This resolution nullifies the IRS rule requiring brokers to report gross proceeds from digital asset sales.
Ted Cruz
Senator
TX
This joint resolution nullifies an Internal Revenue Service (IRS) rule concerning gross proceeds reporting by brokers involved in digital asset sales. By disapproving the rule, the resolution prevents the IRS from implementing new reporting requirements for digital asset transactions. This action effectively maintains the existing regulatory framework for brokers of digital assets.
| Party | Total Votes | Yes | No | Did Not Vote |
|---|---|---|---|---|
Democrat | 45 | 18 | 26 | 1 |
Independent | 2 | 1 | 1 | 0 |
Republican | 53 | 51 | 0 | 2 |
IRS Crypto Reporting Rule Nixed: Congressional Resolution Blocks New Broker Requirements
This joint resolution throws out a recently proposed IRS rule about how brokers need to report proceeds from digital asset sales. Specifically, it targets the "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales" rule (89 Fed. Reg. 106928), effectively killing it.
Scrapping the Rules
The core of this resolution is a straightforward disapproval. By invoking chapter 8 of title 5, United States Code, Congress is using its power to nullify the IRS rule. This means the reporting requirements for brokers handling digital assets, which were detailed in the now-disapproved IRS rule, won't go into effect. The resolution aims to prevent the IRS from enforcing these new reporting obligations on businesses that deal with digital assets like cryptocurrencies.
Real-World Ripple Effects
Without these reporting requirements, it becomes significantly harder for the IRS to track taxable income from digital asset transactions. Think of it like this: if you're a freelancer getting paid in Bitcoin, or a contractor swapping Ethereum for services, those transactions become a lot less visible to the tax authorities without mandatory broker reporting. This could make it easier for some to underreport or avoid paying taxes on digital asset gains. For instance, a day trader making frequent crypto trades might find it easier to not report every single transaction, and a small business accepting crypto payments might have less paperwork, but also less transparency for tax purposes.
The Bigger Picture: Challenges and Conflicts
This move raises some big questions about how we handle taxes in the rapidly evolving world of digital finance. It could potentially lead to a decrease in tax revenue, as tracking income from these kinds of transactions becomes more difficult. On the flip side, businesses that act as brokers for digital assets avoid the costs and hassle of complying with the new reporting rule. It's a classic case of balancing regulatory oversight with the burden of compliance, and this resolution tips the scales towards less regulation.