Congress is expected to vote on a resolution to revoke the IRS's December broker rule, which requires software and infrastructure providers to identify users, collect personal information, and report it to the government without a warrant. Coin Center argues that this rule imposes unconstitutional burdens on software publication and contradicts the Infrastructure Investment and Jobs Act (IIJA).
Coin Center hopes for bipartisan support in revoking the rule. "The CRA Proposal Preserves Smart Tax Policy While Stopping Government Overreach," they stated. The IRS finalized the rule under authority from Congress via the IIJA but exceeded its authority according to Coin Center. In July 2024, the IRS classified crypto exchanges as brokers—a move supported by Coin Center—but in December 2024 extended this classification to software developers and infrastructure providers.
The December rule lacks statutory authority due to efforts by a bipartisan group of Senators who rewrote the definition of "broker" during IIJA's passage. Senator Wyden emphasized, “Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets."
A bipartisan group led by Senator Warner urged the IRS against overreach. A similar sentiment was echoed by Representatives urging Treasury against broad interpretations that could harm privacy and innovation.
The December rule is criticized for being inappropriate regarding privacy and civil liberties. It directs developers to change their activities from publishing software to collecting user data without warrants—likened by critics to asking novelists or telephone companies to report private details of users.
Coin Center remains optimistic about Congress undoing these policies, hoping for sensible bipartisanship in future efforts.
