[Congressional Record Volume 141, Number 63 (Wednesday, April 5, 1995)]
[Extensions of Remarks]
[Pages E787-E788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


  A BILL TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO ESTABLISH FOR 
 CERTAIN EMPLOYEES OF INTERNATIONAL ORGANIZATIONS A LIMITED ESTATE TAX 
   CREDIT EQUIVALENT TO THE MARITAL DEDUCTION AND A PRO RATA UNIFIED 
                                 CREDIT

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                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                        Wednesday, April 5, 1995
  Mr. HOUGHTON. Mr. Speaker, I am joined today by my colleague, Mr. 
Gibbons, in introducing legislation to address a problem that 
 [[Page E788]] exists for employees of the World Bank and other 
international organizations. This same legislation was introduced in 
the 103d Congress by Congressman Gibbons. We understand that the estate 
tax rules, as amended by the Technical and Miscellaneous Revenue Act of 
1988 [TAMRA], are producing a serious and probably unintentional tax 
burden on certain employees of the World Bank and other international 
organizations.
  The employees affected are those who are neither U.S. citizens nor 
permanent resident aliens, but who come to the United States 
temporarily for purposes of their employment at an international 
organization. In addition, nonresidents who are not U.S. citizens may 
also be affected. These individuals are normally exempt from U.S. 
individual income taxes.
  The problem involves the restrictions on the use of a marital 
deduction in the estates of these individuals. These restrictions may 
result in an unwarranted U.S. estate tax burden because the individuals 
happen to die while in the United States, when their purpose for being 
here is employment with an international organization. This bill 
addresses these problems by providing for a limited marital transfer 
credit.
  The bill would apply to a holder of a G-4 international organization 
employee visa on the date of death. Normally, a resident employee and 
the spouse would each be entitled to a unified estate and gift tax 
credit, which under current law is equivalent to an exemption of 
$600,000 or a total of $1,200,000. However, if the employee dies the 
spouse would normally return to the country of citizenship. In that 
case, the surviving spouse would not utilize his or her unified credit. 
The bill would provide for a limited marital transfer credit, which 
again would be the equivalent of $600,000. Thus, in a deceased 
employee's estate, there would be available the unified estate and gift 
tax credit for bequests to any beneficiaries selected by the deceased, 
as well as a maximum marital transfer credit equivalent to $600,000, 
the latter limited for use to marital transfers. A similar provision 
would apply to nonresident individuals who are not U.S. citizens; 
however, the unified credit equivalent of $60,000 would be substituted 
for the $600,000.
  We believe this change would appropriately address the problem that 
currently exists. We welcome the support of our colleagues in enacting 
this important piece of legislation.


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