**Tezos Stakers Sue IRS Over Token Taxation**

Josh and Jessica Jarrett are taking the IRS to court again over how their Tezos staking rewards are taxed. Filed on October 10 in Tennessee, their complaint argues that tokens created through staking should be taxed only when sold, not when created. They liken staking rewards to a farmer's crops or an author's manuscript, which aren't taxed until sold.

The IRS currently treats staking rewards as income upon creation, taxing them based on their market value at that moment. The Jarretts seek a refund of $12,179 for taxes paid on 13,000 Tezos tokens earned in 2020 and a permanent injunction against this tax treatment.

Supported by Coin Center, the Jarretts' legal battle aims to change how staking rewards are taxed, potentially impacting all proof-of-stake chains. Their fight began in 2021 and continues despite previous setbacks, including a dismissed case and a rejected $4,000 refund offer from the IRS.