I 

111TH CONGRESS 

1ST SESSION H. R. 1542 

To amend the Internal Revenue Code of 1986 to impose a 100 percent 

tax on bonuses paid by businesses that receive TARP assistance and 

are majority owned by the Federal Government. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2009 

Mrs. MALONEY (for herself, Mr. POMEROY, Mr. ENGEL, Ms. HIRONO, Mr. 

HIGGINS, and Mr. SPACE) 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 impose 

a 100 percent tax on bonuses paid by businesses that 

receive TARP assistance and are majority owned by the 

Federal Government. 

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

3 SECTION 1. 100 PERCENT TAX ON BONUSES PAID BY BUSI4 NESSES THAT RECEIVE TARP ASSISTANCE 

5 AND ARE MAJORITY OWNED BY THE FED6 ERAL GOVERNMENT. 

7 (a) IN GENERAL.—Section 1 of the Internal Revenue 

8 Code of 1986 (relating to tax imposed on individuals) is 


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1 amended by adding at the end the following new sub2 section: 

3 ‘‘(j) 100 PERCENT TAX ON BONUSES PAID BY BUSI4 NESSES THAT RECEIVE TARP ASSISTANCE AND ARE MA5 JORITY OWNED BY THE FEDERAL GOVERNMENT.— 

6 ‘‘(1) IN GENERAL.—In the case of any indi7 vidual who receives a bonus during the taxable year 

8 from a covered TARP person, the tax imposed by 

9 this section shall be equal to— 

10 ‘‘(A) the tax which would be imposed by 

11 this section if the taxable income of such indi12 vidual for the taxable year were reduced by 

13 such bonus, plus 

14 ‘‘(B) the amount equal to such bonus. 

15 ‘‘(2) BONUS.—For purposes of this sub16 section— 

17 ‘‘(A) IN GENERAL.—The term ‘bonus’ 

18 means any payment in the nature of a bonus 

19 which is paid by a person if— 

20 ‘‘(i) such person (or any predecessor 

21 of such person) received assistance under 

22 title I of division A of the Emergency Eco23 nomic Stabilization Act of 2008 during the 

24 taxable year or any prior taxable year, and 


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1 ‘‘(ii) at the time such bonus is paid 

2 the ownership interest of the Federal Gov3 ernment in such person is— 

4 ‘‘(I) in the case of a corporation, 

5 greater than 50 percent of the stock 

6 of such person (by vote or value), 

7 ‘‘(II) in the case of a partner8 ship, greater than 50 percent or more 

9 of the profits interests or capital in10 terests in such person, and 

11 ‘‘(III) in any other case, greater 

12 than 50 percent or more of the bene13 ficial interests in such person. 

14 ‘‘(B) EXCEPTION.—The term ‘bonus’ does 

15 not include compensation in the nature of a 

16 commission or salary. 

17 ‘‘(C) CONTROLLED GROUPS.— 

18 ‘‘(i) IN GENERAL.—For purposes of 

19 subparagraph (A), all persons treated as a 

20 single employer under subsection (a) or (b) 

21 of section 52 or under subsection (m) or 

22 (o) of section 414 shall be treated as one 

23 person. 

24 ‘‘(ii) INCLUSION OF FOREIGN COR25 PORATIONS.—For purposes of clause (i), in 


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1 applying subsections (a) and (b) of section 

2 52 to this section, section 1563 shall be 

3 applied without regard to subsection 

4 (b)(2)(C) thereof. 

5 ‘‘(3) REGULATIONS.—The Secretary shall issue 

6 such regulations or other guidance as may be nec7 essary to carry out this subsection.’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2008. 

Æ 


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