TITLE: US Digital Assets Tax: ADAPT Act, Form 5472 Deadline and What Overseas Sellers Must Do Before 9 November 2026
Congress has left Washington, and the Senate will not return until after the November midterm elections. That pause gives international sellers a short period of certainty: no federal tax legislation can pass between now and 9 November 2026. However, a new digital assets tax bill is waiting for lawmakers when they return.
Here is what you should monitor now, including the immediate Form 5472 deadline and other compliance actions.
What happened this week? Track the bill, not the headlines
The Senate adjourned late on 30 September 2026. The House adjourned earlier in September. Congress is currently scheduled to return on 9 November 2026.
Before leaving, Senate Finance Committee member Steve Daines introduced the Aligning Digital Assets with Principles of Taxation Act, known as the ADAPT Act. The proposal is S. 5616 and runs to 56 pages.
The bill mirrors the House Digital Asset Tax Certainty Act, H.R. 10357, which the House Ways and Means Committee approved on 16 September.
For now, your existing 2026 filing position does not change. The ADAPT Act is a proposal, not law.
What the ADAPT Act would change, and what it would not
The bill would modernise federal tax rules for digital assets. If enacted, it would introduce:
- A de minimis rule so smaller cryptocurrency transactions may not trigger recognised gains or losses.
- Mark-to-market accounting rules for digital asset brokers and dealers.
- A safe harbour that could allow digital assets to qualify for rules supporting foreign investment in US markets.
- Streamlined rules for charitable contributions of digital assets.
- Wash sale and constructive sale rules for digital assets.
These provisions could make crypto tax reporting for international sellers more predictable. They could also create new record-keeping requirements for businesses, founders, brokers and investors.
Do not change your current reporting approach based only on the bill. Wait for enacted legislation, effective dates and IRS instructions.
Why overseas sellers should care about digital assets tax
Check where validation income is sourced
The proposed source rules would treat income from digital asset validation activities (including staking, mining and similar activities) as:
- US-source income when derived by a US person.
- Foreign-source income when derived by a foreign person.
Consider an overseas founder of a US LLC who earns staking rewards personally or through a business structure. If enacted, the rule could provide a clearer framework for characterising those rewards. It would not remove the need to identify the correct taxpayer, maintain transaction records or review the entity’s existing US reporting obligations.
Keep records showing:
- Who performed the validation activity.
- Which wallet or account received the rewards.
- The date and value of each reward.
- Whether the activity was personal or connected to the business.
- The person’s US tax status during the relevant period.
Monitor the US trade or business question
The proposed trade-or-business safe harbour would cover foreign persons trading stocks, securities or commodities through US brokers or for their own account. It would provide protection from being treated as engaged in a US trade or business involving traded digital assets.
This matters because overseas founders and investors already monitor the engaged in a US trade or business, or ETBUS, question when considering potential 1040-NR or 1120-F filing obligations.
A non-US investor trading digital assets through a US broker may benefit from the proposed safe harbour if it becomes law. But the proposal does not automatically decide the position for an Amazon FBA seller.
An overseas Amazon FBA seller with inventory stored in a US fulfilment centre must still review the wider facts. Inventory location, business activity, agency arrangements and treaty positions can all matter. The latest OECD Model Tax Convention, released on 30 September with the November 2025 updates incorporated, is relevant context for permanent establishment, business profits and storage-exception arguments. It does not replace the applicable US treaty or determine your position automatically.
Your action list before 9 November
Use the congressional pause to complete practical compliance work.
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File Form 5472 by 15 October if you extended.
A 25%-or-more foreign-owned US single-member LLC or foreign-owned disregarded entity that filed Form 7004 must file Form 5472 with a pro forma Form 1120 by 15 October 2026. The minimum penalty for failing to file is USD 25,000 per year, with possible additional penalties for continued failure. Review the IRS Form 5472 instructions. -
Prepare Form 720 for 2 November.
The third-quarter 2026 Form 720 is due 2 November 2026. This includes the 1% remittance transfer excise tax deposits where applicable. Penalty relief under Notice 2026-52 remains available until final regulations are issued, subject to the notice’s conditions. Check the IRS Form 720 instructions. -
Reconcile all digital asset activity.
Match wallets, exchanges, payment processors and accounting records. Separate sales, swaps, staking, mining, fees and transfers. This will reduce errors if Congress enacts forward-looking or retroactive rules. -
Review your US trade or business facts.
Document your US inventory, fulfilment arrangements, brokers, agents, employees and operational activity. This helps you assess potential 1040-NR, 1120-F or related reporting requirements. -
Strengthen your security controls.
The IRS’s Cybersecurity Awareness Month reminder reinforces the need to protect tax data. Encrypt records, activate multi-factor authentication on QuickBooks, Xero and Amazon Seller Central, and maintain a written information security plan.
Frequently asked questions
Is the ADAPT Act law?
No. It is a proposed bill. It does not currently change your 2026 digital asset tax reporting or filing obligations.
Can Congress change the rules before 9 November?
Congress is currently scheduled to return on 9 November. No federal tax legislation can pass during the adjournment window, so rules not already enacted cannot change your filing position before then.
Does using a US broker automatically create a US trade or business?
No. The proposed safe harbour is not law, and using a US broker does not automatically resolve every ETBUS question. Your trading activity, business structure and other US connections still matter.
Does storing Amazon inventory in the US automatically create a permanent establishment?
No. The result depends on the facts, applicable treaty and domestic rules. Review your fulfilment arrangements and keep evidence supporting your position.
Keep your compliance ready for the next session
Use this period to complete filings, reconcile digital asset records and document your cross-border operations. When Congress returns on 9 November, the ADAPT Act may move quickly, and sellers who have already organised their records will be better positioned to respond.
