[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1975 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1975
To amend the Internal Revenue Code of 1986 to deny a deduction for
securities-related fines, penalties, and other amounts, and to provide
that revenues resulting from such denial be transferred to Fair Funds
for the relief of victims.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 25, 2003
Mr. Dodd (for himself and Mr. McCain) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to deny a deduction for
securities-related fines, penalties, and other amounts, and to provide
that revenues resulting from such denial be transferred to Fair Funds
for the relief of victims.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. DENIAL OF DEDUCTION FOR SECURITIES-RELATED FINES, PENALTIES,
AND OTHER AMOUNTS.
(a) In General.--Subsection (f) of section 162 of the Internal
Revenue Code of 1986 (relating to trade or business expenses) is
amended to read as follows:
``(f) Fines and Penalties.--
``(1) In general.--No deduction shall be allowed under
subsection (a) for any fine or similar penalty paid to a
government for the violation of any law.
``(2) Special rules for securities-related fines,
penalties, and other amounts.--
``(A) In general.--No deduction otherwise allowable
(after the application of paragraph (1)) shall be
allowed under this chapter for any amount paid or
incurred (whether by suit, agreement, or otherwise) to,
or at the direction of, a government or self-regulatory
organization in relation to--
``(i) the violation of the securities laws
or the rules of a self-regulatory organization,
``(ii) the failure to supervise any person
who violates such laws or rules, or
``(iii) the investigation or inquiry into
the potential violation of such laws or rules.
``(B) Definitions.--For purposes of this paragraph,
the terms `securities laws', `self-regulatory
organization', and `rules of a self-regulatory
organization' have the meanings given such terms by
section 3(a) of the Securities and Exchange Act of 1934
(15 U.S.C. 78c(a)).
``(C) Transfer of certain revenues to fair funds
for the relief of victims.--
``(i) In general.--There are hereby
appropriated to the Securities and Exchange
Commission amounts which the Secretary
determines are equivalent to the increases in
Federal revenues by reason of the application
of this subsection to amounts described in
subparagraph (A).
``(ii) Allocation to fair funds.--The
Securities and Exchange Commission shall
transfer to any disgorgement fund established
by the Commission with respect to any taxpayer
pursuant to section 308 of the Sarbanes-Oxley
Act of 2002 (15 U.S.C. 7246) the portion of the
amounts appropriated under clause (i)
attributable to the payment of any amount
described in subparagraph (A) by the
taxpayer.''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred after April 28, 2003, except that such
amendment shall not apply to amounts paid or incurred under any binding
order or agreement entered into on or before April 28, 2003. Such
exception shall not apply to an order or agreement requiring court
approval unless the approval was obtained on or before April 28, 2003.
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