U.S. House Overturns IRS Rule Targeting DeFi Platforms in Bipartisan Vote

The U.S. House of Representatives voted 292-132 on Tuesday to overturn an IRS rule that would have required decentralized finance (DeFi) platforms to collect and report taxpayer information. This marks a significant bipartisan pushback against crypto regulations finalized in the final days of the Biden administration.

The vote saw 76 Democrats break ranks to join critics of the rule, who argued that the requirements would be technically impossible for DeFi protocols to meet.

House Ways and Means Committee Chairman Jason Smith (R-MO) described the rule as both “unfair” and “unworkable” during the floor debate. “There are real questions that the rule can ever even be administered,” Smith stated. He added in a prepared statement delivered to the House, “DeFi platforms do not and cannot even collect the information from users needed to implement this rule. Their software never controls the digital assets.”

Representative Mike Carey (R-OH) introduced the joint resolution on January 21, 2025. An update from the Office of the Speaker confirmed the final vote count.

The House decision follows similar bipartisan backing in the Senate last week and builds on earlier discussions in the House from late February, where lawmakers raised concerns that the rule contained “burdensome requirements.”

The rescinded IRS regulation aimed to expand the definition of “broker” to include DeFi platforms, requiring them to file Form 1099-DA tax documents. However, most DeFi protocols lack the technical capacity to collect and report such user data.

Kristin Smith, CEO of the Blockchain Association, called the supermajority vote an “encouraging sign of a new era for crypto in Washington.” Still, some Democrats opposed the resolution, warning about the potential for tax evasion and illicit activity. Representative Lloyd Doggett (D-TX) criticized the measure as “special interest legislation” that could be “exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”

The resolution invoked the Congressional Review Act, granting Congress the ability to overturn newly finalized federal regulations. If enacted into law, it would bar the IRS from issuing similar rules in the future without direct authorization from Congress.

The joint resolution now heads back to the Senate for a second vote under budgetary rules before proceeding to President Trump’s desk, where it is widely expected to be signed into law.