Key Takeaways
- The Trump administration has successfully reversed an IRS crypto tax rule, signaling the industry’s first score through a pro-crypto effort in Congress.
- The Congress resolution abolishes an IRS rule approved during the last days of the Biden administration and would have affected DeFi projects.
- Congress voted to kill the IRS crypto tax rule in a decisive bipartisan vote.
US President Donald Trump signed into law legislation blocking an Internal Revenue Service (IRS) crypto tax rule that would have forced digital asset brokers to file tax information on transactions conducted by users on their platforms. The bill’s signing marks a significant win for the crypto industry delivered by the pro-crypto President.
With a stroke of the pen that appended his signature, Trump has freed the decentralized finance (DeFi) segment of the crypto sector from a burdensome demand that would have treated such platforms as brokers who would be required by law to track and report user activity.
Rule Formally ceases to Exist
The IRS crypto tax rule that wasn’t in force yet would have taken effect in 2026 had already caused a severe backlash from crypto industry players. The rule required certain decentralized exchanges (DEXs) to file reports on their customers’ gross sales of digital assets to the IRS.
According to Rep. Mike Carey of Ohio, who supported the effort to repeal the rule that was approved during the final days of the Biden administration, the rule has formally ceased to exist. As a result, the Congressional Review Act power used by lawmakers to take decisive action prevents the tax agency from ever pursuing any similar initiative. While the issue was limited in scope, it marks the first time Trump’s pro-crypto efforts have borne fruit within the US Congress, scoring a significant victory for the industry.
Positive Sentiment within Congress
During the debate in the Senate and the Congress, lawmakers in both houses agreed to reverse the IRC crypto tax rule with a strong bipartisan show, highlighting the digital asset sector’s strength within the new administration. Observers see the positive sentiment within Congress as something that could augur well for the crypto industry’s chances with similar wide-ranging issues, including the anticipated regulation targeting stablecoin issuers besides setting market rules for digital asset transactions.
Conclusion
By signing the resolution abolishing the IRS crypto tax rule targeting the DeFi sector, Trump has put a serious concern for the industry in the background. The crypto community will now be anticipating the following priority legislation in Congress: the stablecoin rule. This includes several other related pieces of legislation passed by relevant committees within the House and Senate, which are now awaiting floor votes in the respective chambers. Trump has asked lawmakers to ensure the bill is on his desk by August, meaning lawmakers could work hard to meet the timeline.
Frequently Asked Questions (FAQs)
How does the IRS crypto rule impact tax reporting for DeFi platforms?
In March 2025, the US Congress repealed the rule requiring decentralized platforms to act as brokers. After Trump signed the bill, DeFi protocols will no longer need to report transactions since the repeal has fully become law.
How should US-based crypto holders ensure they perform accurate tax reporting?
US-based crypto holders are supposed to track all their transactions, review Form 1099-DA for errors, and report gains or losses when filing taxes.
What were potential penalties for DeFi platforms that would have failed to adhere to the IRS crypto rule?
Brokers who missed deadlines or filed incorrect forms would have faced heavy fines, audits, or legal action, but now that is a thing of the past.
