I 

110TH CONGRESS 

1ST SESSION H. R. 2507 

To amend the Internal Revenue Code of 1986 to repeal the inclusion in 

gross income of Social Security benefits and tier 1 railroad retirement 

benefits. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 24, 2007 

Mr. FRANKS of Arizona introduced the following bill; which was referred to 

the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to repeal 

the inclusion in gross income of Social Security benefits 

and tier 1 railroad retirement benefits. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Seniors Financial Se5 curity Act of 2007’’. 


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1 SEC. 2. REPEAL OF INCLUSION IN GROSS INCOME OF SO2 CIAL SECURITY BENEFITS AND TIER 1 RAIL3 ROAD RETIREMENT BENEFITS. 

4 (a) IN GENERAL.—Section 86 of the Internal Rev5 enue Code of 1986 (relating to taxation of social security 

6 and tier 1 railroad retirement benefits) is hereby repealed. 

7 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

8 (1) Subparagraph (B) of section 22(c)(3) of 

9 such Code (relating to treatment of certain work10 men’s compensation benefits) is amended by striking 

11 ‘‘any amount treated as a social security benefit 

12 under section 86(d)(3)’’ and inserting ‘‘if, by reason 

13 of section 224 of the Social Security Act (or by rea14 son of section 3(a)(1) of the Railroad Retirement 

15 Act of 1974), any benefit otherwise payable under 

16 title II of the Social Security Act or the Railroad 

17 Retirement Act of 1974 is reduced by reason of the 

18 receipt of a benefit under a workmen’s compensation 

19 act, the portion of such benefit received under the 

20 workmen’s compensation act which equals such re21 duction’’. 

22 (2) Paragraph (3) of section 72(r) of such Code 

23 (defining tier 1 railroad retirement benefit) is 

24 amended by striking ‘‘has the meaning given such 

25 term by section 86(d)(4)’’ and inserting ‘‘means— 


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1 ‘‘(A) the amount of the annuity under the 

2 Railroad Retirement Act of 1974 equal to the 

3 amount of the benefit to which the taxpayer 

4 would have been entitled under the Social Secu5 rity Act if all of the service after December 31, 

6 1936, of the employee (on whose employment 

7 record the annuity is being paid) had been in8 cluded in the term ‘employment’ as defined in 

9 the Social Security Act, and 

10 ‘‘(B) a monthly annuity amount under sec11 tion 3(f)(3) of the Railroad Retirement Act of 

12 1974.’’. 

13 (3) Sections 135(c)(4)(B), 137(b)(3)(B), 

14 199(d)(2)(A), 221(b)(2)(C)(ii), and 222(b)(2)(C)(ii) 

15 of such Code are each amended by striking ‘‘86,’’. 

16 (4) Clause (i) of section 219(g)(3)(A) of such 

17 Code is amended by striking ‘‘sections 86 and 469’’ 

18 and inserting ‘‘section 469’’. 

19 (5) Subparagraph (F) of section 469(i)(3) of 

20 such Code is amended by striking clause (i) and by 

21 redesignating clauses (ii), (iii), and (iv) as clauses 

22 (i), (ii), and (iii), respectively. 

23 (6) Paragraph (8) of section 861(a) of such 

24 Code (treating social security benefits as United 

25 States sourced) is hereby repealed. 


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1 (7) Paragraph (3) of section 871(a) of such 

2 Code (relating to taxation of social security benefits 

3 by nonresident aliens) is hereby repealed. 

4 (8) Subsection (g) of section 1441 of such Code 

5 (relating to withholding of tax on nonresident aliens) 

6 is hereby repealed. 

7 (9) Subparagraph (C) of section 3402(p)(1) of 

8 such Code is amended by striking clause (i) and by 

9 redesignating clauses (ii), (iii), and (iv) as clauses 

10 (i), (ii), and (iii), respectively. 

11 (10) Paragraph (4) of section 6015(d) of such 

12 Code is amended by striking the last sentence. 

13 (11) Section 6050F of such Code (relating to 

14 returns relating to social security benefits) is hereby 

15 repealed. 

16 (12) Paragraph (1) of section 6050G(a) of such 

17 Code (relating to returns relating to certain railroad 

18 retirement benefits) is amended by striking ‘‘section 

19 86(d)(4)’’ and inserting ‘‘section 72(r)(3)’’. 

20 (13)(A) Section 6103(h) of such Code (relating 

21 to disclosure) is amended by striking paragraph (5) 

22 and by redesignating paragraph (6) as paragraph 

23 (5). 


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1 (B) Paragraph (4) of section 6103(p) of such 

2 Code is amended by striking ‘‘(h)(5),’’ each place it 

3 appears. 

4 (C) Subsection (k) of section 1113 of the Right 

5 to Financial Privacy Act of 1978 is hereby repealed. 

6 (14) The table of sections for part II of sub7 chapter B of chapter 1 of such Code is amended by 

8 striking the item relating to section 86. 

9 (15) The table of sections for subpart B of part 

10 III of subchapter A of chapter 61 of such Code is 

11 amended by striking the item relating to section 

12 6050F. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to benefits received after December 

15 31, 2006, in taxable years ending after such date. 

16 (d) TRUST FUNDS HELD HARMLESS.—There are 

17 hereby appropriated (out of any money in the Treasury 

18 not otherwise appropriated) for each fiscal year to each 

19 fund under the Social Security Act or the Railroad Retire20 ment Act of 1974 an amount equal to the reduction in 

21 the transfers to such fund for such fiscal year by reason 

22 of the amendments made by this section. 

Æ 


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