The IRS has determined that cryptocurrency staking is subject to taxation, as per a recent statement from WatcherGuru X. The IRS maintains that "income earned from cryptocurrency staking is subject to immediate taxation." This conclusion stems from an ongoing legal action brought against the IRS by Tezos (XTZ) network validator node operator (baker) Josh Jarrett. In October of last year, Jarrett filed a lawsuit contending that the current legal framework is inadequate because it mandates that token rewards be recorded as income.