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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 630 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 630

 To amend the Internal Revenue Code of 1986 to reiterate the denial of 
  the charitable contribution deduction for transfers associated with 
                  split-dollar insurance arrangements.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 9, 1999

Mr. Archer (for himself and Mr. Rangel) 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 reiterate the denial of 
  the charitable contribution deduction for transfers associated with 
                  split-dollar insurance arrangements.

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

SECTION 1. CHARITABLE SPLIT-DOLLAR LIFE INSURANCE, ANNUITY, AND 
              ENDOWMENT CONTRACTS.

    (a) In General.--Subsection (f) of section 170 of the Internal 
Revenue Code of 1986 (relating to disallowance of deduction in certain 
cases and special rules) is amended by adding at the end the following 
new paragraph:
            ``(10) Split-dollar life insurance, annuity, and endowment 
        contracts.--
                    ``(A) In general.--Nothing in this section or in 
                section 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), 
                or 2522 shall be construed to allow a deduction, and no 
                deduction shall be allowed, for any transfer to or for 
                the use of an organization described in subsection (c) 
                if in connection with such transfer--
                            ``(i) the organization directly or 
                        indirectly pays, or has previously paid, any 
                        premium on any personal benefit contract with 
                        respect to the transferor, or
                            ``(ii) there is an understanding or 
                        expectation that any person will directly or 
                        indirectly pay any premium on any personal 
                        benefit contract with respect to the 
                        transferor.
                    ``(B) Personal benefit contract.--For purposes of 
                subparagraph (A), the term `personal benefit contract' 
                means, with respect to the transferor, any life 
                insurance, annuity, or endowment contract if any direct 
                or indirect beneficiary under such contract is the 
                transferor, any member of the transferor's family, or 
                any other person (other than an organization described 
                in subsection (c)) designated by the transferor.
                    ``(C) Excise tax on premiums paid.--
                            ``(i) In general.--There is hereby imposed 
                        on any organization described in subsection (c) 
                        an excise tax equal to the premiums paid by 
                        such organization on any life insurance, 
                        annuity, or endowment contract if the payment 
                        of premiums on such contract is in connection 
                        with a transfer for which a deduction is not 
                        allowable under subparagraph (A).
                            ``(ii) Payments by other persons.--For 
                        purposes of clause (i), payments made by any 
                        other person pursuant to an understanding or 
                        expectation referred to in subparagraph (A) 
                        shall be treated as made by the organization.
                            ``(iii) Reporting.--Any organization on 
                        which tax is imposed by clause (i) with respect 
                        to any premium shall file an annual return 
                        which includes--
                                    ``(I) the amount of such premiums 
                                paid during the year and the name and 
                                TIN of each beneficiary under the 
                                contract to which the premium relates, 
                                and
                                    ``(II) such other information as 
                                the Secretary may require.
                        The penalties applicable to returns required 
                        under section 6033 shall apply to returns 
                        required under this clause. Returns required 
                        under this clause shall be furnished at such 
                        time and in such manner as the Secretary shall 
                        by forms or regulations require.
                    ``(D) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary to carry out the 
                purposes of this paragraph.''
    (b) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendment made by this section shall apply to 
        transfers made after February 8, 1999.
            (2) Excise tax.--Except as provided in paragraph (3) of 
        this subsection, section 170(f)(10)(C) of the Internal Revenue 
        Code of 1986 (as added by this section) shall apply to premiums 
        paid after the date of the enactment of this Act.
            (3) Reporting.--Clause (iii) of such section 170(f)(10)(C) 
        shall apply to premiums paid after February 8, 1999 (determined 
        as if the tax imposed by such section applies to premiums paid 
        after such date).
                                 <all>
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