II 

Calendar No. 36 

111TH CONGRESS 

1ST SESSION H. R. 1586 

IN THE SENATE OF THE UNITED STATES 

MARCH 19, 2009 

Received and read the first time 

MARCH 23, 2009 

Read the second time and placed on the calendar 

AN ACT 

To impose an additional tax on bonuses received from certain 

TARP recipients. 

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

3 SECTION 1. BONUSES RECEIVED FROM CERTAIN TARP RE4 CIPIENTS. 

5 (a) IN GENERAL.—In the case of an employee or 

6 former employee of a covered TARP recipient, the tax im7 posed by chapter 1 of the Internal Revenue Code of 1986 

8 for any taxable year shall not be less than the sum of— 

9 (1) the tax that would be determined under 

10 such chapter if the taxable income of the taxpayer 


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1 for such taxable year were reduced (but not below 

2 zero) by the TARP bonus received by the taxpayer 

3 during such taxable year, plus 

4 (2) 90 percent of the TARP bonus received by 

5 the taxpayer during such taxable year. 

6 (b) TARP BONUS.—For purposes of this section— 

7 (1) IN GENERAL.—The term ‘‘TARP bonus’’ 

8 means, with respect to any individual for any taxable 

9 year, the lesser of— 

10 (A) the aggregate disqualified bonus pay11 ments received from covered TARP recipients 

12 during such taxable year, or 

13 (B) the excess of— 

14 (i) the adjusted gross income of the 

15 taxpayer for such taxable year, over 

16 (ii) $250,000 ($125,000 in the case of 

17 a married individual filing a separate re18 turn). 

19 (2) DISQUALIFIED BONUS PAYMENT.— 

20 (A) IN GENERAL.—The term ‘‘disqualified 

21 bonus payment’’ means any retention payment, 

22 incentive payment, or other bonus which is in 

23 addition to any amount payable to such indi24 vidual for service performed by such individual 


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1 at a regular hourly, daily, weekly, monthly, or 

2 similar periodic rate. 

3 (B) EXCEPTIONS.—Such term shall not in4 clude commissions, welfare or fringe benefits, or 

5 expense reimbursements. 

6 (C) WAIVER OR RETURN OF PAYMENTS.— 

7 Such term shall not include any amount if the 

8 employee irrevocably waives the employee’s enti9 tlement to such payment, or the employee re10 turns such payment to the employer, before the 

11 close of the taxable year in which such payment 

12 is due. The preceding sentence shall not apply 

13 if the employee receives any benefit from the 

14 employer in connection with the waiver or re15 turn of such payment. 

16 (3) REIMBURSEMENT OF TAX TREATED AS

17 TARP BONUS.—Any reimbursement by a covered 

18 TARP recipient of the tax imposed under subsection 

19 (a) shall be treated as a disqualified bonus payment 

20 to the taxpayer liable for such tax. 

21 (c) COVERED TARP RECIPIENT.—For purposes of 

22 this section— 

23 (1) IN GENERAL.—The term ‘‘covered TARP 

24 recipient’’ means— 


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1 (A) any person who receives after Decem2 ber 31, 2007, capital infusions under the Emer3 gency Economic Stabilization Act of 2008 

4 which, in the aggregate, exceed $5,000,000,000, 

5 (B) the Federal National Mortgage Asso6 ciation and the Federal Home Loan Mortgage 

7 Corporation, 

8 (C) any person who is a member of the 

9 same affiliated group (as defined in section 

10 1504 of the Internal Revenue Code of 1986, de11 termined without regard to paragraphs (2) and 

12 (3) of subsection (b)) as a person described in 

13 subparagraph (A) or (B), and 

14 (D) any partnership if more than 50 per15 cent of the capital or profits interests of such 

16 partnership are owned directly or indirectly by 

17 one or more persons described in subparagraph 

18 (A), (B), or (C). 

19 (2) EXCEPTION FOR TARP RECIPIENTS WHO

20 REPAY ASSISTANCE.—A person shall be treated as 

21 described in paragraph (1)(A) for any period only 

22 if— 

23 (A) the excess of the aggregate amount of 

24 capital infusions described in paragraph (1)(A) 

25 with respect to such person over the amounts 


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1 repaid by such person to the Federal Govern2 ment with respect to such capital infusions, ex3 ceeds 

4 (B) $5,000,000,000. 

5 (d) OTHER DEFINITIONS.—Terms used in this sec6 tion which are also used in the Internal Revenue Code of 

7 1986 shall have the same meaning when used in this sec8 tion as when used in such Code. 

9 (e) COORDINATION WITH INTERNAL REVENUE CODE

10 OF 1986.—Any increase in the tax imposed under chapter 

11 1 of the Internal Revenue Code of 1986 by reason of sub12 section (a) shall not be treated as a tax imposed by such 

13 chapter for purposes of determining the amount of any 

14 credit under such chapter or for purposes of section 55 

15 of such Code. 

16 (f) REGULATIONS.—The Secretary of the Treasury, 

17 or the Secretary’s delegate, shall prescribe such regula18 tions or other guidance as may be necessary or appro19 priate to carry out the purposes of this section. 

20 (g) EFFECTIVE DATE.—This section shall apply to 

21 disqualified bonus payments received after December 31, 

22 2008, in taxable years ending after such date. 

Passed the House of Representatives March 19, 

2009. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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Calendar No. 36 

111TH CONGRESS 

1ST SESSION H. R. 1586 

AN ACT 

To impose an additional tax on bonuses received 

from certain TARP recipients. 

MARCH 23, 2009 

Read the second time and placed on the calendar 


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