Summary — H.J. Res. 25 / Public Law No. 119‑5

Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the IRS rule “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales”

Overview / Purpose

H.J. Res. 25 is a joint resolution under the Congressional Review Act (CRA) that disapproves and nullifies an Internal Revenue Service (IRS) final rule (T.D. 10021; 89 Fed. Reg. 106928, Dec. 30, 2024) titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.” The resolution declares the rule to have no force or effect. The resolution became law on April 10, 2025 (Public Law No. 119‑5), after passage in the House and Senate and signature by the President.

Background

• The IRS final rule implemented reporting requirements for persons defined as “brokers” who regularly provide services effectuating digital asset sales (commonly addressing certain DeFi/front‑end service providers).
• The rule would have required such brokers to file a Form 1099‑DA and disclose taxpayer identifiers and transaction financial details for digital asset trades, pursuant to statutory authority in the Infrastructure Investment and Jobs Act.
• Opponents argued the rule imposed unlawful and unworkable compliance burdens (particularly on DeFi platforms and software developers that do not collect the required information), could chill innovation, and would massively increase data submitted to the IRS.

Key Provisions of the Joint Resolution

• Disapproves the IRS rule published Dec. 30, 2024 (89 Fed. Reg. 106928).
• States the rule “shall have no force or effect,” effectively treating it as though it had never taken effect under the CRA.

Who is affected

• DeFi front‑end service providers and other persons that would have been classified as “brokers” responsible for reporting digital asset transactions.
• Users/participants in digital asset transactions who would have been subject to additional IRS information reporting.
• The IRS and federal tax administration, which would not receive the reporting stream envisioned by the rule.
• Software developers, entrepreneurs, and the digital asset industry broadly (regulatory/compliance implications).

Legislative and Procedural Timeline

• Introduced in the House: Jan. 21, 2025 (referred to Ways & Means).
• Reported by House Ways & Means: H. Rept. 119‑7 (Feb. 28, 2025); committee vote 26–16.
• House passage: Mar. 11, 2025 — Passed 292–132–1 (Roll No. 71).
• Received in Senate: Mar. 12, 2025; Senate passage: Mar. 26, 2025 — Passed 70–28 (Record Vote 151).
• Presented to President: Apr. 1, 2025; Signed into law: Apr. 10, 2025 (Public Law No. 119‑5).

Potential Impact

• Eliminates the immediate compliance obligation the IRS rule would have imposed (including Form 1099‑DA reporting).
• Reduces new taxpayer reporting flowing to the IRS for digital asset trades, which could affect tax administration and enforcement of digital asset tax rules.
• Removes a regulatory requirement that stakeholders argued was impracticable for many DeFi platforms to meet.
• Under the CRA, the disapproved rule cannot be reissued in “substantially the same” form without subsequent congressional authorization.

Sponsors and Related Measures

• Primary sponsor in the House: Rep. Mike Carey; multiple cosponsors.
• Related/companion measures included H.Res. 211 and S.J.Res. 3.