US Congressman Buddy Carter introduces the Fair Tax Act to abolish the IRS and replace the US tax code

Key Takeaways

The Fair Tax Act proposes to replace the US tax code with a national consumption tax and eliminate the IRS.
The Act is supported by several Republicans and includes provisions that affect immigrant taxes.

Representative Earl “Buddy” Carter has proposed eliminating the Internal Revenue Service (IRS) and replacing the current US tax code with a national consumption tax through a bill known as HR 25, the Fair Tax Act.

The statute, show up on January 9, eliminate personal and corporate income taxes, death tax, gift taxes, and payroll tax, while implementing a single national consumption tax system.

One of the most surprising aspects of the Fair Tax is its proposal to eliminate the IRS, thereby simplifying tax administration and compliance for individuals and businesses.

“The Fair Tax is just that – fair. It is the only tax proposal out there that is pro-growth, simple, and allows Americans to keep every cent of their hard earned money, while eliminating the need for the IRS absolutely,” said Rev. Carter.

The bill has the support of several Republican representatives, including Andrew Clyde, John Carter, Scott Perry, and Eric Burlison, among others.

Representative Barry Loudermilk agreed with the proposal, saying:

“Hardworking Americans shouldn't need a team of lawyers or accountants to file their taxes — they need a simple system that encourages growth and innovation.”

“This legislation provides a common sense solution to eliminate the need for an armed IRS, simplify our tax code, and foster economic prosperity,” said Rev. Clyde.

The Fair Tax Act, first introduced in Congress in 1999 by former Georgia Congressman John Linder, would also require unauthorized immigrants to pay taxes consumption granted to legal US residents.

Blockchain association and DeFi organizations sue IRS over new reporting rules

Last month, the IRS published final rules require brokers to report transactions from 2027. Under the rules, which aim to ensure transparency in transactions, brokers must report gross income and taxpayer information to the agency.

Platforms that facilitate digital asset transactions, perhaps through smart contracts, are now classified as brokers. This classification aims to increase taxpayer compliance and applies to approximately 650 to 875 DeFi brokers.

The new IRS reporting rules have raised concern among crypto industry groups regarding the scope of broker definitions.

The Blockchain Association, the DeFi Education Fund, and the Texas Blockchain Council have started a lawsuit against the IRS to challenge these regulations.

Critics, including industry leaders, argue that the rules infringe on privacy, pose significant operational challenges, and could drive the growing DeFi sector out of business. over. They claim that the decentralized nature of DeFi, which has no broker-like intermediaries, should be exempted from these reporting requirements.