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.

AccessTimeIconMay 18, 2021 at 8:00 a.m. UTC
Updated Sep 14, 2021 at 12:56 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

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.

  • 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.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.