I 

117TH CONGRESS 

1ST SESSION H. R. 3273 

To provide for the tax treatment of forked convertible virtual currency. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 17, 2021 

Mr. EMMER (for himself and Mr. SOTO) introduced the following bill; which 

was referred to the Committee on Ways and Means 

A BILL 

To provide for the tax treatment of forked convertible virtual 

currency. 

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 ‘‘Safe Harbor for Tax5 payers with Forked Assets Act of 2021’’. 

6 SEC. 2. TAX TREATMENT OF FORKED CONVERTIBLE VIR7 TUAL CURRENCY. 

8 (a) EXCLUSION FROM GROSS INCOME.—Part III of 

9 subchapter B of chapter 1 of the Internal Revenue Code 

10 of 1986 is amended by inserting after section 139H the 

11 following new section: 


kjohnson on DSK79L0C42PROD with BILLS
2 

•HR 3273 IH

1 ‘‘SEC. 139I. EXCLUSION OF CONVERTIBLE VIRTUAL CUR2 RENCY RECEIVED IN A HARD FORK. 

3 ‘‘(a) IN GENERAL.—No amount shall be included in 

4 gross income by reason of the receipt of any forked con5 vertible virtual currency. 

6 ‘‘(b) FORKED CONVERTIBLE VIRTUAL CURRENCY.— 

7 For purposes of this section— 

8 ‘‘(1) FORKED CONVERTIBLE VIRTUAL CUR9 RENCY.—The term ‘forked convertible virtual cur10 rency’ means, with respect to any taxpayer, any con11 vertible virtual currency to which the taxpayer be12 comes entitled by reason of a hard fork. 

13 ‘‘(2) CONVERTIBLE VIRTUAL CURRENCY.—The 

14 term ‘convertible virtual currency’ means any digital 

15 representation of value that— 

16 ‘‘(A) functions as a medium of exchange, a 

17 unit of account, or a store of value; 

18 ‘‘(B) does not have legal tender status; and 

19 ‘‘(C) has an ascertainable equivalent value 

20 in legal tender or is used as a substitute for 

21 legal tender. 

22 ‘‘(3) HARD FORK.—The term ‘hard fork’ 

23 means, with respect to any convertible virtual cur24 rency, any material change in the shared digital 

25 ledger which is used to verify by consensus trans26 actions in such currency if such change results in 


kjohnson on DSK79L0C42PROD with BILLS
3 

•HR 3273 IH

1 the maintenance of independent shared digital ledg2 ers with respect to such currency. 

3 ‘‘(4) CONSTRUCTIVE RECEIPT.—Receiving 

4 forked virtual currency shall include any right to re5 ceive (or other constructive of) such virtual cur6 rency.’’. 

7 (b) SAFE HARBOR PERIOD FOR PENALTIES RELAT8 ING TO TAX TREATMENT OF HARD-FORKED VIRTUAL

9 CURRENCY.— 

10 (1) IN GENERAL.—In the case of a taxpayer 

11 who during the applicable period receives forked con12 vertible virtual currency— 

13 (A) no penalties or additions to tax under 

14 part II of subchapter A of chapter 68 of the In15 ternal Revenue Code of 1986 shall apply with 

16 respect to any portion of an underpayment or 

17 understatement of tax that is attributable to 

18 the taxpayer’s attempt during such period to 

19 comply with the tax treatment under such Code 

20 of the receipt of such virtual currency (or any 

21 disposition of such currency during such pe22 riod); and 

23 (B) no penalties or additions to tax under 

24 sections 6651, 6654, 6655, 6656, 6698, and 

25 6699 shall apply for any failure during the apVerDate Sep 11 2014 04:44 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3273.IH H3273

kjohnson on DSK79L0C42PROD with BILLS
4 

•HR 3273 IH

1 plicable period to file a return or report or 

2 make a payment of tax to the extent such fail3 ure is attributable to filing or payment require4 ments relating to the receipt of such virtual 

5 currency (or any disposition of such currency 

6 during such period). 

7 (2) DEFINITIONS AND SPECIAL RULES.—For 

8 purposes of this subsection— 

9 (A) APPLICABLE PERIOD.—The term ‘‘ap10 plicable period’’ means any period beginning be11 fore the date of the enactment of this Act and 

12 ending on the date the Secretary issues regula13 tions or guidance, or legislation is enacted, that 

14 prescribes each of the following: 

15 (i) Rules for calculating and allocating 

16 the basis of forked convertible virtual cur17 rency. 

18 (ii) Rules for calculating the fair mar19 ket value of forked convertible virtual cur20 rency at any given time. 

21 (iii) Rules for determining the holding 

22 period of forked convertible virtual cur23 rency. 

24 (B) OTHER TERMS.—Terms used in this 

25 subsection which are also used in section 139I 


kjohnson on DSK79L0C42PROD with BILLS
5 

•HR 3273 IH

1 of the Internal Revenue Code of 1986 shall 

2 have the same meaning as when used in such 

3 section 139I. 

4 (c) CLERICAL AMENDMENT.—The table of sections 

5 for part III of subchapter B of chapter 1 of such Code 

6 is amended by inserting after the item relating to section 

7 139H the following new item: 

‘‘Sec. 139I. Exclusion of convertible virtual currency received in a hard fork.’’. 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to forked convertible virtual cur10 rency (as defined in section 139I of the Internal Revenue 

11 Code of 1986 as added by this section) received after the 

12 date of the enactment of this Act. 

Æ 


kjohnson on DSK79L0C42PROD with BILLS