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. (119th Congress)
Summary
H.J.Res.25 is a joint resolution passed by the House of Representatives that disapproves a rule submitted by the Internal Revenue Service (IRS) concerning gross proceeds reporting by brokers that regularly provide services effectuating digital asset sales. The resolution specifically targets the IRS rule found in the Federal Register (89 Fed. Reg. 106928) dated December 30, 2024. The resolution states that the disapproved rule shall have no force or effect.
This action is taken under chapter 8 of title 5, United States Code, which provides a mechanism for congressional review of agency rulemaking. The resolution reflects a legislative effort to block the implementation of a specific IRS regulation related to the reporting of digital asset sales.
The resolution was passed by the House of Representatives on March 11, 2025, indicating a congressional intent to prevent the IRS from enforcing the specified rule.
Expected Effects
The primary effect of H.J.Res.25, if enacted into law, is to prevent the IRS from implementing and enforcing the rule regarding gross proceeds reporting by brokers of digital assets. This means that brokers who facilitate digital asset sales would not be required to comply with the reporting requirements outlined in the disapproved IRS rule.
This could lead to less transparency in the digital asset market, as the IRS would lack the information it sought to collect through the rule. It may also reduce the tax burden and compliance costs for affected brokers, at least in the short term.
Potential Benefits
- Potentially reduces compliance costs for brokers dealing with digital assets.
- May foster innovation in the digital asset space by removing regulatory hurdles.
- Could prevent the IRS from overreaching its authority in regulating digital assets.
- Might protect the privacy of individuals engaging in digital asset transactions.
- Could simplify tax reporting for some digital asset transactions.
Most Benefited Areas:
Potential Disadvantages
- May reduce transparency in the digital asset market, potentially facilitating tax evasion.
- Could hinder the IRS's ability to accurately assess and collect taxes on digital asset transactions.
- Might create uncertainty about the future regulatory landscape for digital assets.
- Could disproportionately benefit larger brokers who can more easily absorb the lack of regulation.
- May lead to a decrease in government revenue due to underreporting of digital asset sales.
Most Disadvantaged Areas:
Constitutional Alignment
The resolution is an exercise of Congress's legislative power under Article I, Section 1 of the Constitution, which vests all legislative powers in the Congress. Specifically, it utilizes the Congressional Review Act (chapter 8 of title 5, United States Code) to disapprove an agency rule, a power delegated by Congress itself.
The resolution does not appear to directly infringe upon any specific constitutional rights or protections. However, the underlying IRS rule, if implemented, could potentially raise privacy concerns, which are indirectly addressed by the disapproval resolution.
Overall, the resolution itself is a constitutional exercise of legislative authority to check the power of the executive branch and its agencies.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).