President Trump Repeals Controversial Biden-Era IRS Crypto Rule

President Donald Trump has signed a resolution repealing a controversial crypto tax rule that was finalized towards the end of the Biden administration, according to lawmakers who introduced the measure. The rule required decentralized finance (DeFi) platforms to collect and report user data to the tax agency, similar to how traditional brokers work. Trump Repeals Controversial Crypto Rule On Thursday, US President Donald Trump signed a resolution to repeal a controversial Biden-era tax rule that required decentralized finance (DeFi) platforms to collect and report the same taxpayer information and data as traditional financial brokers. The resolution had strong bipartisan support, with the White House calling the bill a “midnight regulation in the final days of the previous administration.” Republican Senators Ted Cruz of Texas and Mike Carey of Ohio had introduced a joint resolution to overturn the Internal Revenue Service rule, which was passed in December. Carey, who attended the signing of the resolution on Thursday, said it was the first-ever crypto bill to be signed into law. “By repealing this misguided rule, President Trump and Congress have given the IRS an opportunity to return its focus to the duties and obligations it already owes to American taxpayers instead of creating a new series of bureaucratic hurdles.” The Senate voted to overturn the rule in March, followed by a vote in the House. However, it went back to the Senate because of a budget provision. This time, it garnered Democratic support, including from Senate Minority Leader Chuck Schumer, but most of the support came from the Republican corner. H.J.Res.25 The measure, also called H.J.Res.25, will render the IRS’ “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales” void. The rule was introduced towards the end of the Biden administration’s term, expanding the definition of “broker” to include non-custodial entities like DeFi platforms and trading front-end service providers. Under the expanded scope, DeFi projects were required to report gross proceeds from crypto sales and collect taxpayer data, including identities and transaction histories. The resolution means the rule will have “no force or effect,” immediately repealing requirements for DeFi platforms and digital asset brokers to report sales proceeds on Form-1099. US Representative Mike Carey said in a statement, “The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season.” A Move Against DeFi And Innovation Prominent industry leaders had objected to the IRS rule change when it was announced, stating that it would destroy the DeFi ecosystem in the United States. Decentralized Finance protocols run on automated code and are generally incapable of complying with stringent tax reporting requirements designed for more traditional brokers. However, the IRS initiated the rule anyway, enraging industry leaders and lawmakers alike. The Trump administration was critical of the new rule and threw its weight behind the measure to repeal it, with White House AI and crypto czar slamming the rule. Sacks stated, “The rule would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information while imposing an unprecedented compliance burden on American DeFi companies.” Crypto policy leaders hailed the decision to eliminate the rule, which could have become a major hurdle in the industry’s trajectory. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: Crypto Daily