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

Rep. 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 H.R. 25, the Fair Tax Act.

The legislation, unveiled on Jan. 9, would eliminate all personal and corporate income taxes, death tax, gift taxes, and payroll tax, while implementing a single national consumption tax system.

One of the most noteworthy 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 exactly 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 altogether,” Rep. Carter stated.

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

Rep. Barry Loudermilk endorsed the proposal, stating:

“Hardworking Americans should not need a team of lawyers or accountants to fill out their taxes – they need a simple system that encourages growth and innovation.”

“This legislation provides a commonsense solution to eliminate the need for the weaponized IRS, simplify our tax code, and foster economic prosperity,” Rep. Clyde said.

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

Blockchain association and DeFi groups sue IRS over new reporting rules

Last month, the IRS published final regulations requiring brokers to report transactions from 2027. Under the rules, which are aimed at ensuring transparency in transactions, brokers must report gross proceeds and taxpayer information to the agency.

Platforms that facilitate digital asset transactions, possibly through smart contracts, are now classified as brokers. This classification aims to enhance taxpayer compliance and applies to an estimated 650 to 875 DeFi brokers.

The IRS’s new reporting rules have sparked concern among crypto industry groups about the scope of broker definitions.

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

Critics, including industry leaders, argue that the rules infringe on privacy, impose major operational challenges, and may drive the burgeoning DeFi sector overseas. They assert that the decentralized nature of DeFi, which lacks broker-like intermediaries, should exempt it from such reporting requirements.