II 111th CONGRESS 1st Session S. 2842 IN THE SENATE OF THE UNITED STATES December 7, 2009 Mr. Begich 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 the deduction for direct to consumer advertising expenses for prescription pharmaceuticals and to provide a deduction for fees paid for the participation of children in certain organizations which promote physical activity.

1.

Disallowance of deduction for direct to consumer advertising expenses for prescription pharmaceuticals

(a)

In general

Part IX of subchapter B of chapter 1 of subtitle A of the Internal Revenue Code of 1986 (relating to items not deductible) is amended by adding at the end the following new section:

280I.

Disallowance of deduction for direct to consumer advertising expenses for prescription pharmaceuticals

No deduction shall be allowed under this chapter for expenses relating to direct to consumer advertising in any media for the sale and use of prescription pharmaceuticals for any taxable year.

. (b)

Conforming amendment

The table of sections for such part IX of the Internal Revenue Code of 1986 is amended by adding after the item relating to section 280H the following new item: Sec. 280I. Disallowance of deduction for direct to consumer advertising expenses for prescription pharmaceuticals. . (c)

Effective date

The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.

2.

Physical Lifestyles for America's Youth (PLAY) deduction

(a)

In general

Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and inserting after section 223 the following new section:

224.

Fees for organizations promoting children's physical activity

(a)

General rule

There shall be allowed as a deduction under this chapter an amount equal to the lesser of— (1)the amount paid or incurred by the taxpayer during the taxable year for the participation of a qualifying child (as defined in section 152(c)) of the taxpayer in a qualified organization, or (2)$500. (b)

Limitations

(1)

In general

No deduction shall be allowed under subsection (a) with respect to any taxpayer whose adjusted gross income for the taxable year exceeds $250,000. (2)

Adjusted gross income

For purposes of this subsection, adjusted gross income shall be determined— (A)without regard to this section and sections 199, 911, 931, and 933, and (B)after the application of sections 86, 135, 137, 219, 221, 222, and 469. (c)

Qualified organization

For purposes of this section, the term qualified organization means any other organization the principal activities of which are designed to promote or provide for the physical activity of children, as determined under guidelines published by the Secretary in consultation with the Secretary of Health and Human Services.

. (b)

Clerical amendment

The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as relating to section 225 and inserting after the item relating to section 223 the following new item: Sec. 224. Fees for organizations promoting children's physical activity. . (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.