The IRS dismissed a lawsuit filed by two Tezos stakers on Monday, claiming that the agency has already returned just under $4,000 in taxes plus interest. In 2021, Joshua and Jessica Jarrett filed a lawsuit against the IRS, claiming that they should not have had to pay income tax on Tezos tokens earned through investment on the network. The IRS gave the refund in December to the couple, but they declined it in order to force a federal court to rule on whether the IRS can tax crypto obtained through investment as income.
The IRS stated the Jarretts couldn’t refuse the refund and that the case should be dismissed in a motion to and a 12-page memorandum of law submitted earlier this week. The Proof of Stake Alliance has contributed to the Jarretts’ case (POSA).
“Despite getting all of the alleviation looked for in their Complaint, the Jarretts feel this is as yet a ‘live’ issue or debate in light of the fact that the Court has not yet resolved whether marking grants are available as pay when gotten.” “They contend in their letter that to ‘justify their privileges,’ they could basically decline the refund for which they sued,” as per the request. “Basically, the Jarretts say that they can keep this action going in order to push the US to clarify why it issued the refund and then get an advisory opinion from the Court on those reasons.” “That’s not the case.”
As per the filing, the IRS intends the plaintiffs to oppose the IRS’s move to dismiss, but neither of the possible exceptions would apply, referring to how tax and tax refund matters are handled in the United States.
“Even if the Jarretts file future refund hold based on the premise that staking awards are not taxable income when received, the argument would be ‘at most a comparable one.'” That is insufficient. “And because this is the Jarretts’ first claim to seek a refund after paying tax on the receipt of Tezos awards tokens, the Jarretts cannot demonstrate numerous cases avoiding review,” according to the document.The memo said.
The IRS stated that “nothing remains to be decided,” and that the refund was “not an offer.”