From Talking Point to Traction in DC

Last week I was back in Washington. If you have been following along, you know the rhythm by now. Show up, bring real examples, sit across the table from the people writing the rules, and do the work of turning ideas into language. In our last update, I wrote about how conversations were moving from ideas to drafting. This trip took that a step further. One idea kept landing harder than anything else I brought into the room: a crypto voluntary disclosure program.

I have been talking about a VDP for months. In prior meetings, I raised the concept alongside other priorities, wash sales, de minimis, cost basis. People were interested, and the idea always landed well. But this trip it really got attention

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Why a VDP, and why now

Let me back up for anyone new here. Right now there are millions of Americans who hold or have traded crypto and have tax issues they do not know how to fix. Some missed reporting in years when guidance barely existed. Some have incomplete records because exchanges shut down or because DeFi activity does not produce a 1099. Some just did not know what they were supposed to do.

These are regular people who got into crypto early, made trades on platforms that did not send tax forms, and now feel stuck. I see this every day in my practice, and I have written about why taxes are the real fight for crypto, because when the rules are confusing or punitive, people stop trying to comply. The fear of stepping forward is real. People do not know what will happen, how far back the IRS will look, or how much it will cost. So they freeze.

A voluntary disclosure program gives those people a clear path back into compliance. You know the penalties up front. You know how far back they are going to look. The process rewards good faith instead of punishing it. The IRS gets revenue it is not currently collecting, and taxpayers get certainty they cannot currently find. That is a deal that works for everyone.

I have been making this case in DC since last year. This trip, the case started making itself.

What I heard across the board

I had meetings across both chambers last week, with Senate offices, House staff working on active legislation, and people close to the drafting process. A few things came through clearly no matter which room I was in.

First, crypto taxes are the next priority after market structure clarity is done. That was consistent everywhere and the interest is real, not hypothetical. The message I kept hearing was that we need to move fast while the attention is here. That means having proposals and language ready so we are not scrambling when the opportunity comes.

Second, Treasury can do some of this without waiting for Congress. More than one person told me that many of the changes we are pushing for are within the Treasury’s authority. That opens a second lane. Legislation is one path. Treasury guidance is another. We are pursuing both.

Third, and this is the one that surprised me, every office I walked into had a stronger reaction to the VDP than to anything else I raised. Wash sales, cost basis, de minimis - those are important and I will keep pushing on all of them. But the VDP was what got people leaning forward.

The moment it clicked

One of the Senate meetings was extremely fast paced. I talked about what I see on the ground, the current audit climate and the confusion among everyday taxpayers. I shared the same kinds of stories that our clients brought to Capitol Hill last fall. We talked about ways the IRS or Treasury provide some solutions.

Then I brought up the VDP.

The Senator’s whole demeanor shifted. Clarity is considered revenue neutral, but a crypto VDP could be revenue positive. That is a political win on top of a policy win. The Senator was excited to talk in detail about it.

Building the network

Beyond the VDP, the week produced something else that matters: new connections and deepening relationships. I got an offer to be introduced to IRS leadership. I was offered introductions to counterparts in offices I have not been able to reach yet. And I had a detailed walkthrough of the PARITY Act with the team that is drafting it, which is further along than most people realize.

None of that happens on a first visit. It happens because we have been doing this consistently, trip after trip, follow up after follow up, going back to our first meetings with Capitol Hill tax staffers and our meetings with Treasury officials. When staffers pull out notes from your last meeting before you sit down, that shows that our work is compounding.

Where this is going

In earlier posts I wrote about building relationships, earning trust, and developing ideas that are ready when the window opens. The VDP started as one item in a list of priorities. It is now getting traction. That did not happen by accident. It happened because we kept showing up and kept refining the idea.

I am preparing the materials that offices asked for. Several offices are independently moving in the same direction on this, and I am making sure they know what the others are doing.

A VDP can move through legislation or through the Treasury. It could attach to clarity, to the PARITY Act, or come through as an administrative action. I do not know yet which path gets there first. But the destination is the same: a real way for crypto taxpayers to get right with the IRS.

Every trip to DC builds on the last. The conversations get more specific, and the asks get more concrete. “Send us draft language” is a very different conversation than “tell us about your concerns.”

I will be at the Bitcoin conference soon and will continue these conversations in person. If you have been following this journey since ETHDenver or since the Senate hearing, you know this work is cumulative. If you have a crypto tax story, especially if you are someone who wants to comply but does not know how, send it my way. Those stories are the most effective tool I bring into any room in Washington.

Thanks for following along. More soon.