‘Safe Harbor for Taxpayers with Forked Assets Act’ Reintroduced in Congress by Tom Emmer

  • Congressman Emmer first introduced the bill back in 2018. However, the proposed legislation soon lost a lot of its momentum after it was introduced into the U.S. House Committee on Ways and Means.
  • In an interview given by Emmer a few months back, he made it clear that he was already working to reintroduce a new iteration of his aforementioned bill.

According to an all new report released recently, Congressman Tom Emmer has reintroduced a bill — called the “Safe Harbor for Taxpayers with Forked Assets Act” — that is broadly designed to reduce some of the tax burdens that are currently placed on a large number of digital currency investors. To be a bit more specific, we can see that the above mentioned bill seeks to bring more clarity on the subject of crypto hard forks.

Emmer’s proposed legislation hopes to provide taxpayers with certain guarantees/safeguards in case their altcoins undergo a hard-fork. Simply put, the bill will allow investors to avoid facing any major penalties if they fail to pay their taxes on forked assets.

“The bill would provide assurance for taxpayers that they will not be penalized for reporting this information to the IRS. The prohibition on penalties would continue until the IRS establishes a set of rules regarding the tax treatment of forked cryptocurrencies. “

Additionally, the bill also seeks to push the IRS to provide crypto investors with better definitions in relation to technical terms such as hard-forked assets, altcoins etc.

“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.”

According to James Foust — a senior research fellow at Coin Center — Emmer’s vision is quite laudable, and if passed, holds the potential to revamp how crypto assets in general are taxed by the government.

In closing out this piece, it should be mentioned that Emmer’s bill is not the only piece of legislation that is seeking to gain more clarity on the subject of crypto from the government. For example, the Token Taxonomy Act too has been devised to:

‘categorically define which tokens should come under the purview of existing federal securities laws.’

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