A majority of lawmakers in the U.S. House of Representatives voted to overturn an IRS rule treating crypto entities as brokers and requiring them to collect certain taxpayer and transaction information, including decentralized finance (DeFi) platforms.
With a 292-132 vote, a bipartisan majority in the House joined the U.S. Senate in advancing the Congressional Review Act resolution overturning the rule finalized in the closing days of former President Joe Bidenโs administration.
Missouri Republican Jason Smith, urging his fellow lawmakers to vote for the resolution earlier in the day, said the IRS rule risked harming U.S. businesses and disincentivized innovation.
โThere are real questions that the rule can ever even be administered,โ he said. โDeFi exchanges are not the same as centralized crypto exchanges or traditional banks or brokers. DeFi platforms do not and cannot even collect the information from users needed to implement this rule.โ
Last week, 70 Senators voted to overturn the rule, and President Donald Trumpโs senior advisers have already recommended he sign the provision. However, the Senate will need to approve the resolution again due to budget rules, Rep. Jason Smith (R-Mo.) noted. If it approves the resolution and Trump signs it, the IRS will be barred from ever bringing a similar rule again.
Illinois Democrat Danny Davis pushed back against the resolution, noting that it stemmed from the 2021 bipartisan Infrastructure Investment and Jobs Act, and comparing crypto to stocks.
โWhen you sell stock with a stock broker, the broker reports the proceeds of the sale to both you and the Internal Revenue Service,โ he said. โProbably to no oneโs surprise, when there is independent reporting on these sales, taxpayers are more likely to report their income to the Internal Revenue Service.โ
North Carolina Republican Tim Moore said the rule โgoes far beyondโ Congressโs intention with the 2021 law.
โThis rule has placed impossible burdens on software developers threatening American leadership in digital asset innovation,โ he said.
Texas Democrat Lloyd Doggett called the resolution โspecial interest legislation,โ adding that it could be โexploited by wealthy tax cheats, drug traffickers and terrorist financiers,โ and add $4 billion to the national debt, conflicting with U.S. President Donald Trumpโs stated goal of cutting the debt.
Tuesdayโs vote was preceded by the House vote on a continuing resolution to fund the U.S. government through Sept. 30, 2025, which passed with 217 votes in favor to 213 votes against. That funding resolution now heads to the Senate.
