I 
116TH CONGRESS 
1ST SESSION H. R. 3650 
To provide temporary safe harbor for the tax treatment of hard forks of 
convertible virtual currency in the absence of administrative guidance. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 9, 2019 
Mr. EMMER introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To provide temporary safe harbor for the tax treatment 
of hard forks of convertible virtual currency in the ab-
sence of administrative guidance. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Safe Harbor for Tax-
payers with Forked Assets Act of 2019’’. 
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SEC. 2. SAFE HARBOR PERIOD FOR PENALTIES RELATING 
TO TAX TREATMENT OF HARD-FORKED VIR-
TUAL CURRENCY. 
(a) IN GENERAL.—In the case of a taxpayer who dur-
ing the applicable period receives forked convertible virtual 
currency— 
(1) no penalties or additions to tax under part 
II of subchapter A of chapter 68 of the Internal 
Revenue Code of 1986 shall apply with respect to 
any portion of an underpayment or understatement 
of tax that is attributable to the taxpayer’s attempt 
during such period to comply with the tax treatment 
under such Code of the receipt of such virtual cur-
rency (or any disposition of such currency during 
such period); and 
(2) no penalties or additions to tax under sec-
tions 6651, 6654, 6655, 6656, 6698, and 6699 shall 
apply for any failure during the applicable period to 
file a return or report or make a payment of tax to 
the extent such failure is attributable to filing or 
payment requirements relating to the receipt of such 
virtual currency (or any disposition of such currency 
during such period). 
(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
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(1) APPLICABLE PERIOD.—The term ‘‘applica-
ble period’’ means any period beginning before the 
date of the enactment of this Act and ending on the 
date the Secretary issues regulations or guidance, or 
legislation is enacted, that prescribes each of the fol-
lowing: 
(A) The tax treatment of receiving forked 
convertible virtual currency. 
(B) Rules for calculating and allocating 
the basis of forked convertible virtual currency. 
(C) Rules for calculating the fair market 
value of forked convertible virtual currency at 
any given time. 
(D) Rules for determining the holding pe-
riod of forked convertible virtual currency. 
(2) FORKED
CONVERTIBLE
VIRTUAL
CUR-
RENCY.— 
(A) IN GENERAL.—The term ‘‘forked con-
vertible virtual currency’’ means, with respect 
to any taxpayer, any convertible virtual cur-
rency to which the taxpayer becomes entitled by 
reason of a hard fork. 
(B) CONVERTIBLE VIRTUAL CURRENCY.— 
The term ‘‘convertible virtual currency’’ means 
any digital representation of value that— 
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(i) functions as a medium of ex-
change, a unit of account, or a store of 
value; 
(ii) does not have legal tender status; 
and 
(iii) has an ascertainable equivalent 
value in legal tender or is used as a sub-
stitute for legal tender. 
(C) HARD FORK.—The term ‘‘hard fork’’ 
means, with respect to any convertible virtual 
currency, any material change in the shared 
digital ledger which is used to verify by con-
sensus transactions in such currency if such 
change results in the maintenance of inde-
pendent shared digital ledgers with respect to 
such currency. 
(3) CONSTRUCTIVE RECEIPT.—Receiving forked 
virtual currency shall include any right to receive (or 
other constructive of) such virtual currency. 
Æ 
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