Republicans in Congress are trying to change new IRS regulations that requires so-called “custodial brokers” Report all transactions.
Rep. Mike Carey, Sen. Ted Cruz and the corresponding resolutions were introduced this week by both. “roll back the disastrous IRS broker rule.”
It comes after weeks of a crypto lobbying group suing the IRS about the rule. They say the requirement “exceeds the agencies’ statutory authority, violates the Administrative Procedure Act (“APA”) and is unconstitutional.”
Currently, the custodial broker is required to declare gross proceeds starting 2025. By 2026 they’ll have to disclose the cost basis of certain transactions.
The 1099-DA final form was published by the IRS at the close of 2013. Early drafts included a section in which brokers were required to list their clients. “type” This box was removed from the final version of the form. This is a minor change but the IRS has essentially pushed the DeFi issue to the back burner by removing this section.
However, even those who are against the rule say that it still places unfair reporting requirements on crypto intermediaries.
There are co-sponsors for the resolutions, including Senators Cynthia Lummis and Tim Sheehy. Cynthia Lummis and Tim Sheehy are just two of the co-sponsors, but they have not yet been scheduled for either a vote or markup. The crypto-space is hot on the issue, however. We’d therefore expect companies to focus a large amount of lobbying effort here.
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