[Congressional Record Volume 162, Number 20 (Wednesday, February 3, 2016)]
[Senate]
[Pages S605-S606]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 3240. Mr. LEAHY submitted an amendment intended to be proposed to 
amendment SA 2953 proposed by Ms. Murkowski to the bill S. 2012, to 
provide for the modernization of the energy policy of the United 
States, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. ____. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) of the Internal Revenue 
     Code of 1986 is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any

[[Page S606]]

     amount paid or incurred for punitive damages in connection 
     with any judgment in, or settlement of, any action.''.
       (2) Conforming amendment.--The heading for section 162(g) 
     of such Code is amended by inserting ``or Punitive Damages'' 
     after ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 of such Code is 
     amended by adding at the end the following new subsection:
       ``(h) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 of such Code is amended by 
     adding at the end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.
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