Sponsor
Warren Davidson
Representative · R-OH
Representative · R-OH
The bill gives taxpayers a new way to settle federal tax obligations and creates a government Bitcoin reserve with transparency and custody rules — trading greater taxpayer payment flexibility and potential upside from crypto for significant price volatility, custody/security and fiscal-management risks, and new compliance burdens.
All taxpayers can pay federal tax liabilities (including penalties) directly with Bitcoin, creating a new payment option and greater flexibility in settling tax obligations.
Transfers of Bitcoin used to satisfy tax liabilities are not treated as taxable gains or losses up to the amount of the liability, reducing immediate capital-gains tax consequences for taxpayers who pay with crypto.
The Treasury can designate regulated U.S. financial institutions as agents to receive, convert, and remit Bitcoin, enabling practical handling and conversion to fiat for tax remittance and leveraging existing regulated infrastructure.
Taxpayers and the federal government would be exposed to substantial Bitcoin price volatility, creating uncertainty in the dollar value of tax revenues and taxpayer liabilities.
Holding and managing Bitcoin creates custodial, cybersecurity, and operational risks for the Treasury (and therefore taxpayers) unless very strong custody and incident-response capabilities are established and maintained.
Using Bitcoin receipts as a Strategic Reserve and valuing budget amounts in crypto could complicate federal budgeting, fiscal reporting, and predictability of funding, undermining fiscal management if USD-equivalent values swing widely.
Based on analysis of 3 sections of legislative text.
Allows taxpayers to pay federal taxes in Bitcoin, creates a Treasury Strategic Bitcoin Reserve to hold received Bitcoin under strict long‑term custody and disposal rules.
Official title: To allow Federal taxes to be paid in Bitcoin, and for other purposes.
Introduced November 20, 2025 by Warren Davidson · Last progress November 20, 2025
Allows federal tax liabilities to be paid in Bitcoin and creates a Treasury-managed Strategic Bitcoin Reserve to hold Bitcoin the government receives. It sets rules for how Bitcoin tax payments are made, valued, and treated for tax basis/gain purposes, permits the Treasury to use regulated financial agents to receive and convert Bitcoin, and limits future sales from the Reserve to small, long‑term disposals only. The bill adds a new Internal Revenue Code provision governing Bitcoin tax payments and establishes a custody, security, and reporting regime for a Strategic Bitcoin Reserve, including strict holding and disposal rules (no more than 1/20 of holdings sold in any year and each coin held at least 20 years).