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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 482 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 482

 To amend the Internal Revenue Code of 1986 to exempt certain personal 
 service corporations from restrictions on deducting accrued year-end 
       regular periodic compensation payable to owner-employees.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 6, 1993

  Mr. Stark 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 exempt certain personal 
 service corporations from restrictions on deducting accrued year-end 
       regular periodic compensation payable to owner-employees.

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

SECTION 1. DEDUCTION BY PERSONAL SERVICE CORPORATION OF CERTAIN ACCRUED 
              YEAR-END COMPENSATION PAYABLE TO OWNER-EMPLOYEES.

    (a) In General.--Section 267 of the Internal Revenue Code of 1986 
(relating to losses, expenses, and interest with respect to 
transactions between related taxpayers) is amended by adding at the end 
thereof the following new subsection:
    ``(h) Year-End Regular Compensation Paid to Owner-Employees of 
Personal Service Corporation.--
            ``(1) In general.--In the case of a qualified personal 
        service corporation, the last sentence of subsection (a)(2) 
        shall not apply to qualified compensation to be paid by such 
        corporation to any employee who is not a key employee (as 
        defined in section 416(i)).
            ``(2) Qualified compensation.--For purposes of paragraph 
        (1), the term `qualified compensation' means compensation 
        payable to an employee for the payroll period ending at the 
        close of such corporation's taxable year if--
                    ``(A) such payroll period is a semi-monthly or 
                shorter period,
                    ``(B) such employee is regularly paid on the basis 
                of semi-monthly or shorter payroll periods, and
                    ``(C) such compensation is solely for hours of 
                service performed or is such payroll period's ratable 
                share of such employee's annual basic rate of 
                compensation.
            ``(3) Qualified personal service corporation.--For purposes 
        of paragraph (1), the term `qualified personal service 
        corporation' means any personal service corporation (within the 
        meaning of section 441(i)(2)) using an accrual method of 
        accounting for its last taxable year ending before the date of 
        the enactment of this subsection.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1992.

                                 <all>
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