Congress Votes to Repeal Biden-Era Crypto Tax Rule —What It Means for You
Big news for cryptocurrency investors and decentralized finance (DeFi) platforms—Congress just took a major step toward repealing a Biden-era tax rule that would have required certain crypto platforms to report user transactions to the IRS. And it wasn’t even close: The Senate voted 70-27 to overturn the rule, marking a big win for the crypto industry.
What Was the Rule?
The regulation, set to take effect in 2027, aimed to increase tax compliance by treating DeFi platforms like traditional financial institutions. In short, it would have required these platforms to report detailed customer transactions to the IRS—just like stock brokerages and centralized crypto exchanges do.
Why Did Lawmakers Strike It Down?
The crypto industry pushed back hard, arguing that DeFi platforms don’t operate like traditional brokers and shouldn’t be treated as such. Critics also said the compliance burden would be too high and could drive innovation out of the U.S. Lawmakers from both parties agreed and used the Congressional Review Act—an expedited legislative process—to kill the rule before it even went into effect.
What Happens Next?
The repeal is expected to become law soon, marking the first time Congress has eliminated a tax regulation using this process. And it may not be the last—Republicans have their eyes on other Biden-era rules, including those impacting appliances, energy, and manufacturing.
What Does This Mean for Crypto Investors?
For now, DeFi users won’t have third-party reporting on their transactions, but that doesn’t mean taxes can be ignored. The IRS still expects crypto investors to report gains and losses.
However, the Joint Committee on Taxation estimates that repealing the rule will reduce federal revenue by $3.9 billion over the next decade. Critics warn this could make tax evasion easier and limit the government’s ability to track illicit activities like money laundering and fraud.
Bottom Line: Stay Ahead of the IRS
Even without this rule, the IRS is cracking down on crypto tax evasion. If you’re unsure about your tax obligations, now is the time to get expert help. At IRSProb.com, we specialize in helping taxpayers navigate complex IRS issues. Don’t wait until the IRS comes knocking—reach out to us today.
