2025-03-12
The U.S. House of Representatives voted
to overturn an IRS tax rule that required certain crypto businesses to report
customer transactions.
The rule would have treated
decentralized finance (DeFi) platforms like traditional brokers, forcing them
to collect and report user data.
The repeal passed with strong
bipartisan support, with 291 House members voting in favor.
The resolution, led by Rep. Mike Carey
(R-Ohio) and Sen. Ted Cruz (R-Texas), was created to prevent the IRS from
enforcing the rule.
The House vote followed a previous
Senate vote, where 70 senators supported the repeal.
However, the Senate must vote on it
again before it reaches President Donald Trump, who is expected to sign it into
law.
Why Was the Rule Controversial?
The IRS rule, finalized in December
under the Biden administration, required DeFi businesses to report user
transactions using Form 1099.
Critics argued that this was nearly
impossible for decentralized platforms, as they don’t collect user information
like traditional brokers.
Many feared the rule would harm U.S.
crypto businesses and drive innovation overseas.
Rep. Jason Smith (R-Mo.) argued that
DeFi platforms cannot collect the necessary data, making the rule unworkable.
Rep. Carey warned that the rule would
hurt American businesses and tax revenues.
Support and Opposition
Most Republicans and some Democrats,
including Senate Minority Leader Chuck Schumer and Sen. John Fetterman,
supported the repeal.
However, some Democrats opposed it,
arguing that the rule was meant to ensure taxpayers report their earnings and
that repealing it could cost the government $4 billion in lost tax revenue.
Rep. Danny Davis (D-Ill.) and Rep.
Lloyd Doggett (D-Texas) opposed the repeal, saying it could benefit tax evaders
and criminals.
Next Steps
The resolution must pass the Senate
again before reaching Trump’s desk. If signed, it will prevent the IRS from
implementing a similar rule in the future.
