Carey, Cruz seek to overturn IRS's proposed cryptocurrency broker rules

Odaily Planet Daily News: Republicans in the U.S. Congress are working to overturn new IRS guidelines that require "custodial brokers" to report transactions. Rep. Mike Carey and Sen. Ted Cruz introduced corresponding resolutions this week, seeking to "revoke the disastrous IRS broker rule." A few weeks ago, several cryptocurrency lobbying companies sued the IRS over the regulation, accusing the requirement of "exceeding the agency's statutory authority, violating the Administrative Procedure Act (APA), and being unconstitutional." Currently, starting in 2025, custodial brokers must report total returns. By 2026, they will have to report the cost basis of certain transactions. The final version of Form 1099-DA was released at the end of last year. While early drafts included a section requiring brokers to identify the "type" of their business, the final form eliminated this box. It's a small change, but by removing this section, the IRS has more or less postponed the problems facing DeFi participants. Even so, opponents of the rule believe that the rule still imposes unfair reporting obligations on intermediaries and other participants in the crypto space. These resolutions have some co-sponsors (such as Senators Cynthia Lummis and Tim Sheehy), but no vote has been scheduled yet. (blockworks) Previously, the U.S. Internal Revenue Service (IRS) announced that it would implement a third-party reporting system for cryptocurrency transactions starting in 2025. According to the regulations, companies that provide reports include "brokers who hold digital assets sold by customers. These brokers include operators of custodial digital asset trading platforms, digital asset custodial wallet providers, cryptocurrency ATM operators, and certain digital asset payment (PDAP) processors." This means that centralized trading platforms such as Coinbase and Gemini will need to report users' cryptocurrency transaction information to the tax department for the first time through the newly established 1099-DA form.