The crypto industry, particularly brokers, is getting a giant lift from Texas Senator Ted Cruz this week. In line with an Axios report, Cruz will use the Congressional Review Act (CRA) in the following few days to challenge an existing IRS tax rule on crypto income reporting. This IRS reporting rule has generated loads of pushback from the crypto community, resulting in the filing of charges.
The rule requires full reporting of income generated from cryptos and expands the “broker’ definition, which, in line with critics, doesn’t reflect the true nature of decentralization.
Cruz’s reported plan to challenge this IRS rule was met with enthusiasm by the crypto community and seen by many as a principled stand against government interference.
IRS Tax Rule And ‘Broker’ Definition Stifle Innovation, Critics Say
Senator Cruz’s latest move relies on the crypto community’s lingering complaints over the IRS’s unfair tax crypto rules. Critics slammed the agency’s use and definition of “broker” under the Administrative Procedure Act, which they see as arbitrary and too general. This arbitrary definition and the IRS overreach into the blockchain industry were met with resistance by top crypto players and firms.
In response, three groups, the DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council, have sued the agency over these modified rules.
The petitioners argued that the rule failed to understand the decentralized nature of cryptocurrency and blockchain. They added that many crypto participants don’t have any access to the information that the agency is requesting.
Cruz To Use The CRA To Challenge These IRS Rules
Many see Sen. Cruz’s plan to make use of the CRA as a welcome development and signal the community’s rejection of the federal government’s interference. The CRA allows policymakers to stop federal regulations through an easy majority in each houses, which should be accomplished inside 60 business days. In line with the identical Axios report, Cruz is confident the rule will likely be challenged and thrashed.
The plan has gained loads of support from Republican senators, including Senator Cynthia Lummis of Wyoming, Tim Sheehy of Montana, and Bill Hagerty of Tenessee. Senator Lummis is a well known supporter of Bitcoin and the blockchain and filed a bill last 12 months recommending the creation of a Bitcoin stockpile.
A Questionable Reporting Rule
The crypto community’s complaints and cases are based on an IRS reporting rule within the 2021 infrastructure bill. In line with the tax rule, crypto brokers must report their income from digital assets like Bitcoin. For a lot of crypto supporters, the rule effectively forced them to serve the state with money earned from innovation.
In line with Ron Hammond of the Blockchain Association, the rule has grow to be politically charged and was a rallying point for a lot of individuals. For Senator Cruz, the challenge represents his support for individual rights against the federal government’s intrusion.
Featured image from Pexels, chart from TradingView