The House of Representatives of the United States has crossed a key measure to cancel an IRS rule which imposes strict tax reports on decentralized financing platforms (DEFI). The Chamber’s Ways and Meaning Committee voted 26-16 in favor of a resolution to cancel the IRS policy under the Congressal Review Act. The measure is now moved to the full house and, if it is approved by the two chambers, requires a presidential signature to take effect.
The IRS rule, introduced in December, obliges the protocols DEFI to comply with the tax -style tax reports, a decision which, according to the chiefs of the industry, is impractical and harmful to the sector. Last week, almost all large cryptography companies supported a letter from the Blockchain association urging the congress to repeal the regulations. Critics warn that the rule extends beyond brokers, potentially affecting non-guardian platforms and developers.
Republican legislators, including representative Mike Carey and Senator Ted Cruz, are responsible for dismantling the IRS rule, arguing that it would overwhelm taxpayers and the agency. Carey described it as a “nightmare”, while representative Jason Smith accused the IRS of having exceeded his authority in the last days of President Biden.
The Democratic representative Richard Neal defended the rule, emphasizing his role in tax compliance and preventing him from cryptographic investors from bypassing tax obligations. The abrogation of the rule would have cost the US government $ 3.9 billion in tax revenue lost over a decade.
The debate highlights the growing tensions between regulators and the cryptographic industry, while legislators weigh the application of the tax against the promotion of innovation. If the resolution adopts, it would mark a significant victory for defenders DEFI fighting against regulatory overtaking.
