EddieJayonCrypto
27 Feb 25
The U.S. House of Representatives' Ways and Means Committee has advanced a resolution to prevent the IRS from imposing tax reporting requirements on decentralized finance (DeFi) projects. The resolution aims to repeal an IRS tax regime approved in December, which would require DeFi projects to compl...
The U.S. House Committee has advanced a resolution to prevent the IRS from imposing tax reporting requirements on decentralized finance (DeFi) projects. This resolution seeks to repeal an IRS tax regime approved in December, which would require DeFi projects to comply with the same transaction reporting rules as traditional brokers. If passed by a simple majority in Congress and finalized with the President's signature, the resolution will alleviate concerns about additional paperwork and privacy issues for cryptocurrency holders.
The recently approved IRS rule, which modifies the definition of "broker," mandates that DeFi projects follow the same transaction reporting rules as bond and stock brokers on Wall Street. This change also applies to centralized exchanges and requires DeFi projects to issue Form 1099 tax documents to users. However, the rule has faced criticism from trade groups and lawmakers due to its potential impact on privacy and innovation within the digital assets industry.
The opposition to the IRS tax rule highlights the ongoing debate surrounding decentralized finance and its regulatory implications. Pro-crypto Republicans, in particular, have expressed concerns about the burdensome requirements and the potential negative impact on innovation within the cryptocurrency space. As the resolution moves forward, it will be pivotal in shaping the regulatory landscape for DeFi projects and addressing the broader concerns of the cryptocurrency community.