US House follows Senate in passing resolution to kill IRS DeFi broker rule
Source: Coin Tegraph
The US House of Representatives has voted in favor of nullifying a rule that would have required decentralized finance (DeFi) protocols to report to the Internal Revenue Service.
On March 11, the House of Representatives voted 292 for and 132 against a motion to repeal the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.
All 132 votes to keep the rule were Democrats. However, 76 of those in the party joined the Republican vote to repeal it.
This follows the US Senate’s March 4 vote on the motion to repeal, which saw it pass with a vote of 70 to 27.
The rule would force DeFi platforms, such as decentralized exchanges, to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.
Speaking after the vote, Republican Representative Mike Carey, who submitted the repeal motion, said, “The DeFi broker rule invades the privacy of tens of millions of Americans, hinders the development of an important new industry in the United States and would overwhelm the IRS.”
Congressman Mike Carey speaking after the vote. Source: Mike Carey
House Financial Services Committee Chairman French Hill also applauded the overturning of the rule, calling it “a clear example of government overreach that threatens to push American digital asset development overseas.”
The resolution will need to pass another Senate vote before being sent to President Donald Trump, who has signaled he’d support it.
Those opposing the rule repeal included Democrat Representative Lloyd Doggett, who said getting a “special interest exemption” from IRS disclosures “makes tax evasion and money laundering so much easier for wealthy Republican donors who have been using these decentralized exchanges.”
He claimed killing the rule would create a “loophole that would be exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
Related: US lawmakers advance resolution to repeal ‘unfair’ crypto tax rule
In early March, White House AI and crypto czar David Sacks said the administration would support congressional efforts to rescind the DeFi broker rule.
At the time, officials from the Office of Management and Budget wrote, “This 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.”
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