6 versions

CosmeticWhat changed in PUBLIC LAWcompared with ENROLLED BILL

Technical corrections only. v6 updates the document status from an enrolled joint resolution to a Public Law, adding the approval date and legislative history. There are no substantive changes to the text of the resolution itself.

H.J.Res. 25119th CongressIntroduced Jan 21, 2025

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".

Became Public LawTaxationSubstantive

View bill text

Sponsor: Rep. Carey, Mike [R-OH-15]
Committees: Ways and Means Committee (primary)
Last action: Apr 10, 2025

Bottom line

Congress has blocked an IRS rule that would have required brokers to report gross proceeds from digital asset sales, preventing new reporting obligations for the industry.

What it actually does

This joint resolution formally disapproves a specific rule proposed by the Internal Revenue Service (IRS) concerning the reporting of gross proceeds by brokers involved in digital asset sales. By passing this resolution, Congress prevents the IRS rule, which would have mandated new reporting requirements for digital asset brokers, from taking effect, thereby maintaining the existing reporting framework for these transactions.

Proponents argue

Supporters of this resolution argue that the IRS rule constituted an overreach of regulatory authority, imposing burdensome and potentially premature reporting requirements on the nascent digital asset market. They contend that blocking the rule protects the privacy of digital asset users and fosters innovation by preventing regulations that could stifle growth and competitiveness in the rapidly evolving digital economy.

Opponents contend

Opponents of the resolution (and proponents of the IRS rule) assert that the rule was a necessary measure to ensure tax compliance and prevent tax evasion in the digital asset space. They argue that without third-party reporting from brokers, the IRS lacks critical data to accurately assess and collect taxes on digital asset transactions, creating an unfair advantage for digital assets compared to traditional financial instruments.

The bill is exceptionally short and clear, allowing for immediate understanding of its core action.

Section 1

Congressional Disapproval of IRS Digital Asset Reporting Rule

prominently featuredstraightforward

This provision explicitly states that Congress disapproves of the rule submitted by the Internal Revenue Service (IRS) relating to "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales" (89 Fed. Reg. 106928 (December 30, 2024)). As a direct consequence of this congressional action, the specified IRS rule is rendered null and void, meaning it will not be implemented and will have no legal force or effect.

GroupImpactMechanismScale

GroupDigital Asset BrokersImpactRelieved of new reporting burdensMechanismDisapproval of IRS rule eliminates new compliance requirementsScaleNationwide, affecting all entities defined as brokers under the proposed rule.

GroupDigital Asset Holders/TradersImpactMaintain current reporting obligations, potential privacy implicationsMechanismIRS rule not implemented, so no new third-party reporting to IRS on gross proceedsScaleMillions of individuals and entities engaging in digital asset transactions.

GroupInternal Revenue Service (IRS)ImpactLoss of new data source for tax complianceMechanismCongressional disapproval prevents implementation of the rule, hindering data collection effortsScaleImpacts IRS's ability to monitor and enforce tax compliance in the digital asset market.

Supporters argue

Supporters argue this provision protects the digital asset industry from premature or overly broad regulation that could stifle innovation and growth. They contend that the IRS rule imposed an undue burden on brokers and raised privacy concerns for individuals engaging in digital asset transactions, and that Congress is acting to prevent executive overreach by an agency.

Critics contend

Opponents argue that blocking this rule creates a significant loophole for tax evasion in the digital asset market. They contend that without broker reporting, the IRS lacks the necessary tools to ensure that individuals and entities are accurately reporting gains and income from digital asset sales, leading to a substantial tax gap and undermining tax fairness.

Tradeoffs

This provision navigates the tension between fostering innovation and privacy in the digital asset space versus ensuring comprehensive tax compliance and revenue collection. It prioritizes reducing regulatory burden on the nascent industry at the potential cost of increased difficulty in enforcing existing tax laws for digital assets.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.