Earlier today, Congressman Stockman (TX-36) announced on his website in a press release that he plans to introduce the “Virtual Currency Tax Reform Act.” I wish he had taken it a step further and called it the “Digital Currency Tax Reform Act,” but one can only have so many wins in a day. This piece of legislation, if enacted, would revise the IRS Virtual Currency Guidance released very late last month. Instead of treating virtual currencies such as Bitcoin as property, the Virtual Currency Tax Reform Act will call for their treatment as currency. The exact text of the proposed legislation has not been released yet. Congressman Stockman only revealed that he would be introducing the legislation during this session. I have high hopes for this potential bill, and I’m sure many others in the Bitcoin community do, as well. It is yet unclear if House members would welcome this reform, and if there are even party lines on the issue. If this legislation makes it to the floor for a vote, we will see the addition of “virtual currency” to the Republicans’ and Democrats’ party platform… Mark my words. I’ll leave it to your imagination, as to which side would choose which side.
Texas’s Department of Banking also recently released their interpretation of the regulatory treatment of virtual currencies under the Texas Money Services Act.
Here is the full text of the press release:
Apr 8, 2014Press Release
WASHINGTON – Today Congressman Steve Stockman (R-TX) will introduce the “Virtual Currency Tax Reform Act.” If enacted, this legislation would change the tax status of virtual currencies, such as Bitcoin, from property to currency.
Congressman Stockman introduced this legislation as the IRS begins to regulate virtual currencies as property and require capital gains tax payments on any virtual currency transactions. This legislation would instead require Americans to pay sales taxes on virtual currency transactions, a more proper way of taxing such transactions.
Commenting on this proposed legislation, Congressman Stockman said, “This is a nascent industry. Along with 3-D printers and nanotubes, cryptocurrency is the future. We need to encourage it, not discourage it. There is risk associated with every budding industry in America.”
This evening, Congressman Stockman will visit the New York City Bitcoin Center to further discuss this legislation.
Contrary to the post on his website, Stockman visited the New York City Bitcoin Center on the night of 4/7/14 not 4/8/14. There, he announced his proposed legislation to the crowd of Bitcoiners that had gathered in NYC for the Inside Bitcoins Conference.
Bitcoin and Politics
Steve Stockman first came to the attention of Bitcoiners earlier this year when he announced that his Steve Stockman for Senate campaign would be accepting Bitcoin donations via Bitpay. Bitpay offers 0% processing to charities and other nonprofits; political campaigns are no different. Of course, Stockman adhered to every possible regulation regarding political donations though he was accepting Bitcoin. Only U.S. citizens were allowed to donate, and only under the set amount of $2,600. Late in 2013, the FEC reached a deadlock when voting on a draft decision that would have expressly allowed Bitcoin donations to PACs. Despite the continued haze around the legality of accepting Bitcoin donations for political causes, many populations such as Congressman Stockman, have gone ahead and accepted them anyway. So far, no problems have arisen. Especially in the Bitcoin realm, there are increasing instances where we see people making the decision to ask for forgiveness rather than permission.