The Senate voted 70-28 on Wednesday in support of a resolution to knock down a Biden-era rule previously pushed by the IRS that would have required decentralized finance platforms to collect and report taxpayer information.
Critics argued the rule was "fundamentally unworkable" because DeFi platforms operate through automated code on blockchains without human intervention or visibility into user identities.
Efforts to repeal and revise the IRS ruling emerged in January, with the U.S. House of Representatives signaling consideration by February.
A week later, the Trump administration threw its weight behind those efforts, leading to a move from the Senate to overturn it on March 4.
US Senate Votes to Overturn Controversial Crypto Tax Reporting Rule
On Wednesday, the U.S. Senate passed a resolution to overturn an Internal Revenue Service rule requiring brokers to report gross proceeds from digital asset sales, delivering a significant victory for President Donald Trump’s administration and crypto industry advocates. The measure, introduced under the Congressional Review Act, passed in a 70-27 vote, with Republicans largely united against the rule and many Democrats crossing the aisle in support. It’s “absolutely mind-blowing” how many Demo...
However, readings of the Congressional were restarted due to a "blue slip" issue where the House cited constitutional concerns over how budget matters are handled, arguing that the repeal should have started with the House.
A parallel version of the resolution was later passed by the House earlier this month with a 292-132 bipartisan turnout.
It's now making its way to the White House, where President Donald Trump is expected to sign.
Critical concerns
Earlier this month, U.S. Treasury Secretary Scott Bessent said that his office is looking to work closely with the IRS and Office of the Comptroller of the Currency (OCC) to "rescind and amend" related crypto tax rules that impacted how crypto and digital asset firms do business in the country.
Concerns over the IRS broker rule point to its language about "DeFi brokers" as "front-end service providers" for digital asset transactions.
Trump Admin Throws Weight Behind Bill to Repeal Anti-DeFi IRS Crypto Tax Rule
President Donald Trump’s crypto czar has officially endorsed legislation that would prevent the IRS from imposing strict reporting rules on decentralized finance projects—marking the first time the Trump administration has explicitly weighed in on pending crypto policy. David Sacks, Trump’s crypto policy chief, said on Tuesday that the White House “strongly supports” passage of a joint congressional resolution that would undo a controversial Biden-era IRS rule expanding the definition of “broker...
Issues over how the rule unnecessarily extended these definitions were condemned by Commissioner Hester Pierce in February last year as something that would be "harming" market participants who have unwittingly found themselves “transformed into dealers."
By April of the same year, crypto lobbyists sued the then-Gensler-led SEC over broad language on and definitions of what constitutes operating as a "broker," with the DeFi Education Fund warning months later that the requirements would "push this entire, burgeoning technology offshore."
"This is a crucial step towards protecting U.S. innovation and ensuring that developers can continue to build cutting-edge technologies without the burden of unclear, overreaching regulations," Amanda Tuminelli, Executive Director and Chief Legal Officer of DeFi Education Fund, told Decrypt on Thursday.
Edited by Sebastian Sinclair
