117 HR 5083 IH: Cryptocurrency Tax Reform Act
U.S. House of Representatives
2021-08-23
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
I
117th CONGRESS
1st Session
H. R. 5083
IN THE HOUSE OF REPRESENTATIVES
August 23, 2021
Mr. Soto introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to clarify the definition of a broker, and for other purposes.
1.

Short title
This Act may be cited as the “Cryptocurrency Tax Reform Act”.
2.

Information reporting for brokers and digital assets
(a)

Clarification of definition of broker
Section 6045(c)(1) of the Internal Revenue Code of 1986 is amended—
(1)
by striking “and” at the end of subparagraph (B),
(2)
in subparagraph (C)—
(A)
by striking “any other person who (for a consideration)” and inserting “any person who (for consideration)”, and
(B)
by striking the period at the end and inserting “, and”, and
(3)
by adding at the end the following new subparagraph:
“(D)
any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” .
(b)

Reporting of digital assets
(1)

Brokers
(A)

Treatment as specified security
Section 6045(g)(3)(B) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (iii), by redesignating clause (iv) as clause (v), and by inserting after clause (iii) the following new clause:
“(iv)
any digital asset, and”.
(B)

Definition of digital asset
Section 6045(g)(3) of such Code is amended by adding at the end the following new subparagraph:
“(D)

Digital asset
Except as otherwise provided by the Secretary, the term “digital asset” means any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.”.
(C)

Applicable date
Section 6045(g)(3)(C) of such Code is amended—
(i)
in clause (ii), by striking “and” at the end,
(ii)
by redesignating clause (iii) as clause (iv), and
(iii)
by inserting after clause (iii) the following:
“(iii)
January 1, 2023, in the case of any specified security which is a digital asset, and”.
(2)

Furnishing of information
(A)

In general
Section 6045A of such Code is amended—
(i)
in subsection (a), by striking “a security which is”, and
(ii)
by adding at the end the following:
“(b)

Return requirement for certain transfers of digital assets not otherwise subject to reporting
Any broker, with respect to any transfer (which is not part of a sale or exchange executed by such broker) during a calendar year of a covered security which is a digital asset from an account maintained by such broker to an account which is not maintained by, or an address not associated with, a person that such broker knows or has reason to know is also a broker, shall make a return for such calendar year, in such form as determined by the Secretary, showing the information otherwise required to be furnished with respect to transfers subject to subsection (a).”.
(B)

Reporting penalties
Section 6724(d)(1)(B) of such Code is amended by striking “or” at the end of clause (xxv), by striking “and” at the end of clause (xxvi), and by inserting after clause (xxvi) the following new clause:
“(xxvii)
section 6045A(d) (relating to returns for certain digital assets),”.
(C)

Treatment as cash for purposes of section 6050I
Section 6050I(d) of such Code is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting “, and”, and by inserting after paragraph (2) the following new paragraph:
“(3)
any digital asset (as defined in section 6045(g)(3)(D).” .
(c)

Effective date
The amendments made by this section shall apply to returns required to be filed, and statements required to be furnished, after December 31, 2023.
(d)

Rules of construction
(1)

Definition of broker
Nothing in this section or the amendments made by this section shall be construed to create any inference that a person described in section 6045(c)(1)(D) of the Internal Revenue Code of 1986, as added by this section, includes any person solely engaged in the business of—
(A)
validating distributed ledger transactions,
(B)
selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or
(C)
developing digital assets or their corresponding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols.
(2)

Brokers and treatment of digital assets
Nothing in this section or the amendments made by this section shall be construed to create any inference, for any period prior to the effective date of such amendments, with respect to—
(A)
whether any person is a broker under section 6045(c)(1) of the Internal Revenue Code of 1986, or
(B)
whether any digital asset is property which is a specified security under section 6045(g)(3)(B) of such Code.