U.S. Lawmakers Challenge IRS Broker Rule With Congressional Review Act

According to PANews, U.S. lawmakers are preparing a Congressional Review Act (CRA) to challenge the Internal Revenue Service's (IRS) broker rule, which mandates DeFi participants to report user data to the IRS. Fox Business reporter Eleanor Terrett disclosed on March 4, 2025, that Republican Senator Ted Cruz is leading the initiative to introduce this CRA. An initial vote was scheduled for March 5, but it may be delayed due to scheduling conflicts, including the upcoming State of the Union address. Terrett reported that if the CRA passes both the House and Senate with a simple majority, it will nullify the IRS broker rule under the U.S. Treasury Department. The rule broadens the definition of 'broker' to include DeFi developers. Supporters of the CRA argue that the current rule does not suit the unique nature of DeFi. The IRS broker rule, finalized last year, imposes new tax reporting requirements on entities handling digital assets. It classifies brokers, including DeFi front-ends, as entities responsible for tracking user activity, reporting transactions, and enforcing compliance measures. The rule also requires DeFi platforms to implement Know Your Customer (KYC) processes. Additionally, the regulation applies to all digital assets, including NFTs and stablecoins. The White House supports this initiative, while Crypto Asset Affairs Director David Sacks publicly stated on Tuesday that the so-called broker DeFi rule is a last-minute attack by the Biden administration on the crypto community. Coin Center Executive Director Peter Van Valkenburgh criticized the rule for treating software developers and infrastructure providers as brokers. He believes that enforcing such measures would harm privacy rights, ignore bipartisan concerns, and hinder technological progress. Valkenburgh emphasized that the outcome of this vote will serve as an early indicator of how the U.S. government will approach digital asset regulation in the coming years. He noted, "People have been talking about the new Congress taking a more crypto-friendly stance; this vote will be the first decisive test of that theory." Repealing the rule would align with U.S. President Donald Trump's broader pro-crypto asset stance and reinforce the growing influence of pro-crypto asset lawmakers.