This bill excludes certain persons from being considered a broker for tax reporting purposes. Under current law, the transfer of digital assets from a broker to a nonbroker requires the broker to file a return beginning on January 1, 2024. The bill provides that a broker does not include any person solely engaged in the business of (1) validating distributed ledger transactions, or (2) selling hardware or software for which the sole function is to permit access to digital assets on a distributed ledger.
To revise the definition of a broker for purposes of certain reporting 
requirements with respect to digital asset transfers under the Internal 
             Revenue Code of 1986, 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. INFORMATION REPORTING FOR BROKERS AND DIGITAL ASSETS.

    (a) Clarification of Definition of Broker.--Subparagraph (D) of 
section 6045(c)(1) of the Internal Revenue Code of 1986, as added by 
section 80603(a)(3) of the Infrastructure Investment and Jobs Act 
(Public Law 117-58), is amended by striking ``is responsible for 
regularly providing any service effectuating'' and inserting 
``regularly effectuates''.
    (b) Rules of Construction.--Section 80603 of the Infrastructure 
Investment and Jobs Act is amended by striking subsection (d) and 
inserting the following:
    ``(d) Rules of Construction.--
            ``(1) Definition of broker.--Nothing in this section or the 
        amendments made by this section shall be construed to create 
        any inference that a person described in section 6045(c)(1)(D) 
        of the Internal Revenue Code of 1986, as added by this section, 
        includes any person solely engaged in the business of--
                    ``(A) validating distributed ledger transactions, 
                without providing other functions or services, or
                    ``(B) selling hardware or software for which the 
                sole function is to permit persons to control private 
                keys which are used for accessing digital assets on a 
                distributed ledger.
            ``(2) Brokers and treatment of digital assets.--Nothing in 
        this section or the amendments made by this section shall be 
        construed to create any inference, for any period prior to the 
        effective date of such amendments, with respect to--
                    ``(A) whether any person is a broker under section 
                6045(c)(1) of the Internal Revenue Code of 1986, or
                    ``(B) whether any digital asset is property which 
                is a specified security under section 6045(g)(3)(B) of 
                such Code.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 80603 of the 
Infrastructure Investment and Jobs Act.
                                 <all>
A bill to revise the definition of a broker for purposes of certain reporting requirements with respect to digital asset transfers under the Internal Revenue Code of 1986, and for other purposes.
A bill to revise the definition of a broker for purposes of certain reporting requirements with respect to digital asset transfers under the Internal Revenue Code of 1986, and for other purposes.
Official Titles - Senate
Official Title as Introduced
A bill to revise the definition of a broker for purposes of certain reporting requirements with respect to digital asset transfers under the Internal Revenue Code of 1986, and for other purposes.
Sen. Toomey, Patrick