An American couple has rejected a refund from the Internal Revenue Service (IRS) after the agency taxed them for staking their Tezos (XTZ).

In declining the IRS’ refund, the couple hopes to force the government provide clarity on taxes relating to crypto staking.

Josh and Jessica Jarrett of Nashville, Tennessee, were first offered the refund in December of last year from their Tezos stake which began in 2019, according to a court filing.

Josh Jarrett said that it appeared the government “didn’t want to defend the position” that tokens generated through staking are considered taxable income.

“At first glance, this seemed like great news,” Josh Jarrett said. “But until the case receives an official ruling from a court, there will be nothing to prevent the IRS from challenging me again on this issue. I need a better answer.”

Image via Shutterstock

With most of the crypto space in need of both regulatory and tax clarity, many investors will be looking at the case as possible evidence that moving forward, the IRS won’t be taxing tokens generated through staking until it gets sold.

The Proof of Stake Alliance (POSA), a crypto advocacy group, said in a statement that they supported the Jarretts’ decision because it could give millions of other crypto investors long sought after clarity on staking-related taxes.

“POSA, and the broad coalition it represents, applauds Jarrett’s decision to continue his lawsuit. He has rejected the IRS’s offer of a refund, opening up the possibility of a court ruling that will give him, and millions of other taxpayers in the same position, the ability to confidently plan for the future. The importance of this issue has been raised by many, including Coin Center, the Blockchain Association, and several Members of Congress.”

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