Bipartisan Coalition Rescinds Controversial IRS Crypto Tax Regulation
In a major victory for the crypto industry, the U.S. House of Representatives voted 292-132 to overturn an IRS rule that would have required DeFi platforms to collect and report taxpayer information.
The rule, finalized during the Biden administration, sought to expand the definition of “broker” to include DeFi protocols, requiring them to file Form 1099-DA tax reports—despite the fact that most DeFi platforms lack the ability to collect user data.
Concerns About Compliance and Privacy
House Ways and Means Committee Chairman Jason Smith (R-MO) criticized the rule as "unfair" and "unworkable," arguing that DeFi protocols do not control digital assets and cannot comply with the regulation.
Texas Representative Lloyd Doggett (D-TX) opposed the repeal, warning that it could enable tax evasion and illicit finance activities.
What Happens Next?
The resolution now heads back to the Senate for another vote before reaching President Trump’s desk, where it is expected to be signed into law. If passed, it would prevent the IRS from imposing similar rules without explicit congressional approval.
