3 versions

CosmeticWhat changed in ENGROSSED IN SENATEcompared with PLACED ON CALENDAR SENATE (Feb 12, 2025)

Technical and procedural updates only. The later version, v3, reflects the bill's progression from being placed on the Senate calendar to having passed the Senate, including an attestation by the Secretary. No substantive policy changes were made to the joint resolution's text regarding the disapproval of the IRS rule.

S.J.Res. 3119th CongressIntroduced Jan 21, 2025

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".

Passed SenateTaxationMajor

View bill text

Sponsor: Sen. Cruz, Ted [R-TX]
Committees: Finance Committee (primary)
Last action: Mar 12, 2025

Bottom line

This bill nullifies an IRS rule that would have required digital asset brokers to report transaction data, reducing reporting burdens on the crypto industry but potentially hindering tax enforcement.

What it actually does

This joint resolution, under the Congressional Review Act (CRA), disapproves and nullifies a final rule issued by the Internal Revenue Service (IRS) concerning "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales." If enacted, the IRS rule, which would require digital asset brokers to report gross proceeds from digital asset sales to the IRS, would have no force or effect.

Proponents argue

Proponents argue that the IRS rule imposes an excessive and technologically challenging burden on the nascent digital asset industry, potentially stifling innovation and driving businesses overseas. They contend that the rule is overly broad and could lead to privacy concerns for individuals engaging in digital asset transactions.

Opponents contend

Opponents of the resolution (i.e., proponents of the IRS rule) argue that the reporting requirement is crucial for ensuring tax compliance in the rapidly growing digital asset market, preventing tax evasion, and closing the significant tax gap. They assert that it creates a level playing field with traditional financial assets, where similar reporting is already mandated.

The bill text is extremely short and straightforward, making it highly accessible for any reader to understand its direct legislative action.

Section 1

Disapproval of IRS Digital Asset Reporting Rule

prominently featuredstraightforward

This provision explicitly states that Congress disapproves the rule submitted by the Internal Revenue Service (IRS) titled "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales." By doing so, it invokes the Congressional Review Act (CRA), which, if fully enacted, would prevent the IRS rule from taking effect and prohibit the agency from issuing any substantially similar rule in the future without specific congressional authorization.

GroupImpactMechanismScale

GroupDigital Asset Brokers (e.g., cryptocurrency exchanges, certain digital wallet providers)ImpactRelief from new reporting requirementsMechanismThe rule requiring them to report gross proceeds from digital asset sales to the IRS is nullified.ScaleIndustry-wide reduction in compliance costs and administrative burden.

GroupDigital Asset Traders and InvestorsImpactReduced third-party reporting of their transactionsMechanismBrokers will not be required to send 1099-B forms or similar statements for digital asset sales.ScaleIndividual reduction in reporting burden, but also potential for less transparency to the IRS regarding capital gains.

GroupInternal Revenue Service (IRS)ImpactReduced ability to track digital asset transactions for tax enforcementMechanismLoss of a key information reporting tool for digital asset sales.ScalePotentially billions in uncollected tax revenue over time, contributing to the tax gap.

Supporters argue

Supporters of the disapproval argue that the IRS rule is technologically complex and burdensome for the nascent digital asset industry, potentially hindering innovation and competitiveness. They assert that it could impose significant compliance costs on businesses and individuals, and that the industry needs more time and tailored guidance.

Critics contend

Opponents of the disapproval (i.e., those who support the IRS rule) contend that the rule is essential for ensuring fair and effective tax administration. They argue that without third-party reporting, it is difficult for the IRS to track capital gains from digital asset sales, leading to significant tax evasion and an unfair advantage for digital assets over traditional investments.

Tradeoffs

This provision navigates the tension between fostering innovation and reducing regulatory burden in the digital asset space versus ensuring comprehensive tax compliance and revenue collection for the federal government. It also highlights the broader debate about the appropriate scope of executive agency rulemaking versus congressional oversight.

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.