Trump Repeals IRS Crypto Reporting Rule, Costing $4 Billion Over 10 Years

President Donald Trump has signed a resolution to repeal an Internal Revenue Service (IRS) rule that would have required certain crypto brokers, including decentralized finance (DeFi) platforms, to report customer transactions to the tax agency. This move marks a significant reversal of a Biden-era tax reporting measure and underscores Trump's alignment with the crypto industry.

The IRS rule, finalized in late 2024, was intended to clarify that new broker reporting requirements also applied to DeFi platforms. The rule, which was set to take effect in 2026, aimed to ensure that crypto users paid taxes on asset sales. The Treasury estimated that billions in crypto-related taxes were going uncollected each year.

The rule faced strong opposition from the digital asset industry. DeFi platforms, unlike centralized exchanges, do not act as intermediaries and lack access to user identities. Executives and developers argued that the rule was technically impossible to follow and legally risky, placing unworkable burdens on protocols built to be permissionless. Industry lobbying intensified after the IRS expanded the definition of “broker” to include software-based DeFi tools. Crypto advocates called the move government overreach, warning it would push development overseas. Republicans backed these concerns and moved to block the rule using the Congressional Review Act.

In March, both chambers of Congress passed the resolution with a simple majority. The Joint Committee on Taxation estimated that repealing the rule could cost the government nearly $4 billion over ten years. Despite the projected loss, lawmakers supporting the repeal argued that privacy, technical feasibility, and innovation were more important. Rep. Mike Carey stated that the DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and would overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season. Ways and Means Committee Chairman Jason Smith added that with Trump’s signature, Congress had reaffirmed its authority to write tax law rather than leaving it to regulators.

Trump has positioned himself as a strong supporter of the crypto industry, pledging to make the US a global hub for digital assets. His administration quickly moved to establish a federal working group on crypto regulation and announced a national Bitcoin reserve strategy within weeks of his inauguration. This latest move further solidifies Trump's stance on supporting the growth and development of the crypto industry, ensuring that the US remains at the forefront of digital asset innovation.