CEI Joins ATR in opposition to the Internal Revenue Service’s midnight rulemaking on digital asset brokers.
Dear Member of Congress,
We, the undersigned organizations, write to express our opposition to the Internal Revenue Service’s midnight rulemaking on digital asset brokers. This rule expands the definition of “broker” to an absurd degree, capturing software developers while compromising the personal identifying information of tens of millions of consumers.
We urge you to nullify the digital asset broker rule through a joint resolution of disapproval under the Congressional Review Act, forestalling any substantially similar rulemakings in the future.
The rule expands the definition of “broker” to include software developers behind wallets that allow users to self-custody their assets and make it easier to connect to decentralized finance (“DeFi”) protocols—whether or not they do so for profit. Like ill-considered AI liability laws, this rule would make developers responsible for the potential uses of their products and reduce consumer choice, even when wallets are developed for free.
The rule also requires these industry participants to first collect and then report to the government transaction details and the personal identifying information of tens of millions of users. This would be one of the largest-ever transfers of private data and would centralize yet more power in the hands of the IRS, an agency with a sordid history of mishandling and abusing taxpayer information. One need look no further than the recent prosecution of IRS contractor Charles Littlejohn, who stole private taxpayer files that were subsequently leaked to the press.
In addition to dramatically infringing on the privacy and security of Americans, the rule disincentivizes innovation by turning developers into brokers, imposes reporting requirements that could crush crypto start-ups, and ignores clear congressional intent. The authorizing statute defines brokers as parties “effectuating transfers on behalf of another person.” Stretching this to include those who create tools that facilitate commerce is an absurd abuse of the statute and a naked power-grab by the IRS.
For these reasons, we urge you to nullify this rule through a joint resolution of disapproval under the Congressional Review Act.
Sincerely,
Grover Norquist
President
Americans for Tax Reform
James Erwin
Interim Director
Shareholder Advocacy Forum
Chuck Muth
President
Citizen Outreach
Tom Hebert
Executive Director
Open Competition Center
Seton Motley
President
Less Government
Lorenzo Montanari
Executive Director
Property Rights Alliance
Yael Ossowski
Deputy Director
Consumer Choice Center
Matthew Kandrach
President
Consumer Action for a Strong Economy
Brent Gardner
Chief Government Affairs Officer
Americans for Prosperity
Dick Patten
President
American Business Defense Council
George Landrith
President
Frontiers of Freedom
Karen Kerrigan
Policy President & CEO
Small Business & Entrepreneurship Council
Paul Gessing
President
Rio Grande Foundation
Ryan Ellis
President
Center for a Free Economy
David Williams
President
Taxpayer Protection Alliance
Steve Pociask
Chief Executive Officer
American Consumer Institute
John Berlau
Director of Finance Policy
Competitive Enterprise Institute
Daniel J. Erspamer
CEO
Pelican Institute