penalized simply for complying with local accounting standards, while their foreign peers get to enjoy a more favorable treatment.
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