Keep Innovation in America Act
This bill modifies provisions enacted by the Infrastructure Investment and Jobs Act relating to the definitions of broker and digital assets and their reporting requirements.
The bill redefines broker, for tax reporting purposes, to mean any person who (for consideration) stands ready in the ordinary course of business to effect sales of digital assets at the direction of their customers.
The bill redefines digital asset to mean any digital representation of value which is recorded on a cryptographically secured distribution ledger (this revised definition eliminates the discretion of the Department of the Treasury to include similar technology in the definition of digital asset).
The bill eliminates the cash reporting requirement for digital assets (i.e., receipt of more than $10,000) but requires Treasury, in consultation with the Financial Crimes Enforcement Network and other representatives of the digital asset industry, to conduct a study of, and report on, the effect of expanding the definition of cash to include any digital asset.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1414 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 1414
To amend the Internal Revenue Code of 1986 to clarify the definition of
broker, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 7, 2023
Mr. McHenry (for himself, Mr. Torres of New York, Mr. Davidson, Mr.
Khanna, Mr. Emmer, Mr. Swalwell, Mr. Schweikert, Mr. Soto, and Mr.
Hill) introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to clarify the definition of
broker, and for other purposes.
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 ``Keep Innovation in America Act''.
SEC. 2. CLARIFICATION OF DEFINITION OF BROKER.
(a) In General.--Section 6045(c)(1)(D) of the Internal Revenue Code
of 1986 is amended to read as follows:
``(D) any person who (for consideration) stands
ready in the ordinary course of a trade or business to
effect sales of digital assets at the direction of
their customers.''.
(b) Effective Date.--The amendment made by this section shall apply
to returns required to be filed and statements required to be furnished
after December 31, 2025.
SEC. 3. REPORTING OF DIGITAL ASSETS.
(a) Brokers.--
(1) Definition of digital asset.--Section 6045(g)(3)(D) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(D) Digital asset.--The term `digital asset'
means any digital representation of value which is
recorded on a cryptographically secured distributed
ledger.''.
(2) Applicable date.--Section 6045(g)(3)(C)(iii) of such
Code is amended to read as follows:
``(iii) January 1, 2025, in the case of any
specified security which is a digital asset,
and''.
(b) Furnishing of Information.--Section 6045A(d) of such Code is
amended to read as follows:
``(d) 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 wholly controlled and 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).
Information reported by brokers under this section shall be limited to
customer information that is voluntarily provided by the customer and
held by the broker for a legitimate business purpose.''.
(c) Delayed Effective Date for Certain Information Reporting
Changes; Reversal of Certain Additions to 6050I.--Section 80603 of the
Infrastructure Investment and Jobs Act is amended--
(1) by striking subsection (b)(3), and
(2) in subsection (c), by striking ``December 31, 2023''
and inserting ``December 31, 2025''.
(d) Effective Dates.--
(1) The amendments made by subsections (a) and (b) shall
apply to returns required to be filed and statements required
to be furnished after December 31, 2025.
(2) The amendment made by subsection (c) shall take effect
as if included in the enactment of section 80603 of the
Infrastructure Investment and Jobs Act.
SEC. 4. STUDY AND REPORT ON TREATMENT OF DIGITAL ASSETS AS CASH UNDER
CERTAIN LAWS.
(a) Study.--The Secretary, in consultation with the Financial
Crimes Enforcement Network, and representatives of the digital asset
industry, organizations focused on individual privacy and civil
liberties, organizations engaged in advocacy, research or developing
standards relating to digital asset use, shall conduct a study on the
effect of expanding the definition of cash to include any digital asset
(as defined in section 6045(g)(3)(D) of the Internal Revenue Code of
1986) solely for purposes of--
(1) section 6050I of such Code, and
(2) section 5331 of title 31, United States Code.
(b) Report.--Not later than 365 days after the date of the
enactment of this Act, the Secretary shall provide to relevant
committees a report that contains all findings and determinations made
in carrying out the study under subsection (a), including an analysis
of--
(1) the interpretation of, regulations under, and
enforcement of the sections specified in paragraphs (1) and (2)
of subsection (a),
(2) the privacy and liberty rights and interests of
taxpayers and other persons affected,
(3) the cost-benefit analysis of compliance,
(4) the effect on the use of and access to digital assets
and the financial system,
(5) the effect on innovation, and
(6) the effect on the economic competitiveness of the
United States.
(c) Definitions.--For purposes of this section--
(1) Relevant committees.--The term ``relevant committees''
means--
(A) the Committee on Financial Services of the
House of Representatives,
(B) the Committee on Banking, Housing, and Urban
Affairs of the Senate,
(C) the Committee on Ways and Means of the House of
Representatives, and
(D) the Committee on Finance of the Senate.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury (or the Secretary's delegate).
SEC. 5. FINDINGS.
Congress finds the following:
(1) Advances in technology have led to the creation of
digital assets and blockchain technology that will improve the
United States financial system and create a more fair and
equitable structure for everyday Americans.
(2) The reporting requirements under current law require
digital asset market participants to adhere to standards that
are incompatible with this technology's operation. This will
hinder the development of digital assets and its underlying
technology in the United States, shifting its development
outside the United States.
(3) The Chinese Government's recent ban of cryptocurrency
transactions provides the United States an opening to further
enhance its role as the leading nation in the development of
innovative blockchain technologies. Providing clear rules for
both consumers and developers of digital assets is essential to
taking advantage of this opportunity.
(4) Miners and validators, hardware and software
developers, and protocol developers are not actual brokers and
do not collect or have reason to collect the information
required under the Infrastructure Investment and Jobs Act.
(5) It is not in the interest of American taxpayers for
Congress to create uncertainty.
(6) Consistent and accurate reporting on digital asset
transactions is necessary. Congress must work to bring legal
and regulatory certainty to the digital asset industry. Clear
rules of the road fosters technology and innovation.
(7) Any amendments made by this Act will not impact revenue
estimated from the Infrastructure Investment and Jobs Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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