#Cruz Challenges Crypto Tax Rules#

U.S. Senator Ted Cruz plans to challenge the Internal Revenue Service's rules on crypto taxes, which require certain decentralized finance (DeFi) brokers to report gross transaction revenue. Cruz is planning to introduce a Congressional Review Act (CRA) resolution next week in an attempt to overturn the rule. The rule, which was finalized in late December, requires "front-end service providers" that interact directly with users to collect and report user information, such as names and addresses, and even file 1099 forms. Critics argue the rule stifles innovation, distorts the concept of decentralized finance, and could cripple the crypto industry. Cruz's move is seen as a procedural tactic, but also a statement of principle, against government overreach into the realm of free enterprise and technological innovation. The regulations have drawn sharp criticism from the cryptocurrency industry, which has decried the arbitrary expansion of the term "broker" and is suing over the rules. The debate underscores tensions over the Biden administration's heavy-handed approach to regulating crypto.