Congress has begun to overturn IRS broker rules targeting Defi platforms, with Trump likely to sign on March 28th

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The US Senate will prepare to hold a final vote on March 27th to override Defi operators’ Internal Revenue Service (IRS) broker reporting rules.

According to Fox Reporter, if approved, it can be sent to President Donald Trump’s desk as early as March 28 for signature. Eleanor Terrett reported on March 25th, citing three people who are familiar with the issue.

The vote follows procedural requirements after the Senate passed the same joint resolution on March 4th with a bipartisan supermajority.

The broker rules finalized by the IRS in December 2023 aim to increase tax reporting obligations by redefineing the “broker” and including digital asset platforms that include Defi’s front-end interfaces.

Under the rules, entities classified as brokers are responsible for knowing customer (KYC) standards, monitoring user activity, and reporting transaction data in the IRS.

Community Pushback

The rules were introduced as part of the former President Joe Biden administration’s broader strategy to bridge tax gaps related to crypto transactions and increase visibility into blockchain-based financial activities.

Since its introduction, IRS rules have been the opposition focus of the industry, with developers and advocates warning that Defi infrastructure is absolutely unable to comply with the inability to implement broker-level monitoring and reporting requirements.

In December, the decision was urged Joint lawsuit By the Blockchain Association, the Defi Education Fund, and the Texas Blockchain Council, which challenges the creation of rules. The entity said the rules “will risk compromising the US digital asset sector.”

Marisa Coppel, attorney general of the Blockchain Association, said in the lawsuit that the Treasury would go beyond its statutory authority to include providers of debt transactions front-ends to expand its definition of “brokers.” She added that these interfaces do not affect transactions.

Furthermore, critics emphasize that the Defi protocol does not help expanding broker rules because it does not have centralized control or control over user funds.

If Trump signs it, the rules will formally be repealed and remove the expanded definition of brokers from IRS enforcement policy.