Pro-crypto Republican Sens. Cynthia Lummis and Bernie Moreno say a tax provision could have unintended consequences for companies holding digital assets and have asked the Treasury Department to step in.

In a letter sent on Tuesday by the two lawmakers to Treasury Secretary Scott Bessent, Lummis and Moreno argued that the corporate alternative minimum tax alongside new accounting standards would create unfair taxes on unrealized gains. This, they said, could ultimately discourage U.S. investment.

"Failure to provide this clarity on unrealized gains in digital assets might require corporations to sell assets just to pay the tax, and it would disincentivize entities from maintaining large holdings of digital assets," the lawmakers said in the letter.

Lawmakers passed the Inflation Reduction Act in August 2022, which included a 15% Corporate Alternative Minimum Tax on firms whose average annual adjusted financial statement income exceeds $1 billion over any consecutive three-year period prior to the initial tax year, unless an exemption applies. At the time, people didn't think it would be relevant to digital assets, a person familiar said.

After the CAMT was put in place, the Financial Accounting Standards Board clarified that firms with digital assets on their balance sheets would be required to report their holdings mark-to-market, meaning assets' value is tied to the current market price, not the original price. This was a change firms like MicroStrategy had lobbied for, because prior to this accounting standard bitcoin was treated as an "indefinite-lived intangible asset" that would be marked with a permanent impairment loss if its price fell.

However, the new FASB policy combined with the CAMT liabilities created unintended consequences, Lummis and Moreno wrote. Namely, if a firm's bitcoin holdings appreciated, it looks good on paper, but creates a tax liability on their unrealized gains, the person familiar said. As a result, firms like Strategy — and lawmakers like Lummis and Moreno — are lobbying the IRS for exemptions to mitigate this potential burden, similar to those granted for unrealized stock gains held by companies like Berkshire Hathaway.

"While this accounting standard update was beneficial for the digital asset industry, because the standard affects a corporation's AFSI [adjusted financial statement income], corporations that own enough appreciated digital assets (or have enough other book income) to be subject to CAMT must now pay tax on unrealized gains in the value of those digital assets," they said.

Lummis and Moreno are asking for the Treasury to provide updated guidance for digital assets.

"We respectfully urge Treasury to act swiftly," they said. "By issuing interim guidance and ultimately adjusting the final rule, Treasury can prevent a harmful and unintended tax policy from taking hold — one that undermines fairness, distorts markets, and penalizes U.S. companies for adopting innovative financial strategies."

The Treasury Department did not respond to a request for comment.

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© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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