HJRES 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".

HJRES 25 in plain English: This resolution, now signed into law, cancels an IRS rule issued December 30, 2024 that would have required participants in decentralized finance (DeFi) transactions to report information about digital asset sales to the IRS. Decentralized finance refers to cryptocurrency-based financial services that operate without traditional financial intermediaries such as banks.

Stated purpose

This resolution cancels an IRS rule that would have required participants in decentralized finance (DeFi) transactions to report digital asset sales information to the IRS. Congress used its authority under the Congressional Review Act to nullify that rule.

Key points

• Nullifies an IRS rule issued December 30, 2024 on digital asset gross proceeds reporting
• Removes reporting requirements for brokers facilitating decentralized finance (DeFi) transactions
• DeFi transactions involve cryptocurrency services conducted without traditional financial intermediaries

Arguments supporters make

• DeFi platforms are software protocols, not traditional financial intermediaries, so forcing them to act as brokers is technically impossible and misapplies existing law.
• Requiring DeFi operators to collect user data would compromise the privacy and decentralized nature that these systems are specifically designed to provide.
• Overly burdensome IRS reporting rules could push DeFi innovation and businesses out of the United States to less regulated countries.

Arguments opponents make

• Without broker reporting, cryptocurrency gains from DeFi transactions are easier to hide from the IRS, allowing some users to avoid paying taxes that other Americans owe on similar income.
• Removing this reporting requirement creates an uneven playing field where traditional financial brokers must report customer transactions but DeFi participants face no equivalent oversight.
• The IRS rule was a lawful exercise of tax enforcement authority, and canceling it reduces the government's ability to collect revenue it is legally owed.

Tradeoffs

Eliminating the reporting rule preserves privacy and removes compliance burdens for DeFi participants, but it also reduces tax-reporting transparency and may make it harder for the IRS to ensure digital asset gains are properly taxed like other investment income.

Current status in Congress: Became law.

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