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Encryption legislation, forked coins, forked cryptocurrencies, IRS, safe harbor, taxation, tax bills, Tom Emmer, U.S. cryptocurrency regulations, U.S. legislators, U.S. regulations
US Congressman Tom Emmer is pushing for safe harbor legislation to protect taxpayers who use forked coins. A bill called the “Safe Harbor Act for Taxpayers Using Forked Assets in 2021” has been introduced to prohibit “taxpayers’ attempts to report certain “forked assets” to “forked assets” before the IRS has issued sufficient guidance on doing so. Some penalties for gains and losses.
Congressman Tom Emmer’s office announced this week that Congressmen had introduced a bill entitled “The Safe Harbor Act for Taxpayers Using Forked Assets of 2021.” The bill aims to prohibit “imposing fines on taxpayers who attempt to report certain gains and losses on “forked assets” until the IRS issues adequate guidance on how to do so.”
The announcement explained: “The bill clearly states that the receipt of forked virtual currency may not constitute a taxable event and creates a safe harbor. The IRS shall not impose fines or fees on taxpayers with forked assets unless They provide clear and consistent guidance on how the forked assets should be managed.” It details:
In the absence of unanimous guidance from the IRS, the regulation aims to isolate taxpayers who are understandable and may suffer potential tax burdens and fines.
After the introduction of the bill, Congressman Emmer issued a statement emphasizing that “Like other federal agencies, the IRS must keep up with the rapid development of technology, otherwise there is a risk of losing the U.S. innovation leadership.”
Emer said: “We should embrace emerging technologies and provide a clear regulatory system to enable innovation to flourish in the United States.”
Taxpayers who lack tax guidance are unfairly punished for investing in emerging technologies. So far, the content published by the IRS is not practical, nor does it support or participate in the technology.
The U.S. Internal Revenue Service first issued encryption guidelines in 2014, treating cryptocurrencies as property. Congressman Emmer originally introduced the “Use of Forked Assets to Provide Taxpayers with a Safe Harbor Act” in 2018. In April of the following year, Emmer and 20 members of Congress sent a letter to the Internal Revenue Service (IRS) urging it to provide more guidance.
In October last year, the US Internal Revenue Service issued guidelines stating that the receipt of forked virtual currency is a taxable event. However, members of Congress believe that taxpayers usually automatically receive forked coins at the moment of the fork, unknowingly or unknowingly. He concluded:
The result is a tax policy that has imposed an additional tax burden on taxpayers who have not yet realized any changes. In fact, they may not be aware of this new tax burden.
What do you think of the bill? Let us know in the comments section below.
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