[Congressional Record Volume 147, Number 139 (Tuesday, October 16, 2001)]
[Extensions of Remarks]
[Pages E1900-E1901]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE INTRODUCTION OF THE FAIR TAX TREATMENT FOR INSURANCE AGENTS' 
                    TERMINATION PAYMENTS ACT OF 2001

                                 ______
                                 

                            HON. SAM JOHNSON

                                of texas

                    in the house of representatives

                       Tuesday, October 16, 2001

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise today in order to 
introduce a small business tax relief measure that will assist 
thousands of insurance agents throughout this country as they prepare 
for retirement.
  Many exclusive insurance agents who leave or retire from their jobs 
receive what is known as a ``termination payment'' under a contractual 
agreement with their respective insurance companies. These payments are 
paid for intangible assets, including the agent's ``book of business'' 
and goodwill, and are usually spread out over a series of years.
  Currently, there is confusion about the tax treatment of these 
termination payments, which has caused some IRS field agents to 
question the capital gains treatment of these payments. My bill, the 
``Fair Tax Treatment for Insurance Agents'' Termination Payments Act of 
2000,'' will make it clear that these termination payments are for the 
sale or other disposition of intangible capital assets and therefore 
should be subject to capital gains treatment. A clarification of 
current law is needed to ensure the correct result and prevent 
unknowing IRS agents from subjecting innocent insurance agents around 
the country to attack and audit on an Issue that has no basis for 
controversy.

[[Page E1901]]

  I urge my colleagues to support my bill and work with me to clarify 
the law to ensure that insurance agent ``termination payments'' are 
subject to capital gains treatment for Federal income tax purposes.

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