A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales".

Summary

This joint resolution, S.J. Res. 3, invokes the Congressional Review Act (CRA) of 1996 to nullify an Internal Revenue Service (IRS) rule requiring certain brokers and digital asset platforms to report information about customers' cryptocurrency transactions. Specifically, it targets the IRS rule titled 'Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales,' published in the Federal Register on December 30, 2024 (89 Fed. Reg. 106928). The rule would mandate that brokers who regularly facilitate digital asset sales—such as cryptocurrency exchanges, certain wallet providers, and other entities acting as intermediaries in crypto transactions—report gross proceeds and customer information to the IRS using a new Form 1099-DA, similar to how traditional brokers report stock sales on Form 1099-B. If enacted via presidential signature or congressional override of a veto, this joint resolution would legally invalidate the IRS rule, meaning it would have 'no force or effect.' The measure passed the Senate on March 4, 2025, and awaits consideration in the House of Representatives. Proponents argue the rule overreaches by attempting to apply traditional securities reporting frameworks to decentralized and innovative digital assets, imposing burdensome compliance costs on businesses and compromising user privacy. Critics contend that eliminating the rule would create a significant tax loophole, enabling widespread tax evasion in the rapidly growing cryptocurrency market and undermining efforts to ensure that digital asset transactions are subject to the same tax obligations as other financial instruments. The resolution highlights the ongoing tension between fostering innovation in financial technology and ensuring adequate tax compliance and consumer protection in emerging markets.

Where Each Party Stands

History