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US Congressman Reintroduces Bill With Tax Protections for Investors With Forked Crypto Assets
The legislation would outlaw penalizing taxpayers until the IRS clarifies its policies.
By James Rubin
Updated Sep 14, 2021, 12:56 p.m. Published May 18, 2021, 8:00 a.m.
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One of Congress’s biggest advocates for cryptocurrency reintroduced legislation Monday that would protect taxpayers from penalties on certain gains or losses on forked assets.
STORY CONTINUES BELOW
- Rep. Tom Emmer (R-Minn.) first presented the Safe Harbor for Taxpayers with Forked Assets Act in 2018 and then again in 2019 to address what critics have viewed as a gap in the IRS’ approach to taxing income derived from hard forks.
- In October 2019 guidance, the Internal Revenue Service said any new cryptocurrency generated by hard forks (when blockchains split into two networks, each with a native asset) would count as taxable income.
- The IRS' determination followed a letter earlier that year from Emmer and other lawmakers asking the agency to clarify its policies on cryptocurrency.
- In a press release Monday, Emmer said the latest IRS guidance has "unfairly punished" those investing in an emerging technology, adding that "what has been issued by the IRS so far is not pragmatic."
- Emmer is the ranking Republican on the House Financial Services Committee's Task Force on Financial Technology.
Read more: IRS Taps TaxBit to Audit Bulk Crypto Transactions
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Crypto group counters Wall Street bankers with its own stablecoin principles for bill
After the bankers shared a document at the White House demanding a total ban on stablecoin yield, the crypto side answers that it needs some stablecoin rewards.
What to know:
- The U.S. Senate's crypto market structure bill has been waylaid by a dispute over something that's not related to market structure: yield on stablecoins.
- The Digital Chamber is offering a response to a position paper circulated earlier this week by bankers who oppose stablecoin yield.
- The crypto group's own principles documents argues that certain rewards are needed on stablecoin acvitity, but that the industry doesn't need to pursue products that directly threaten bank deposits business.
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