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. 
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 2021’’. 
SEC. 2. TAX TREATMENT OF FORKED CONVERTIBLE VIR-
TUAL CURRENCY. 
(a) EXCLUSION FROM GROSS INCOME.—Part III of 
subchapter B of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after section 139H the 
following new section: 
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‘‘SEC. 139I. EXCLUSION OF CONVERTIBLE VIRTUAL CUR-
RENCY RECEIVED IN A HARD FORK. 
‘‘(a) IN GENERAL.—No amount shall be included in 
gross income by reason of the receipt of any forked con-
vertible virtual currency. 
‘‘(b) FORKED CONVERTIBLE VIRTUAL CURRENCY.— 
For purposes of this section— 
‘‘(1) FORKED
CONVERTIBLE
VIRTUAL
CUR-
RENCY.—The term ‘forked convertible virtual cur-
rency’ means, with respect to any taxpayer, any con-
vertible virtual currency to which the taxpayer be-
comes entitled by reason of a hard fork. 
‘‘(2) CONVERTIBLE VIRTUAL CURRENCY.—The 
term ‘convertible virtual currency’ means any digital 
representation of value that— 
‘‘(A) functions as a medium of exchange, a 
unit of account, or a store of value; 
‘‘(B) does not have legal tender status; and 
‘‘(C) has an ascertainable equivalent value 
in legal tender or is used as a substitute for 
legal tender. 
‘‘(3) HARD
FORK.—The term ‘hard fork’ 
means, with respect to any convertible virtual cur-
rency, any material change in the shared digital 
ledger which is used to verify by consensus trans-
actions in such currency if such change results in 
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the maintenance of independent shared digital ledg-
ers with respect to such currency. 
‘‘(4) 
CONSTRUCTIVE
RECEIPT.—Receiving 
forked virtual currency shall include any right to re-
ceive (or other constructive of) such virtual cur-
rency.’’. 
(b) SAFE HARBOR PERIOD FOR PENALTIES RELAT-
ING TO TAX TREATMENT OF HARD-FORKED VIRTUAL 
CURRENCY.— 
(1) IN GENERAL.—In the case of a taxpayer 
who during the applicable period receives forked con-
vertible virtual currency— 
(A) no penalties or additions to tax under 
part II of subchapter A of chapter 68 of the In-
ternal 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 currency (or any 
disposition of such currency during such pe-
riod); and 
(B) no penalties or additions to tax under 
sections 6651, 6654, 6655, 6656, 6698, and 
6699 shall apply for any failure during the ap-
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plicable period to file a return or report or 
make a payment of tax to the extent such fail-
ure is attributable to filing or payment require-
ments relating to the receipt of such virtual 
currency (or any disposition of such currency 
during such period). 
(2) DEFINITIONS
AND
SPECIAL
RULES.—For 
purposes of this subsection— 
(A) APPLICABLE PERIOD.—The term ‘‘ap-
plicable period’’ means any period beginning be-
fore the date of the enactment of this Act and 
ending on the date the Secretary issues regula-
tions or guidance, or legislation is enacted, that 
prescribes each of the following: 
(i) Rules for calculating and allocating 
the basis of forked convertible virtual cur-
rency. 
(ii) Rules for calculating the fair mar-
ket value of forked convertible virtual cur-
rency at any given time. 
(iii) Rules for determining the holding 
period of forked convertible virtual cur-
rency. 
(B) OTHER TERMS.—Terms used in this 
subsection which are also used in section 139I 
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