Cryptocurrency, Legibility, and Taxation

22 Pages Posted: 3 May 2022

Date Written: April 27, 2022


In Jarrett v. United States, a taxpayer in Tennessee is arguing that staking cryptocurrency did not result in him earning “income” under federal income tax law. This case illustrates the fundamental challenge that cryptocurrency and blockchain technology present for tax law. Wealth creation in the crypto space is not readily legible to the state. This absence of legibility threatens tax law’s reliance on placing economic activities into categories to determine how they should be taxed. Furthermore, this case highlights the harms Congress and Treasury are risking by not taking action on cryptocurrency taxation. The uncertainty and lack of guidance on the appropriate taxation of cryptocurrency is opening the door for a critical juncture in tax law to be decided via strategic litigation. This threatens a jurisprudential evasion of the democratic and administrative process in a high-stakes moment for tax law.

Keywords: Taxation, Federal Income Taxation, Legislation, Cryptocurrency, Blockchain

JEL Classification: K34, K20

Suggested Citation

Parsons, Amanda, Cryptocurrency, Legibility, and Taxation (April 27, 2022). Available at SSRN: or

Amanda Parsons (Contact Author)

Columbia Law School ( email )

435 West 116th St
NEW YORK, NY 10027
2128542722 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics