A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales".

Bill Number: S.J.Res. 3
Origin Chamber: Senate
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Passed Senate
Latest Action: 2025-03-12: Message received in Senate: Returned to the Senate pursuant to the provisions of H.Res. 212.
Last Updated: 2026-06-09T21:56:03Z

AI-Generated Summary

Purpose

This joint resolution (S.J. Res. 3) aims to block a specific rule issued by the Internal Revenue Service (IRS) that would require brokers handling digital asset sales—such as cryptocurrencies—to report gross proceeds from those transactions to the IRS. By disapproving the rule, Congress prevents it from taking effect, using a process known as the Congressional Review Act (CRA), which allows lawmakers to overturn certain federal agency regulations.

Key Provisions

Disapproval of the Rule: The resolution explicitly disapproves the IRS rule titled "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales," published in the Federal Register on December 30, 2024 (89 Fed. Reg. 106928).
Nullification: The disapproved rule is declared to have "no force or effect," meaning it cannot be implemented or enforced.
Legislative Process: Passed by the Senate on March 4, 2025; requires House approval and presidential signature (or veto override) to become law.

Significant Changes to Existing Law

This resolution does not amend statutes but invokes the CRA (chapter 8 of title 5, U.S. Code) to override an agency rule finalized under existing tax laws, such as the Internal Revenue Code.
It halts new reporting requirements that would have expanded IRS oversight of digital asset transactions, similar to reporting for traditional securities, without altering the underlying tax obligations on gains from these assets.

Potential Impacts

On Government Agencies: The IRS loses authority to enforce the new reporting rule, potentially complicating efforts to track unreported digital asset income and reducing tax compliance tools. This could strain IRS resources if alternative tracking methods are needed.
On Citizens: Taxpayers engaging in digital asset sales (e.g., cryptocurrency trading) face no new mandatory reporting from brokers, which may simplify transactions but could lead to increased IRS audits or underreporting risks for individuals.
On International Relations: Minimal direct impact, though it might signal U.S. regulatory leniency on digital assets, potentially influencing global crypto markets or bilateral tax information-sharing agreements.

Main Stakeholders Affected

Brokers and Platforms: Digital asset service providers (e.g., cryptocurrency exchanges like Coinbase) are relieved from new compliance costs and paperwork for reporting user transactions.
Taxpayers and Investors: Individuals and businesses trading digital assets benefit from reduced reporting burdens but may face indirect effects like potential future IRS scrutiny.
Internal Revenue Service (IRS): Directly impacted as the rule's creator, limiting its ability to modernize tax reporting for emerging financial technologies.
Congress and Taxpayers Generally: Reinforces congressional control over agency actions, potentially affecting broader tax enforcement priorities.

Notable Legal, Constitutional, or Political Implications

Legal: Upholds the CRA as a tool for congressional oversight of executive branch regulations, ensuring rules do not exceed statutory authority without legislative buy-in. The rule's nullification prevents legal challenges to its validity.
Constitutional: Aligns with separation of powers by allowing Congress to check agency rulemaking, though it could spark debates on the balance between legislative intent and administrative expertise in tax policy.
Political: Highlights partisan divides on digital asset regulation; disapproval may reflect concerns over privacy, innovation stifling, or overreach in IRS authority, setting a precedent for future CRA uses in fintech areas. No broader constitutional challenges are evident in the text.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Cruz, Ted [R-TX]

Cosponsors (14)

Sen. Lummis, Cynthia M. [R-WY], Sen. Hagerty, Bill [R-TN], Sen. Tillis, Thomas [R-NC], Sen. Sheehy, Tim [R-MT], Sen. Budd, Ted [R-NC], Sen. Moreno, Bernie [R-OH], Sen. Curtis, John R. [R-UT], Sen. Cotton, Tom [R-AR], Sen. Lee, Mike [R-UT], Sen. Banks, Jim [R-IN], Sen. Daines, Steve [R-MT], Sen. Blackburn, Marsha [R-TN], Sen. Scott, Tim [R-SC], Sen. McCormick, David [R-PA]

Recent Actions

2025-03-12: Message received in Senate: Returned to the Senate pursuant to the provisions of H.Res. 212.
2025-03-11: Papers returned to Senate pursuant to H. Res. 212
2025-03-10: Held at the Desk
2025-03-10: Received in the House
2025-03-06: Message on Senate action sent to the House.
2025-03-04: Passed Senate without amendment by Yea-Nay Vote. 70 - 27. Record Vote Number: 102. (text: CR S1488) (Roll call 102)
2025-03-04: Passed/agreed to in Senate: Passed Senate without amendment by Yea-Nay Vote. 70 - 27. Record Vote Number: 102. (Roll call 102)
2025-03-04: Measure laid before Senate by motion. (consideration: CR S1471, S1477, S1485-1488)
2025-03-04: Motion to proceed to consideration of measure agreed to in Senate by Yea-Nay Vote. 70 - 28. Record Vote Number: 101. (CR S1470-1471) (Roll call 101)
2025-02-12: Placed on Senate Legislative Calendar under General Orders. Calendar No. 11.
2025-02-12: Senate Committee on Finance discharged, by petition, pursuant to 5 U.S.C. 802(c).
2025-02-12: Senate Committee on Finance discharged, by petition, pursuant to 5 U.S.C. 802(c).
2025-01-21: Read twice and referred to the Committee on Finance.
2025-01-21: Introduced in Senate

Bill Versions

Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales. — issued 2025-03-04 — PDF (2 pages)
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales. — issued 2025-01-21 — PDF (2 pages)
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales. — issued 2025-02-12 — PDF (4 pages)