[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 936 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 936
To amend the Internal Revenue Code of 1986 to deny any deduction for
certain fines, penalties, and other amounts.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 29, 2003
Mr. Baucus (for himself, Mr. Grassley, 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 any deduction for
certain fines, penalties, and other amounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Government Settlement Transparency
Act of 2003''.
SEC. 2. DENIAL OF DEDUCTION FOR CERTAIN 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, Penalties, and Other Amounts.--
``(1) In general.--Except as provided in paragraph (2), no
deduction otherwise allowable 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 in relation to the violation of any law or the
investigation or inquiry into the potential violation of any
law.
``(2) Exception for amounts constituting restitution.--
Paragraph (1) shall not apply to any amount which the taxpayer
establishes constitutes restitution for damage or harm caused
by the violation of any law or the potential violation of any
law. This paragraph shall not apply to any amount paid or
incurred as reimbursement to the government for the costs of
any investigation or litigation.
``(3) Treatment of certain nongovernmental regulatory
entities.--For purposes of paragraph (1), amounts paid or
incurred to, or at the direction of, the following
nongovernmental entities shall be treated as amounts paid or
incurred to, or at the direction of, a government:
``(A) Any nongovernmental entity which exercises
self-regulatory powers (including imposing sanctions)
in connection with a qualified board or exchange (as
defined in section 1256(g)(7)).
``(B) To the extent provided in regulations, any
nongovernmental entity which exercises self-regulatory
powers (including imposing sanctions) as part of
performing an essential governmental function.''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred after April 27, 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 27, 2003. Such
exception shall not apply to an order or agreement requiring court
approval unless the approval was obtained on or before April 27, 2003.
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