[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1720 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1720
To amend the Internal Revenue Code of 1986 to provide tax relief for
victims of the terrorist attacks against the United States involving
anthrax.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 16, 2001
Mrs. Carnahan (for herself and Ms. Mikulski) 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 provide tax relief for
victims of the terrorist attacks against the United States involving
anthrax.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Victims of Anthrax
Tax Relief Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
Sec. 2. Income and employment taxes of victims of terrorist attacks.
Sec. 3. Estate tax reduction.
Sec. 4. Payments by charitable organizations treated as exempt
payments.
Sec. 5. Exclusion of certain cancellations of indebtedness.
Sec. 6. No impact on social security trust funds.
SEC. 2. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF ANTHRAX.
(a) In General.--Section 692 (relating to income taxes of members
of Armed Forces on death) is amended by adding at the end the following
new subsection:
``(d) Individuals Dying as a Result of Anthrax Attacks.--
``(1) In general.--In the case of any individual who dies
as a result of illness incurred as a result of a terrorist
attack involving anthrax occurring on or after September 11,
2001, and before January 1, 2002, any tax imposed by this
subtitle shall not apply--
``(A) with respect to the taxable year in which
falls the date of such individual's death, and
``(B) with respect to any prior taxable year in the
period beginning with the last taxable year ending
before the taxable year in which the wounds, injury, or
illness were incurred.
``(2) Exceptions.--
``(A) Taxation of certain benefits.--Subject to
such rules as the Secretary may prescribe, paragraph
(1) shall not apply to the amount of any tax imposed by
this subtitle which would be computed by only taking
into account the items of income, gain, or other
amounts attributable to--
``(i) amounts payable in the taxable year
by reason of the death of an individual
described in paragraph (1) which would have
been payable in such taxable year if the death
had occurred by reason of an event other than
an event described in paragraph (1), or
``(ii) amounts payable in the taxable year
which would not have been payable in such
taxable year but for an action taken after the
date of the applicable terrorist attack.
``(B) No relief for perpetrators.--Paragraph (1)
shall not apply with respect to any individual
identified by the Attorney General to have been a
participant or conspirator in any event described in
paragraph (1), or a representative of such
individual.''.
(b) Refund of Other Taxes Paid.--Section 692, as amended by
subsection (a), is amended by adding at the end the following new
subsection:
``(e) Refund of Other Taxes Paid.--In determining the amount of tax
under this section to be credited or refunded as an overpayment with
respect to any individual for any period, such amount shall be
increased by an amount equal to the amount of taxes imposed and
collected under chapter 21 and sections 3201(a), 3211(a)(1), and
3221(a) with respect to such individual for such period.''.
(c) Conforming Amendments.--
(1) Section 5(b)(1) is amended by inserting ``and victims
of certain terrorist attacks'' before ``on death''.
(2) Section 6013(f)(2)(B) is amended by inserting ``and
victims of certain terrorist attacks'' before ``on death''.
(d) Clerical Amendments.--
(1) The heading of section 692 is amended to read as
follows:
``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED FORCES AND
VICTIMS OF CERTAIN TERRORIST ATTACKS ON DEATH.''.
(2) The item relating to section 692 in the table of
sections for part II of subchapter J of chapter 1 is amended to
read as follows:
``Sec. 692. Income and employment taxes
of members of Armed Forces and
victims of certain terrorist
attacks on death.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending on or after September 11, 2001.
SEC. 3. ESTATE TAX REDUCTION.
(a) In General.--Section 2201 is amended to read as follows:
``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE ARMED FORCES
AND DEATHS OF VICTIMS OF CERTAIN TERRORIST ATTACKS.
``(a) In General.--Unless the executor elects not to have this
section apply, in applying section 2001 to the estate of a qualified
decedent, the rate schedule set forth in subsection (c) shall be deemed
to be the rate schedule set forth in section 2001(c).
``(b) Qualified Decedent.--For purposes of this section, the term
`qualified decedent' means--
``(1) any citizen or resident of the United States dying
while in active service of the Armed Forces of the United
States, if such decedent--
``(A) was killed in action while serving in a
combat zone, as determined under section 112(c), or
``(B) died as a result of wounds, disease, or
injury suffered while serving in a combat zone (as
determined under section 112(c)), and while in the line
of duty, by reason of a hazard to which such decedent
was subjected as an incident of such service, or
``(2) any individual who died as a result of illness
incurred as a result of a terrorist attack involving anthrax
occurring on or after September 11, 2001, and before January 1,
2002.
Paragraph (2) shall not apply with respect to any individual identified
by the Attorney General to have been a participant or conspirator in
any such terrorist attack, or a representative of such individual.
``(c) Rate Schedule.--
``If the amount with respect to The tentative tax is:
which the tentative tax to
be computed is:
Not over $150,000..............
1 percent of the amount by
which such amount
exceeds $100,000.
Over $150,000 but not over
$200,000.
$500 plus 2 percent of the
excess over $150,000.
Over $200,000 but not over
$300,000.
$1,500 plus 3 percent of the
excess over $200,000.
Over $300,000 but not over
$500,000.
$4,500 plus 4 percent of the
excess over $300,000.
Over $500,000 but not over
$700,000.
$12,500 plus 5 percent of the
excess over $500,000.
Over $700,000 but not over
$900,000.
$22,500 plus 6 percent of the
excess over $700,000.
Over $900,000 but not over
$1,100,000.
$34,500 plus 7 percent of the
excess over $900,000.
Over $1,100,000 but not over
$1,600,000.
$48,500 plus 8 percent of the
excess over $1,100,000.
Over $1,600,000 but not over
$2,100,000.
$88,500 plus 9 percent of the
excess over $1,600,000.
Over $2,100,000 but not over
$2,600,000.
$133,500 plus 10 percent of the
excess over $2,100,000.
Over $2,600,000 but not over
$3,100,000.
$183,500 plus 11 percent of the
excess over $2,600,000.
Over $3,100,000 but not over
$3,600,000.
$238,500 plus 12 percent of the
excess over $3,100,000.
Over $3,600,000 but not over
$4,100,000.
$298,500 plus 13 percent of the
excess over $3,600,000.
Over $4,100,000 but not over
$5,100,000.
$363,500 plus 14 percent of the
excess over $4,100,000.
Over $5,100,000 but not over
$6,100,000.
$503,500 plus 15 percent of the
excess over $5,100,000.
Over $6,100,000 but not over
$7,100,000.
$653,500 plus 16 percent of the
excess over $6,100,000.
Over $7,100,000 but not over
$8,100,000.
$813,500 plus 17 percent of the
excess over $7,100,000.
Over $8,100,000 but not over
$9,100,000.
$983,500 plus 18 percent of the
excess over $8,100,000.
Over $9,100,000 but not over
$10,100,000.
$1,163,500 plus 19 percent of
the excess over
$9,100,000.
Over $10,100,000...............
$1,353,500 plus 20 percent of
the excess over
$10,100,000.
``(d) Determination of Unified Credit.--In the case of an estate to
which this section applies, subsection (a) shall not apply in
determining the credit under section 2010.''.
(b) Conforming Amendments.--
(1) Section 2011 is amended by striking subsection (d) and
by redesignating subsections (e), (f), and (g) as subsections
(d), (e), and (f), respectively.
(2) Section 2053(d)(3)(B) is amended by striking ``section
2011(e)'' and inserting ``section 2011(d)''.
(3) Paragraph (9) of section 532(c) of the Economic Growth
and Tax Relief Reconciliation Act of 2001 is repealed.
(c) Clerical Amendment.--The item relating to section 2201 in the
table of sections for subchapter C of chapter 11 is amended to read as
follows:
``Sec. 2201. Combat zone-related deaths
of members of the Armed Forces
and deaths of victims of
certain terrorist attacks.''.
(d) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying on or after September 11, 2001.
SEC. 4. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS EXEMPT
PAYMENTS.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) payments made by an organization described in section
501(c)(3) of such Code by reason of the death, injury,
wounding, or illness of an individual incurred as the result of
a terrorist attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002, shall be
treated as related to the purpose or function constituting the
basis for such organization's exemption under section 501 of
such Code if such payments are made using an objective formula
which is consistently applied, and
(2) in the case of a private foundation (as defined in
section 509 of such Code), any payment described in paragraph
(1) shall not be treated as made to a disqualified person for
purposes of section 4941 of such Code.
(b) Effective Date.--This section shall apply to payments made on
or after September 11, 2001.
SEC. 5. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) gross income shall not include any amount which (but
for this section) would be includible in gross income by reason
of the discharge (in whole or in part) of indebtedness of any
taxpayer if the discharge is by reason of the death of an
individual incurred as the result of a terrorist attack
involving anthrax occurring on or after September 11, 2001, and
before January 1, 2002, and
(2) return requirements under section 6050P of such Code
shall not apply to any discharge described in paragraph (1).
(b) Effective Date.--This section shall apply to discharges made on
or after September 11, 2001, and before January 1, 2002.
SEC. 6. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made by this
Act) shall be construed to alter or amend title II of the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of this
Act has a negative impact on the income and balances of the
trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general revenues of
the Federal Government an amount sufficient so as to ensure
that the income and balances of such trust funds are not
reduced as a result of the enactment of this Act.
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