Virtual Currency Tax Reform Act

Virtual Currency Tax Reform Act - Directs the Internal Revenue Service (IRS) to treat virtual currencies as a foreign currency for federal tax purposes. Defines "virtual currency" as a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.

Imposes a five-year moratorium on any capital gains tax on virtual currencies.

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4602 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4602

To change the tax status of virtual currencies from property to foreign 
                                currency


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                    IN THE HOUSE OF REPRESENTATIVES

                              May 7, 2014

 Mr. Stockman introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To change the tax status of virtual currencies from property to foreign 
                                currency

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Virtual Currency Tax Reform Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

    Congress finds that classifying virtual currencies as property 
subjects users to capital gains tax on any transaction using the 
virtual currency based on any gain or loss relative to the change in 
the virtual currency's value from the time of purchase.

SEC. 3. DEFINITIONS.

    ``Virtual currency'' is a digital representation of value that 
functions as a medium of exchange, a unit of account, and/or a store of 
value.

SEC. 4. GENERAL AUTHORIZATION.

    The Internal Revenue Service shall treat virtual currencies as a 
foreign currency for Federal tax purposes.

SEC. 5. MORATORIUM.

            (1) For a period of five years following the date of the 
        enactment of this Act, the Federal Government shall not impose, 
        assess, collect, or attempt to collect capital gains tax on 
        virtual currencies.
            (2) Nothing in this Act shall prevent, impair or impede the 
        operation of any government agency, authority, or 
        instrumentality, whether of the Federal Government or of any 
        State or political subdivision thereof, to enforce currently 
        existing criminal, civil, or taxation statutes and regulations.

SEC. 6. EFFECTIVE DATE.

    The provisions of this Act shall take effect at the beginning of 
the fiscal year following enactment.
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