# Plain Language Summary: Keep Innovation in America Act

This bill is about clarifying tax rules for cryptocurrency and other digital assets. Right now, there's confusion about who counts as a "broker" under tax law when it comes to crypto transactions, and this bill tries to clear that up. Essentially, it says that only people who actively buy and sell digital assets for customers—like a crypto exchange—should be considered brokers for tax reporting purposes. This is important because it would exclude people like cryptocurrency miners, software developers, and others who work with digital assets but don't actually handle customer transactions.

The bill makes several specific changes to tax reporting requirements. It narrows the definition of "broker" to focus specifically on those who "stand ready in the ordinary course of business to effect sales of digital assets at the direction of their customers." It also delays when certain reporting requirements kick in—pushing the deadline from 2023 to 2025 for digital asset brokers to start filing detailed transaction reports with the IRS. The bill also limits what information brokers have to report, saying they can only report customer information that customers voluntarily provide and that the broker legitimately needs for business purposes.

The practical effect is that this bill would make it easier for the cryptocurrency industry to operate in the United States by reducing the burden of tax reporting on people and companies that aren't actually facilitating customer trades. The bill's supporters argue this will keep cryptocurrency innovation happening in America rather than moving overseas, especially as other countries like China have cracked down on crypto. However, the bill also requires the Treasury Department to study whether treating digital assets like cash for certain reporting purposes would be practical, giving Congress time to think through how to balance innovation with tax compliance and financial oversight.

Keep Innovation in America Act

McHenry, Patrick T.

Keep Innovation in America Act This bill modifies provisions enacted by the Infrastructure Investment and Jobs Act relating to the definitions of broker and digital assets and their reporting requirements. The bill redefines broker, for tax reporting purposes, to mean any person who (for consideration) stands ready in the ordinary course of business to effect sales of digital assets at the direction of their customers. The bill redefines digital asset to mean any digital representation of value which is recorded on a cryptographically secured distribution ledger (this revised definition eliminates the discretion of the Department of the Treasury to include similar technology in the definition of digital asset). The bill eliminates the cash reporting requirement for digital assets (i.e., receipt of more than $10,000) but requires Treasury to conduct a study of, and report on, the effect of expanding the definition of cash to include any digital asset.