Congress kills IRS rule tracking crypto sales, shielding traders from tax scrutiny
H.J.Res. 25 — Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales". · Filed by Mike Carey (R-OH) · 9 cosponsors · Introduced Jan 21, 2025 · Signed
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What it does
This resolution kills an IRS rule requiring brokers to report the gross proceeds from digital asset (cryptocurrency) sales to the tax agency. The rule was designed to improve tax compliance by giving the IRS visibility into crypto transactions. By disapproving it, Congress prevents brokers from having to file these reports, making it harder for the IRS to track and tax crypto income.
Why we flagged it
The bill's sole function is to block IRS reporting requirements for cryptocurrency brokers. It is a straightforward deregulatory measure that removes a compliance obligation and reduces tax agency visibility into a major asset class.
What the text implies
- Crypto exchanges and brokers avoid compliance costs and reporting infrastructure, but the IRS loses a primary data source for detecting unreported crypto income and capital gains.
- Individual crypto investors gain privacy from IRS scrutiny, but this asymmetrically benefits high-income traders and those with large holdings who can afford to manage tax exposure.
The full analysis lists 4 implications of this text.
Who stands to gain
cryptocurrency exchanges and brokers; high-net-worth crypto holders; digital asset trading platforms