The US Senate is preparing to hold a final vote on March 27 to nullify the Internal Revenue Service’s (IRS) broker reporting rule for DeFi operators.
If approved, the resolution could be sent to President Donald Trump’s desk as early as March 28 for signing, according to Fox reporter Eleanor Terrett reported on March 25, citing three people familiar with the matter.
The vote follows a procedural requirement after the Senate passed the same joint resolution in a bipartisan supermajority on March 4. 292 lawmakers voted to overturn the broker rule, while 132 opposed it.
The broker rule, finalized by the IRS in December 2023, aimed to broaden tax reporting obligations by redefining “brokers” to include digital asset platforms, including DeFi front-end interfaces.
Under the regulation, entities classified as brokers would be responsible for implementing Know Your Customer (KYC) standards, monitoring user activity, and reporting transaction data to the IRS.
Community pushback
The rule was introduced as part of the former President Joe Biden administration’s broader strategy to close tax gaps associated with crypto transactions and enhance visibility into blockchain-based financial activity.
Since its introduction, the IRS rule has been the focus of industry opposition, with developers and advocates warning that DeFi infrastructure cannot feasibly comply with broker-level surveillance and reporting requirements.
In December, the decision prompted a joint lawsuit by the Blockchain Association, the DeFi Education Fund, and the Texas Blockchain Council challenging the rulemaking. The entities said that the rule “risks crippling the US digital asset sector.”
Blockchain Association’s head of legal, Marisa Coppel, said amid the lawsuit that the Treasury has gone beyond its statutory authority in expanding the definition of “broker” to include providers of DeFi trading front-ends. She added that these interfaces do not affect transactions.
Additionally, critics have highlighted that DeFi protocols lack centralized control or custodial authority over user funds, rendering the expansion of the broker rule useless.
If Trump signs, the rule will be formally repealed, removing the expanded definition of brokers from IRS enforcement policy.
