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House representatives voted yesterday to overturn the IRS’s “DeFi broker” rule, which was passed in the final days of the Biden administration.
The resolution — introduced under the Congressional Review Act — passed in a 292-131 vote. 76 Democrats voted in favor of abolishing the rule.
The IRS’s rule required DeFi brokers to file 1099-DA forms, which are the newly approved tax forms that crypto exchanges must use starting in tax year 2025. Given that DeFi companies are not centralized, the requirements were unrealistic, industry advocates have argued.
During yesterday’s floor debate, Missouri Republican Jason Smith said that the crypto firms being targeted with these IRS guidelines are not capable of supplying the kind of data being requested.
“DeFi exchanges are not the same as centralized crypto exchanges or traditional banks or brokers,” he said, adding that most of these DeFi platforms “do not and cannot” collect certain user information.
The resolution passed in the Senate last week in a 70-27 vote and will now be heading to the president’s desk. Trump’s advisers have recommended he sign the resolution.
The last time both chambers of Congress agreed to nix a federal agency policy was late last session, when a resolution seeking to overturn the SEC’s SAB 121 guidance received bipartisan support. Biden eventually vetoed the matter, but the SEC quickly overturned SAB 121 after Trump took office.
There’s a new sheriff in town indeed.
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