Tezos node operator Josh Jarrett sues IRS again over staking rewards tax rules

Tezos node operator Josh Jarrett is suing the IRS again, seeking to overturn its ruling that staking rewards should be taxed as income. Washington think tank Coin Center is assisting him in the lawsuit. Jarrett's new lawsuit filed Thursday seeks a permanent injunction prohibiting "the treatment of the Jarretts' tokens created as income." He and his co-plaintiff and spouse Jessica Jarrett are also seeking a refund of $12,179 in taxes paid by the IRS on 13,000 XTZ earned by the two in 2020. In 2021, Jarrett argued that the 8,876 XTZ earned as staking rewards in 2019 should be considered property rather than income, meaning they should be taxed when sold rather than when generated, and filed a refund lawsuit after paying the taxes, citing tax code sections 7421 and 7422. In 2022, the IRS attempted to dismiss the case and provide Jarrett with a $4,000 refund for the income taxes he paid on Tezos staking rewards. Jarrett refused the refund and continued to file a lawsuit, which was supported by several pro-crypto industry organizations, including the Proof of Stake Alliance and Coin Center. (The Block)