Congress Vetoes IRS Crypto Reporting Rule: Digital Asset Brokers Get a Reprieve on Gross Proceeds Reporting

This Joint Resolution is essentially Congress telling the IRS, “Hold up, we’re hitting the brakes on that new crypto reporting rule.” Specifically, this bill uses the Congressional Review Act (CRA) mechanism to formally disapprove of the rule the IRS issued concerning the reporting of gross proceeds from digital asset sales. Because Congress is vetoing this rule, the specific regulation—which would have required brokers to start reporting the total money received from digital asset transactions—will not go into effect. This is a direct, procedural shutdown of a proposed administrative rule.

The Digital Asset Reporting Showdown

For the average person, this sounds like bureaucratic noise, but if you’ve ever traded crypto, run a crypto exchange, or even just used a service that facilitates digital asset transactions, this matters. The IRS rule was aimed at increasing tax compliance by requiring brokers (think Coinbase, Kraken, or even certain DeFi platforms, depending on how the IRS defined 'broker') to report the total sales price of your digital assets. This bill stops that requirement cold. The immediate impact is that digital asset brokers who were gearing up to implement these new reporting systems—which often involves significant compliance costs and system overhauls—now don't have to. It gives the industry a breather from what some considered an overly complex or burdensome new reporting requirement.

Who Wins and Who Loses?

When Congress uses the CRA to block a rule, it’s a clear message that the legislative branch believes the executive agency (in this case, the IRS) overstepped or created a bad policy. The immediate beneficiaries are the digital asset brokers and exchanges themselves. They avoid the cost and complexity of building out the systems needed to track and report gross proceeds to the IRS. For the individual investor, the reporting requirements haven't changed yet, meaning you still need to track your gains and losses, but your broker won't be sending that specific 'gross proceeds' information to the tax agency—at least not under this nullified rule.

On the flip side, the IRS is effectively shut down in its attempt to close a perceived tax gap in the digital asset space. The whole point of the rule was to make it easier for the IRS to track transactions and ensure people were paying taxes on their crypto gains. By striking down the rule, Congress leaves that gap open, creating continued regulatory uncertainty about how digital asset transactions should be reported. While this provides temporary relief to the industry, it doesn't solve the underlying problem of needing clear, workable tax reporting standards for an increasingly complex asset class.