I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Keep Innovation in 

5 America Act’’. 


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1 SEC. 2. CLARIFICATION OF DEFINITION OF BROKER. 

2 (a) IN GENERAL.—Section 6045(c)(1)(D) of the In3 ternal Revenue Code of 1986 is amended to read as fol4 lows: 

5 ‘‘(D) any person who (for consideration) 

6 stands ready in the ordinary course of a trade 

7 or business to effect sales of digital assets at 

8 the direction of their customers.’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 this section shall apply to returns required to be filed and 

11 statements required to be furnished after December 31, 

12 2025. 

13 SEC. 3. REPORTING OF DIGITAL ASSETS. 

14 (a) BROKERS.— 

15 (1) DEFINITION OF DIGITAL ASSET.—Section 

16 6045(g)(3)(D) of the Internal Revenue Code of 1986 

17 is amended to read as follows: 

18 ‘‘(D) DIGITAL ASSET.—The term ‘digital 

19 asset’ means any digital representation of value 

20 which is recorded on a cryptographically se21 cured distributed ledger.’’. 

22 (2) APPLICABLE DATE.—Section 

23 6045(g)(3)(C)(iii) of such Code is amended to read 

24 as follows: 


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1 ‘‘(iii) January 1, 2025, in the case of 

2 any specified security which is a digital 

3 asset, and’’. 

4 (b) FURNISHING OF INFORMATION.—Section 

5 6045A(d) of such Code is amended to read as follows: 

6 ‘‘(d) RETURN REQUIREMENT FOR CERTAIN TRANS7 FERS OF DIGITAL ASSETS NOT OTHERWISE SUBJECT TO

8 REPORTING.—Any broker, with respect to any transfer 

9 (which is not part of a sale or exchange executed by such 

10 broker) during a calendar year of a covered security which 

11 is a digital asset from an account wholly controlled and 

12 maintained by such broker to an account which is not 

13 maintained by, or an address not associated with, a person 

14 that such broker knows or has reason to know is also a 

15 broker, shall make a return for such calendar year, in such 

16 form as determined by the Secretary, showing the infor17 mation otherwise required to be furnished with respect to 

18 transfers subject to subsection (a). Information reported 

19 by brokers under this section shall be limited to customer 

20 information that is voluntarily provided by the customer 

21 and held by the broker for a legitimate business purpose.’’. 

22 (c) DELAYED EFFECTIVE DATE FOR CERTAIN IN23 FORMATION REPORTING CHANGES; REVERSAL OF CER24 TAIN ADDITIONS TO 6050I.—Section 80603 of the Infra25 structure Investment and Jobs Act is amended— 


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1 (1) by striking subsection (b)(3), and 

2 (2) in subsection (c), by striking ‘‘December 31, 

3 2023’’ and inserting ‘‘December 31, 2025’’. 

4 (d) EFFECTIVE DATES.— 

5 (1) The amendments made by subsections (a) 

6 and (b) shall apply to returns required to be filed 

7 and statements required to be furnished after De8 cember 31, 2025. 

9 (2) The amendment made by subsection (c) 

10 shall take effect as if included in the enactment of 

11 section 80603 of the Infrastructure Investment and 

12 Jobs Act. 

13 SEC. 4. STUDY AND REPORT ON TREATMENT OF DIGITAL 

14 ASSETS AS CASH UNDER CERTAIN LAWS. 

15 (a) STUDY.—The Secretary, in consultation with the 

16 Financial Crimes Enforcement Network, and representa17 tives of the digital asset industry, organizations focused 

18 on individual privacy and civil liberties, organizations en19 gaged in advocacy, research or developing standards relat20 ing to digital asset use, shall conduct a study on the effect 

21 of expanding the definition of cash to include any digital 

22 asset (as defined in section 6045(g)(3)(D) of the Internal 

23 Revenue Code of 1986) solely for purposes of— 

24 (1) section 6050I of such Code, and 


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1 (2) section 5331 of title 31, United States 

2 Code. 

3 (b) REPORT.—Not later than 365 days after the date 

4 of the enactment of this Act, the Secretary shall provide 

5 to relevant committees a report that contains all findings 

6 and determinations made in carrying out the study under 

7 subsection (a), including an analysis of— 

8 (1) the interpretation of, regulations under, and 

9 enforcement of the sections specified in paragraphs 

10 (1) and (2) of subsection (a), 

11 (2) the privacy and liberty rights and interests 

12 of taxpayers and other persons affected, 

13 (3) the cost-benefit analysis of compliance, 

14 (4) the effect on the use of and access to digital 

15 assets and the financial system, 

16 (5) the effect on innovation, and 

17 (6) the effect on the economic competitiveness 

18 of the United States. 

19 (c) DEFINITIONS.—For purposes of this section— 

20 (1) RELEVANT COMMITTEES.—The term ‘‘rel21 evant committees’’ means— 

22 (A) the Committee on Financial Services 

23 of the House of Representatives, 

24 (B) the Committee on Banking, Housing, 

25 and Urban Affairs of the Senate, 


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1 (C) the Committee on Ways and Means of 

2 the House of Representatives, and 

3 (D) the Committee on Finance of the Sen4 ate. 

5 (2) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of the Treasury (or the Secretary’s 

7 delegate). 

8 SEC. 5. FINDINGS. 

9 Congress finds the following: 

10 (1) Advances in technology have led to the cre11 ation of digital assets and blockchain technology 

12 that will improve the United States financial system 

13 and create a more fair and equitable structure for 

14 everyday Americans. 

15 (2) The reporting requirements under current 

16 law require digital asset market participants to ad17 here to standards that are incompatible with this 

18 technology’s operation. This will hinder the develop19 ment of digital assets and its underlying technology 

20 in the United States, shifting its development out21 side the United States. 

22 (3) The Chinese Government’s recent ban of 

23 cryptocurrency transactions provides the United 

24 States an opening to further enhance its role as the 

25 leading nation in the development of innovative 


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1 blockchain technologies. Providing clear rules for 

2 both consumers and developers of digital assets is 

3 essential to taking advantage of this opportunity. 

4 (4) Miners and validators, hardware and soft5 ware developers, and protocol developers are not ac6 tual brokers and do not collect or have reason to col7 lect the information required under the Infrastruc8 ture Investment and Jobs Act. 

9 (5) It is not in the interest of American tax10 payers for Congress to create uncertainty. 

11 (6) Consistent and accurate reporting on digital 

12 asset transactions is necessary. Congress must work 

13 to bring legal and regulatory certainty to the digital 

14 asset industry. Clear rules of the road fosters tech15 nology and innovation. 

16 (7) Any amendments made by this Act will not 

17 impact revenue estimated from the Infrastructure 

18 Investment and Jobs Act. 

Æ 


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