California Lawyers Association – 2024 Washington D.C. Delegation – April 30, 2024 – May 1, 2024
Posted by Hochman Salkin Toscher Perez P.C. 
Posted on Thursday, May 02, 2024
We are pleased to announce that Jonathan Kalinski and Philipp Behrendt of our firm participated in the California Lawyers Association – Taxation Section’s Washington, D.C. Delegation on April 30 and May 1, 2024.
For over 30 years, the Taxation Section has annually selected a delegation to advocate for California tax lawyers’ ideas and proposals to officials in Washington, D.C. This opportunity allows tax practitioners to present significant issues to key tax officials and staff members from various government offices.
This year, our firm presented a paper addressing two fundamental cryptocurrency activities: liquidity staking and wrapping. The paper advocates that neither activity constitutes a taxable event. It proposes that the IRS issue guidance classifying the receipt and redemption of liquidity staking tokens and wrapping tokens in general as non-taxable.
Finally, the paper seeks clarification on the tax treatment of staking rewards, touching on Revenue Ruling 2023-14 and the applicability of the constructive receipt doctrine of tokens received by a staking pool. It proposes guidance that the concept of constructive receipt does not apply to staking rewards received through pool staking. Additionally, the paper suggests that legislators could address this issue by enacting a rule to defer the recognition of income from staking rewards until the sale or other disposition of the rewards received.
Jonathan and Philipp met with representatives from the IRS Office of Chief Counsel, the Joint Committee on Taxation, Senate Finance Committee, Treasury Department, and the Department of Justice Tax Division.
The proposals aim to provide standardized and clear tax guidance for common cryptocurrency transactions. We thank Natascha Fastabend, Jackie Zumaeta, Myriam Bouaziz, Troy Van Dongen, and Amy Spivey, for the successful delegation and this valuable opportunity to engage with tax authorities on these important issues. Our firm is continuing efforts to advocate for fair tax positions in complex areas, such as financial dealings in cryptocurrency.
Jonathan Kalinski is a principal at Hochman Salkin Toscher Perez P.C. and specializes in both civil and criminal tax controversies as well as sensitive tax matters including disclosures of previously undeclared interests in foreign financial accounts and assets and provides tax advice to taxpayers and their advisors throughout the world. He handles both Federal and state tax matters involving individuals, corporations, partnerships, limited liability companies, and trusts and estates.
Philipp Behrendt is an Associate at Hochman Salkin Toscher Perez P.C., licensed in California as well as in Germany and assists in advising clients in civil and criminal tax controversies as well as international money laundering investigations stemming from tax avoidance structures. He also focuses on the technical aspects involved in advising voluntary disclosures in connection with DeFis, NFTs, and other crypto assets.
Philipp regularly speaks and blogs about the taxation of digital assets, as seen in his recent blog about the Form 1099-DA draft (Link) and also quoted in Tax Notes about tax consequences of 51% attacks (Link).
