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

Odaily News Congressional Republicans are working to overturn new IRS guidance that requires “custodial brokers” to report transactions. Rep. Mike Carey (R-OH) and Sen. Ted Cruz (R-KY) introduced a resolution this week seeking to “revoke the disastrous IRS broker rule.”
Several weeks ago, several cryptocurrency lobbying firms sued the IRS over the rule, alleging that the requirement “exceeds the agency’s statutory authority, violates the Administrative Procedure Act (APA), and is unconstitutional.”
Currently, custodial brokers must report gross receipts starting in 2025. In 2026, they will have to report the cost basis of certain transactions. The final version of the 1099-DA form was released late last year. While an early draft included a section requiring brokers to identify the “type” of their business, the final form eliminated that box. It’s a small change, but by removing the section, the IRS has more or less postponed the issue facing DeFi participants.
Even so, opponents of the rule argue that it still imposes unfair reporting obligations on intermediaries and other players in the crypto space. The resolutions have some co-sponsors (such as Senators Cynthia Lummis and Tim Sheehy), but no vote has been scheduled yet. (blockworks)
Earlier news, 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.