A Nashville couple Filed a complaint in may of 2021 against the U.S. Government regarding a tax bill they had received from the IRS. The complaint issued by the Jarrett family stated that the 8,876 Tezos (XTZ) tokens they had accumulated through staking should not be classified as income.
Recently there has been a further update on this case, in which the IRS has said they will issue a refund to the couple. Following this news, some sources have stated that they believe this could set a precedent on whether crypto earned through staking and mining is considered income and therefore taxable.
Crypto tax specialist, TokenTax, released a statement via Twitter stating that they believe this was actually a one-off settlement that the IRS made and not an official court ruling. This is something often done in order to avoid setting a precedent.
However, Josh Jarrett actually declined this offer by the IRS saying that he believed there was no guarantee they wouldn’t try to tax him again if he agreed to settle, as opposed to getting an official ruling.
“Notably, [the DoJ’s tax department] stated on [a call with the legal firm] that the IRS has not yet processed any refund for the Jarretts. Therefore, the Jarretts reject the proffered refund and intend to continue vindicating their rights in court.” Josh’s lawyer stated in a letter to the department of justice.