#Cruz Challenges IRS Crypto Tax Rules#

U.S. Senator Ted Cruz plans to challenge the Internal Revenue Service (IRS) on its new crypto tax rules, which would require certain decentralized finance (DeFi) brokers to report gross proceeds from transactions. Cruz is set to introduce a Congressional Review Act (CRA) resolution next week to overturn the rule. Finalized in late December, the rule requires “front-end service providers” that interact directly with users to collect and report user information, such as names and addresses, even going as far as to require the submission of 1099 forms. Critics have argued that the rule stifles innovation, distorts the decentralized finance landscape, and negatively impacts industry development. The Blockchain Association and other groups have filed a lawsuit alleging the requirement could cripple the industry. Cruz’s move is seen as a procedural tactic, as well as a principled stand against government overreach into the realm of free enterprise and technological innovation. The regulations have sparked severe criticism from the cryptocurrency industry, which has condemned them as arbitrarily expanding the scope of the term “broker,” stifling innovation, and punishing those who dare to challenge the traditional system.