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Congress Pushes Back Against IRS DeFi Tax Rule – All You Need To Know
The United States House Ways and Means Committee has voted 26-16 in favor of a resolution seeking to repeal the “DeFi broker rule”, which requires decentralized exchanges and digital asset brokers to report transaction details to the Internal Revenue Service (IRS). This development marks a significant shift in US crypto regulations, as Republican lawmakers push back against government intervention.
Approved by the IRS on December 5, the proposed regulation aims to expand reporting requirements for cryptocurrency transactions. However, critics argue that enforcing such measures on decentralized platforms is impractical and represents excessive government interference. House Ways and Means Chair Jason Smith (R-MO) expressed concerns about the regulation’s potential impact on US-based firms, stating that it would place an undue burden on them while giving foreign entities an unfair advantage.
The DeFi Education Fund CEO, Miller Whitehouse-Levine, echoed these concerns, labeling the rule as “unlawful and unconstitutional overreach.” The organization urges all members to support the motion to overturn this misguided rule, emphasizing the importance of protecting Americans’ freedom of choice in their financial transactions.
This effort is seen as a part of a broader transformation in US crypto regulations. With Republicans now controlling both the Senate and House, industry leaders anticipate that the US could become one of the most crypto-friendly administrations in history. This shift is already evident, as the Securities and Exchange Commission (SEC) has withdrawn multiple enforcement actions against cryptocurrency companies throughout February, indicating a more lenient regulatory approach.
The development also raises questions about the potential impact on the DeFi space, particularly with regards to tax reporting. If the rule is repealed, it may lead to increased anonymity in transactions for users, which could have both positive and negative implications depending on how platforms adapt.
Overall, this move indicates a shift towards more lenient crypto regulations under the Trump administration, sparking optimism among the cryptocurrency community regarding future prospects.
Source: https://ambcrypto.com/congress-pushes-back-against-irs-defi-tax-rule-all-you-need-to-know
