On Tuesday, Congressman Tom Emmer reintroduced cryptocurrency legislation that would provide safe harbor protection for taxpayers with digital assets, until the Internal Revenue Service provides more clarity on reporting gains and losses from digital currency forks.
In a press release announcing the move, Emmer’s office described the intent behind the Safe Harbor for Taxpayers with Forked Assets Act:
The bill is a reasonable way to insulate taxpayers from potential liabilities that are no fault of their own, stemming primarily from the present lack of clear guidance on forks from the IRS. Taxpayers are only able to comply with tax laws when the law is clear and individuals that attempt to report these assets have been unfairly targeted. Until the IRS provides specific guidance regarding the appropriate means of reporting them, these individuals should receive a safe harbor.
The press release noted that the IRS has issued no guidance about cryptocurrency assets since its 2014 decision to define digital assets as property for tax purposes. Emmer was one of 21 representatives who wrote the IRS commissioner earlier this year, requesting that the agency provide new and updated guidance for taxpayers. According to Emmer, Congress’ role is clear:
"Legislators should be embracing emerging technologies and providing a clear regulatory system that allows them to flourish in the United States. Taxpayers suffering from the uncertainty of tax guidance are being unfairly punished for investing in an emerging technology. This safe harbor will protect the taxpayers until the IRS addresses this important issue.”