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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 622 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 622

To amend the Internal Revenue Code of 1986 to exclude from gross income 
  rewards received by reason of providing information leading to the 
    conviction of a crime to the extent that the reward is used to 
                      compensate victims of crime.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 1999

  Mr. Houghton (for himself, Mr. McNulty, Mr. Towns, Mr. LaFalce, Mr. 
Frost, Mr. King, Mr. Neal of Massachusetts, Mr. Hayworth, Mr. Hinchey, 
Mr. Hinojosa, and Mr. Waxman) 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 exclude from gross income 
  rewards received by reason of providing information leading to the 
    conviction of a crime to the extent that the reward is used to 
                      compensate victims of crime.

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

SECTION 1. EXCLUSION FROM INCOME OF CERTAIN REWARDS USED TO COMPENSATE 
              VICTIMS OF CRIME.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 139 as section 
140 and by inserting after section 138 the following new section:

``SEC. 139. CERTAIN REWARDS USED TO COMPENSATE VICTIMS OF CRIME.

    ``(a) In General.--Gross income shall not include an amount 
received as a reward for providing information leading to a conviction 
of a crime to the extent such amount is used for a qualified purpose 
within 1 year after the date such amount is received.
    ``(b) Qualified Purpose.--For purposes of subsection (a)--
            ``(1) In general.--The term `qualified purpose' means 
        making payments to--
                    ``(A) the victims (or their families) of the crime 
                to which the reward relates,
                    ``(B) an irrevocable trust established exclusively 
                for the benefit of such victims and their families, or
                    ``(C) an organization which is described in section 
                501(c)(3) and exempt from tax under section 501(a) and 
                the principal purpose of which is to provide 
                compensation to victims of crime.
            ``(2) Attorneys fees eligible if victims receive portion of 
        reward.--Such term includes payments to the taxpayer's 
        attorneys for attorneys' fees incurred by the taxpayer in 
        connection with the case if substantially all of the reward 
        (other than amounts paid to such attorneys) is paid for a 
        qualified purpose described in paragraph (1).
    ``(c) Special Rules.--In the case of a payment by the taxpayer 
which is taken into account under subsection (b)--
            ``(1) no deduction shall be allowed under this title for 
        such payment, and
            ``(2) such payment shall not be treated as a gift for 
        purposes of subtitle B.''
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following:

                              ``Sec. 139. Certain rewards used to 
                                        compensate victims of crime.
                              ``Sec. 140. Cross references to other 
                                        Acts.''
    (c) Effective Date.--The amendments made by this section shall 
apply to rewards received after December 31, 1997. In no event shall 
the 1-year period referred to in section 139(a) of the Internal Revenue 
Code of 1986 (as added by this section) expire before the 60th day 
after the date of the enactment of this Act.
                                 <all>
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