Tezos node operator Josh Jarrett sues IRS again over pledge reward tax rules

On October 11, Tezos node operator Josh Jarrett sued the Internal Revenue Service (IRS) again in an attempt to overturn its rule that pledge rewards should be taxed as income. The Coin Center, a Washington think tank, is assisting with its lawsuit. The new lawsuit, filed by Jarrett on Thursday, seeks to create a permanent injunction against “treating tokens created by Mr. and Mrs. Jarrett as income”. He and his co-plaintiff and spouse, Jessica Jarrett, are also seeking a refund from the IRS of $12,179 in taxes paid on the 13,000 XTZs the pair earned in 2020. In 2021, Jarrett argued that the 8,876 XTZs earned as a pledge award in 2019 should be considered property, not income, meaning they should be taxed at the time of sale, not at the time they were generated, and filed a refund lawsuit after paying the taxes, citing Tax Code 7421 and 7422. In 2022, the IRS attempted to dismiss the case, providing $4,000 to Jarrett a refund of $4,000 to reimburse him for the income taxes he paid on the Tezos Pledge Reward.Jarrett refused the refund and proceeded to file a lawsuit, supported by several pro-crypto industry organizations, including the Proof of Stake Alliance and the Coin Center.(The Block)