The IRS’ midnight broker rule still targets software providers with unfit and unconstitutional KYC requirementsIt has become a quadrennial holiday tradition in crypto policy for the outgoing administration to release a civil-liberties-damaging rulemaking at the last possible moment, the midnight period before a new President of the opposite party takes office. This time around it is the IRS announcing a final rule on non-custodial “brokers” and their obligations for third-party tax reporting.
Last July we thought we might have caught a break in this broker saga; the IRS released a partial final rule covering only trusted intermediaries. Ideally, that would have been the end of it, but—like the Terminator—this Christmas the non-custodial rulemaking is back!