Congress kills IRS crypto reporting rule, shielding traders from tax scrutiny
S.J.Res. 3 — A joint resolution 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 Ted Cruz (R-TX) · 14 cosponsors · Introduced Jan 21, 2025 · Passed chamber
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What it does
This resolution kills an IRS rule requiring cryptocurrency brokers to report the gross proceeds of digital asset 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 an IRS reporting requirement for cryptocurrency brokers. It is a Congressional Review Act disapproval resolution that removes a tax-administration mechanism without replacing it, effectively narrowing the IRS's enforcement reach on a specific asset class.
What the text implies
- Crypto investors gain a compliance advantage over other asset classes (stocks, bonds, real estate) where brokers already report proceeds to the IRS, creating unequal tax-enforcement pressure across income types.
- The IRS will have reduced ability to cross-reference broker reports with individual tax returns for crypto transactions, lowering detection of underreported gains and incentivizing non-compliance.
The full analysis lists 3 implications of this text.
Who stands to gain
cryptocurrency brokers and exchanges; crypto investors and traders; digital asset trading platforms