PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY THE INTERNAL REVENUE SERVICE RELATING TO "GROSS PROCEEDS REPORTING BY BROKERS THAT REGULARLY PROVIDE SERVICES EFFECTUATING DIGITAL...

On 2025-03-11, Representative Mike Carey (R-OH-15) delivered a floor speech titled "PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY THE INTERNAL REVENUE SERVICE RELATING TO "GROSS PROCEED" in the House. The speech addressed taxes and also covered foreign policy, China. It referenced legislation including HRES211, HJRES25.

PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY THE INTERNAL REVENUE SERVICE RELATING TO "GROSS PROCEEDS REPORTING BY BROKERS THAT REGULARLY PROVIDE SERVICES EFFECTUATING DIGITAL...

Congressional Record, Volume 171 Issue 45 (Tuesday, March 11, 2025) [Congressional Record Volume 171, Number 45 (Tuesday, March 11, 2025)] [House] [Pages H1099-H1102] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY THE INTERNAL REVENUE SERVICE RELATING TO ``GROSS PROCEEDS REPORTING BY BROKERS THAT REGULARLY PROVIDE SERVICES EFFECTUATING DIGITAL ASSET SALES'' Mr. SMITH of Missouri. Mr. Speaker, pursuant to House Resolution 211, I call up the joint resolution (H.J. Res. 25) 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'', and ask for its immediate consideration in the House. The Clerk read the title of the joint resolution. The SPEAKER pro tempore. Pursuant to House Resolution 211, the joint resolution is considered read. The text of the joint resolution is as follows: H.J. Res. 25 Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Internal Revenue Service relating to ``Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales'' (89 Fed. Reg. 106928 (December 30, 2024)), and such rule shall have no force or effect. The SPEAKER pro tempore. The joint resolution shall be debatable for 1 hour equally divided and controlled by the chair and ranking member of the Committee on Ways and Means or their respective designees. The gentleman from Missouri (Mr. Smith) and the gentleman from Illinois (Mr. Davis) each will control 30 minutes. The Chair recognizes the gentleman from Missouri. General Leave Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and submit extraneous material on the bill under consideration. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Missouri? There was no objection. Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of a Congressional Review Act resolution repealing the last-minute, unfair, and unworkable Biden IRS rule that places a bureaucratic burden on the Americans who own cryptocurrency and the platforms that allow them to own it. Congress gave the IRS clear instructions in the 2021 infrastructure law regarding digital asset reporting. The IRS was given an inch and took a mile, writing a rule that is overly broad and downright sloppy in the process. The rule subjects decentralized finance platforms, or DeFi exchanges, to the same reporting requirements as a centralized bank or traditional securities broker. Under President Biden, the IRS traded congressional intent for a politically motivated mandate. The Biden administration made no secret of its opposition to digital assets and America's leadership in this booming industry. Bureaucrats weaponized every tool in the toolbox, including finalizing this rule at the eleventh hour, crippling the digital asset industry and threatening American leadership and innovation in the process. Approximately one in four Americans own cryptocurrency. This rule puts a huge burden on these regular folks and could discourage participation in the digital asset market altogether. [[Page H1100]] While workers lose, foreign countries win. Since only American companies and taxpayers have to comply with the burdensome rules, only American companies and taxpayers will need to spend billions of dollars to change their business models and report billions of pieces of taxpayer data. America risks losing our edge to foreign companies as a result. The rule disincentivizes the very innovation that has powered American leadership in the digital asset industry. In a global economic competition with China, this rule chips away at a source of American economic strength. There are real questions if the rule can even be administered. DeFi exchanges are not the same as centralized crypto exchanges or traditional banks or brokers. DeFi platforms do not and cannot even collect the information from users needed to implement this rule. Their software never controls the digital assets. DeFi platforms cannot exchange currencies, hold assets in escrow, or maintain third-party records of financial transactions like their counterparts, yet the Biden administration wanted to treat them the same. As former IRS Commissioner Rettig said himself, these new IRS crypto regulations require millions of taxpayers to file new Form 1099s in a way that would ``overwhelm the agency and have little or no value to effective and efficient tax administration.'' The lesson here is simple: Laws passed by Congress should be interpreted and implemented fairly, not used as a pretext to gain more control over the economy at the expense of individual taxpayers. The repeal of this misguided rule would remove a barrier preventing American consumers from participating in crypto and help cement America's digital asset leadership. I thank my Ways and Means colleague, Congressman Mike Carey, for leading the effort to protect taxpayers from an unjustified overreach from the Biden administration. Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time. Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, back in 2021, when we passed the bipartisan infrastructure law, Congress felt it was necessary to pay for what we spent. That is a novel concept around here these days, I know. As part of the offsets to that truly bipartisan bill, we made some changes around tax reporting for the sale of cryptocurrency. Under the tax system, taxpayers are required to pay tax when they sell an asset, such as stocks or securities, at a gain. I know that some of my colleagues on the other side of the aisle bristle at that notion, but that is how our income tax works. Nothing in the bipartisan infrastructure law changed anything about the tax that cryptocurrency sellers owe. Instead, we created a reporting requirement relating to the sales of these assets. When you sell stock with a stockbroker, the broker reports the proceeds of the sale to both you and the Internal Revenue Service. {time} 1515 Probably to no one's surprise, when there is independent reporting on these sales, taxpayers are more likely to report their income to the Internal Revenue Service. It is simple human nature. When there is an independent check on one's financial gain, taxpayers are more honest in their reporting of that gain. This resolution today would repeal some but not all of the Treasury regulations by the Biden administration regarding the new reporting requirements related to sales of cryptocurrency. Although cryptocurrency is exchanged on both centralized and decentralized platforms, the bill today only repeals the regulation related to decentralized exchanges. This inconsistent treatment of cryptocurrency exchanges leaves a significant gap in this reporting system. If this CRA passes, while redundant, taxpayers, who would rather avoid paying taxes on the gains of their cryptocurrency sale, can now move to a decentralized exchange knowing that the transaction would not be subject to reporting. In fact, the Joint Committee on Taxation estimates that this bill will cost the Federal Government $4 billion in tax revenue. That is, this bill is expected to cause $4 billion in tax cheating. It is clear to me that this bill weakens the Internal Revenue Service's ability to detect and reduce cheating. Further, I am deeply troubled by the potential of this bill to bolster nefarious criminal activity. Decentralized exchanges are far less regulated than other exchanges. They are known for being a method of laundering the sales of fentanyl and human trafficking. At the Rules Committee hearing yesterday, my colleagues on the other side of the aisle suggested that nothing is stopping Congress from coming back and modifying the rules to ensure tax compliance. Unfortunately, given that my Republican colleagues have repeatedly promoted tax cheating by the wealthy by their repeated efforts to cut funding for IRS enforcement, this claim that they would take action to ensure tax compliance in the deregulated crypto world rings hollow. In short, this is an unpaid-for $4 billion giveaway to wealthy crypto traders with the potential for side-effects that are much worse. Mr. Speaker, for that reason, I do not support this joint resolution, and I reserve the balance of my time. Mr. SMITH of Missouri. Mr. Speaker, I yield such time as he may consume to the gentleman from Ohio (Mr. Carey). Mr. CAREY. Mr. Speaker, I thank Chairman Smith for his work on bringing this legislation to the floor. I also thank the staff of the Committee on Ways and Means for their efforts in moving this very important legislation forward. This commonsense, bipartisan resolution would overturn the IRS' Digital Assets Sale and Exchanges Rule, otherwise known as the ``DeFi broker rule.'' This legislation has broad bipartisan support. How do we know this? Last week in the Senate, 51 Republicans were joined by 18 Democrats and 1 Independent who favored it. The DeFi broker rule, which came out at the end of 2024, implements stringent reporting requirements on decentralized finance exchanges, or DeFi exchanges. DeFi exchanges were subject to the same reporting requirements as traditional brokers in centralized exchanges, despite the fact that DeFi exchanges don't have the ability to collect any information that the IRS requires from individuals using their platforms. This goes well beyond the scope of the Infrastructure Investment and Jobs Act instructions to the IRS and Treasury regarding establ

Referenced legislation: HJRES25, HJRES25, HRES211