S.jres3 - 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
This document is a joint resolution (S.J. Res. 3) introduced in the Senate aiming to disapprove a rule submitted by the Internal Revenue Service (IRS) concerning gross proceeds reporting by brokers involved in digital asset sales. The resolution invokes Chapter 8 of Title 5 of the United States Code, which provides a mechanism for Congress to review and potentially overturn agency regulations. The rule in question, as referenced in the document, pertains to IRS regulations regarding the reporting of gross proceeds from digital asset sales by brokers.
The resolution was introduced by Senator Cruz, along with several co-sponsors, and was referred to the Committee on Finance for consideration. The core purpose of the resolution is to nullify the IRS rule, preventing it from taking effect.
If passed, the resolution would effectively block the IRS from implementing the specified reporting requirements for digital asset brokers.
Expected Effects
If the resolution passes, the IRS rule on gross proceeds reporting by brokers that regularly provide services effectuating digital asset sales will not go into effect. This means that the specific reporting requirements outlined in the rule (89 Fed. Reg. 106928) would be nullified.
Digital asset brokers would not be subject to the reporting requirements outlined in the disapproved rule. This could lead to less regulatory oversight of digital asset transactions.
The resolution's passage could signal a broader congressional intent to limit regulatory actions related to digital assets.
Potential Benefits
- Reduced Regulatory Burden: Digital asset brokers would avoid the costs and complexities associated with complying with the IRS rule.
- Potential for Innovation: Less stringent reporting requirements could foster innovation in the digital asset space.
- Protection of Privacy: Some argue that reduced reporting requirements protect the privacy of digital asset users.
- Avoidance of Unnecessary Compliance Costs: Prevents the imposition of compliance costs if the rule is deemed overly burdensome or flawed.
- Congressional Oversight: Affirms Congress's role in overseeing and checking the power of regulatory agencies.
Most Benefited Areas:
Potential Disadvantages
- Reduced Tax Revenue: Less comprehensive reporting could make it harder for the IRS to track and collect taxes on digital asset transactions, potentially reducing government revenue.
- Increased Tax Evasion: The lack of reporting requirements could make it easier for individuals and entities to evade taxes on digital asset gains.
- Reduced Transparency: Less transparency in the digital asset market could make it more susceptible to illicit activities.
- Difficulty in Monitoring the Digital Asset Market: Without the reporting rule, it may be more difficult to monitor the digital asset market for illegal activities.
- Uncertainty for Taxpayers: The lack of clear reporting guidelines could create uncertainty for taxpayers trying to comply with tax laws related to digital assets.
Most Disadvantaged Areas:
Constitutional Alignment
The resolution is an exercise of Congress's legislative powers under Article I, Section 1 of the Constitution, which vests all legislative powers in Congress. Specifically, it utilizes the Congressional Review Act (Chapter 8 of Title 5), which allows Congress to disapprove agency rules. This is a mechanism designed to ensure that regulatory agencies do not overstep their authority and that Congress retains oversight over the implementation of laws.
The resolution does not appear to infringe upon any specific constitutional rights or freedoms. It is a procedural mechanism for Congress to check the power of the executive branch.
By using the Congressional Review Act, Congress is acting within its constitutional authority to oversee and regulate the implementation of laws by executive 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).