I 

108TH CONGRESS 

1ST SESSION H. R. 262

To allow a custodial parent a bad debt deduction for unpaid child support 

payments, and to require a parent who is chronically delinquent in 

child support to include the amount of the unpaid obligation in gross 

income. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. COX (for himself, Mr. FOLEY, Ms. HART, Ms. LOFGREN, Mr. FILNER, 

Mr. DREIER, Mr. SHADEGG, Mr. TOWNS, Mr. MCKEON, Mr. SENSENBRENNER, Mr. OWENS, Mr. WILSON of South Carolina, Mr. 

CUNNINGHAM, Mr. OSE, Mr. SANDERS, Ms. CORRINE BROWN of Florida, 

Mr. BURTON of Indiana, Mr. CALVERT, Mr. ROTHMAN, Mr. ISSA, Mr. 

GARY G. MILLER of California, Mr. KUCINICH, Mr. PENCE, Mr. PITTS, 

Mr. PASCRELL, Mr. POMBO, Mr. ROHRABACHER, Mr. ROYCE, Mr. 

TANCREDO, Mr. TIBERI, Mr. WALDEN of Oregon, Mr. GILLMOR, Mr. 

DUNCAN, Mr. FOSSELLA, Ms. MILLENDER-MCDONALD, Mr. GILCHREST, 

Mr. WEXLER, Mr. VISCLOSKY, Mr. ENGEL, Mr. PAYNE, Mr. PLATTS, Mr. 

DOYLE, Mr. EVANS, Mr. KENNEDY of Minnesota, Mr. JONES of North 

Carolina, Mr. KNOLLENBERG, Mr. KING of New York, and Mr. QUINN) 

introduced the following bill; which was referred to the Committee on 

Ways and Means 

A BILL

To allow a custodial parent a bad debt deduction for unpaid 

child support payments, and to require a parent who 

is chronically delinquent in child support to include the 

amount of the unpaid obligation in gross income.

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

2 This Act may be cited as the ‘‘Child Support Enforce3 ment Act’’. 

4 SEC. 2. NO EFFECT ON RIGHTS AND LIABILITIES. 

5 Nothing in this Act shall be construed to affect—

6 (1) the right of an individual or State to receive 

7 any child support payment; or 

8 (2) the obligation of an individual to pay child 

9 support. 

10 SEC. 3. ALLOWANCE OF BAD DEBT DEDUCTION FOR UN11 PAID CHILD SUPPORT PAYMENTS. 

12 (a) IN GENERAL.—Section 166 of the Internal Rev13 enue Code of 1986 (relating to deduction for bad debts) 

14 is amended by redesignating subsection (f) as subsection 

15 (g) and by inserting after subsection (e) the following new 

16 subsection: 

17 ‘‘(f) UNPAID CHILD SUPPORT.—

18 ‘‘(1) IN GENERAL.—In the case of a custodial 

19 parent who, as of the close of the taxable year, is 

20 owed child support, the amount of unpaid child sup21 port shall be deemed a canceled debt as of such 

22 date, and shall be allowed as a deduction for such 

23 taxable year. 

24 ‘‘(2) PRESUMPTION OF WORTHLESSNESS.—

25 Subsection (a) (relating to worthless debts) shall not 

26 apply to child support. 
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1 ‘‘(3) SUBSEQUENT PAYMENTS.—If any unpaid 

2 child support with respect to which a deduction was 

3 allowed under paragraph (1) is subsequently paid to 

4 the custodial parent, the amount of such payment 

5 shall not be included in the gross income of the cus6 todial parent, nor shall it be allowed as a deduction 

7 to the delinquent debtor. The delinquent debtor shall 

8 be neither required nor allowed to file an amended 

9 return in any subsequent year to reflect the subse10 quent payment of unpaid child support. 

11 ‘‘(4) FULL DEDUCTION FROM ORDINARY IN12 COME.—Subsection (d) (relating to the treatment of 

13 nonbusiness bad debt as a loss from the sale or ex14 change of a capital asset) shall not apply to the de15 ductibility of unpaid child support. 

16 ‘‘(5) TAX RETURNS.—A custodial parent who 

17 wishes to deduct the amount of unpaid child support 

18 shall include on the return claiming the deduction 

19 the name and taxpayer identification number of each 

20 child with respect to whom child support payments 

21 to which this subsection applies are required to be 

22 paid. 

23 ‘‘(6) INFORMATION RETURNS.—

24 ‘‘(A) IN GENERAL.—A custodial parent 

25 who wishes to deduct the amount of unpaid 
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1 child support shall complete Form 1099–CS (or 

2 such other form as the Secretary may pre3 scribe) and provide such form to the Secretary, 

4 and (if the address is known) to the delinquent 

5 debtor, within 45 days following the close of the 

6 taxable year for which the deduction is claimed. 

7 Failure to so file such form with the Secretary 

8 (or, if the address is known, with the delinquent 

9 debtor) shall result in disallowance of the de10 duction for the taxable year. 

11 ‘‘(B) CONTENTS OF FORM.—The Form 

12 1099–CS (or such other form as the Secretary 

13 may prescribe) shall contain—

14 ‘‘(i) the total amount of child support 

15 owed (whether or not paid) for such tax16 able year, 

17 ‘‘(ii) the total amount of unpaid child 

18 support as of the last day of such taxable 

19 year, 

20 ‘‘(iii) the name, address (if known), 

21 and taxpayer identification number of the 

22 delinquent debtor, and

23 ‘‘(iv) notice that the delinquent debtor 

24 is required to include such total amount of 

25 unpaid child support in gross income for 
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1 the delinquent debtor’s taxable year which 

2 includes the last day of the custodial par3 ent’s taxable year. 

4 ‘‘(C) DEBTOR’S ADDRESS UNKNOWN.—If 

5 the delinquent debtor’s address is not known to 

6 the custodial parent, the Form 1099–CS (or 

7 such other form as the Secretary may pre8 scribe) shall indicate that fact. In such a case, 

9 the Secretary may send such notice if the ad10 dress is available to the Secretary, and the no11 tice from the custodial parent to the delinquent 

12 debtor under subparagraph (A) shall not be re13 quired. 

14 ‘‘(7) DETERMINATION OF WHETHER CHILD

15 SUPPORT IS PAID.—

16 ‘‘(A) CHILD SUPPORT ENFORCEMENT OF17 FICE RECORDS AS CONCLUSIVE EVIDENCE OF

18 PAYMENT.—Child support shall be treated as 

19 paid if such payment is recorded by the State 

20 office of child support enforcement in which the 

21 custodial parent is registered. 

22 ‘‘(B) TIMELY MAILING AS TIMELY PAY23 MENT.—A payment received by the State office 

24 of child support enforcement in which the cus25 todial parent is registered after the last day of 
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1 the custodial parent’s taxable year shall be 

2 treated for the purpose of this subsection as 

3 paid on such day if the postmark date falls on 

4 or before such day. The rules of section 7502(f) 

5 and regulations issued thereunder shall apply 

6 for purposes of this subparagraph. 

7 ‘‘(8) DEFINITIONS.—For the purposes of this 

8 subsection—

9 ‘‘(A) CHILD SUPPORT.—The term ‘child 

10 support’ means—

11 ‘‘(i) any periodic payment of a fixed 

12 amount, or 

13 ‘‘(ii) any payment of a medical edu14 cation expense, insurance premium, or 

15 other similar item, 

16 which is required to be paid to a custodial par17 ent by an individual under a support instru18 ment for the support of any qualifying child of 

19 such individual. ‘Child support’ does not include 

20 any amount which is described in section 

21 408(a)(3) of the Social Security Act and which 

22 has been assigned to a State. 

23 ‘‘(B) CUSTODIAL PARENT.—The term ‘cus24 todial parent’ means an individual who is enti25 tled to receive child support and who has reg-
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1 istered with the appropriate State office of child 

2 support enforcement charged with implementing 

3 section 454 of the Social Security Act. 

4 ‘‘(C) DELINQUENT DEBTOR.—The term 

5 ‘delinquent debtor’ means a taxpayer who owes 

6 unpaid child support to a custodial parent. 

7 ‘‘(D) QUALIFYING CHILD.—The term 

8 ‘qualifying child’ means a child of a custodial 

9 parent with respect to whom a dependent de10 duction is allowable under section 151 for the 

11 taxable year (or would be so allowable but for 

12 paragraph (2) or (4) of section 152(e)). 

13 ‘‘(E) SUPPORT INSTRUMENT.—The term 

14 ‘support instrument’ means—

15 ‘‘(i) a decree of divorce or separate 

16 maintenance or a written instrument inci17 dent to such a decree, 

18 ‘‘(ii) a written separation agreement, 

19 or 

20 ‘‘(iii) a decree (not described in clause 

21 (i)) of a court or administrative agency re22 quiring a parent to make payments for the 

23 support or maintenance of 1 or more chil24 dren of such parent. 
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1 ‘‘(F) UNPAID CHILD SUPPORT.—The term 

2 ‘unpaid child support’ means child support that 

3 is payable for months during a custodial par4 ent’s taxable year and unpaid as of the last day 

5 of such taxable year, provided that such unpaid 

6 amount as of such day equals or exceeds one7 half of the total amount of child support due to 

8 the custodial parent for such year.’’

9 (b) DEDUCTION FOR NONITEMIZERS.—Section 62(a) 

10 of such Code is amended by inserting after paragraph (18) 

11 the following new paragraph: 

12 ‘‘(19) UNPAID CHILD SUPPORT PAYMENTS.—

13 The deduction allowed by section 166(f).’’

14 (c) CONFORMING AMENDMENT.—Section 166(d)(2) 

15 of such Code is amended by striking ‘‘or’’ at the end of 

16 subparagraph (A), by striking the period at the end of 

17 the subparagraph (B) and by inserting ‘‘, or’’ and by add18 ing at the end the following new subparagraph: 

19 ‘‘(C) a debt which constitutes unpaid child 

20 support payment under subsection (f).’’

21 SEC. 4. INCLUSION IN INCOME OF AMOUNT OF UNPAID 

22 CHILD SUPPORT. 

23 (a) IN GENERAL.—Section 108 of the Internal Rev24 enue Code of 1986 (relating to discharge of indebtedness 
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1 income) is amended by adding at the end the following 

2 new subsection: 

3 ‘‘(h) UNPAID CHILD SUPPORT.—

4 ‘‘(1) IN GENERAL.—For purposes of this chap5 ter, any unpaid child support of a delinquent debtor 

6 for any taxable year shall be treated as amounts in7 cludible in gross income of the delinquent debtor for 

8 the taxable year. 

9 ‘‘(2) DETERMINATION OF WHETHER CHILD

10 SUPPORT IS UNPAID.—

11 ‘‘(A) IN GENERAL.—Child support shall be 

12 treated as paid if such payment is recorded by 

13 the State office of child support enforcement in 

14 which the custodial parent is registered. 

15 ‘‘(B) TIMELY MAILING AS TIMELY PAY16 MENT.—A payment received by the State office 

17 of child support enforcement in which the cus18 todial parent is registered after the last day of 

19 the custodial parent’s taxable year shall be 

20 treated for the purpose of this subsection as 

21 paid on such day if the postmark date falls on 

22 or before such day. The rules of section 7502(f) 

23 and regulations issued thereunder shall apply 

24 for purposes of this subparagraph. 
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1 ‘‘(3) DEFINITIONS.—For the purposes of this 

2 subsection—

3 ‘‘(A) CHILD SUPPORT.—The term ‘child 

4 support’ means—

5 ‘‘(i) any periodic payment of a fixed 

6 amount, or 

7 ‘‘(ii) any payment of a medical edu8 cation expense, insurance premium, or 

9 other similar item, 

10 which is required to be paid to a custodial par11 ent by an individual under a support instru12 ment for the support of any qualifying child of 

13 such individual. ‘Child support’ does not include 

14 any amount which is described in section 

15 408(a)(3) of the Social Security Act and which 

16 has been assigned to a State. 

17 ‘‘(B) CUSTODIAL PARENT.—The term ‘cus18 todial parent’ means an individual who is enti19 tled to receive child support and who has reg20 istered with the appropriate State office of child 

21 support enforcement charged with implementing 

22 section 454 of the Social Security Act. 

23 ‘‘(C) DELINQUENT DEBTOR.—The term 

24 ‘delinquent debtor’ means a taxpayer who owes 

25 unpaid child support to a custodial parent. 
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1 ‘‘(D) QUALIFYING CHILD.—The term 

2 ‘qualifying child’ means a child of a custodial 

3 parent with respect to whom a dependent de4 duction is allowable under section 151 for the 

5 taxable year (or would be so allowable but for 

6 paragraph (2) or (4) of section 152(e)). 

7 ‘‘(E) SUPPORT INSTRUMENT.—The term 

8 ‘support instrument’ means—

9 ‘‘(i) a decree of divorce or separate 

10 maintenance or a written instrument inci11 dent to such a decree, 

12 ‘‘(ii) a written separation agreement, 

13 or 

14 ‘‘(iii) a decree (not described in clause 

15 (i)) of a court or administrative agency re16 quiring a parent to make payments for the 

17 support or maintenance of 1 or more chil18 dren of such parent. 

19 ‘‘(F) UNPAID CHILD SUPPORT.—The term 

20 ‘unpaid child support’ means child support that 

21 is payable for months during a custodial par22 ent’s taxable year and unpaid as of the last day 

23 of such taxable year, provided that such unpaid 

24 amount as of such day equals or exceeds one-
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1 half of the total amount of child support due to 

2 the custodial parent for such year. 

3 ‘‘(4) COORDINATION WITH OTHER LAWS.—

4 Amounts treated as income by paragraph (1) shall 

5 not be treated as income by reason of paragraph (1) 

6 for the purposes of any provision of law which is not 

7 an internal revenue law.’’

8 SEC. 5. TAXPAYER INFORMATION REGARDING CHILD SUP9 PORT NOT BASIS FOR AUDIT. 

10 A discrepancy between the tax returns of a custodial 

11 parent and a delinquent debtor concerning whether a pay12 ment of child support has been made may not be used 

13 or relied upon by the Internal Revenue Service in any way 

14 in selecting an individual’s tax return for a general audit. 

15 SEC. 6. EFFECTIVE DATE; IMPLEMENTATION. 

16 (a) The amendments made by the Act shall apply to 

17 taxable years beginning after December 31, 2002. The 

18 Secretary of the Treasury shall publish Form 1099–CS 

19 (or such other form that may be prescribed to comply with 

20 section 3(a)(6) of this Act) regulations, if any, that may 

21 be deemed necessary to carry out the purposes of this Act, 

22 not later than 90 days after the date of enactment of this 

23 Act.

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