II

104TH CONGRESS

2D SESSION S. 1663

To amend the Internal Revenue Code of 1986 to improve revenue collection

and to provide that a taxpayer conscientiously opposed to participation

in war may elect to have such taxpayer’s income, estate, or gift tax

payments spent for nonmilitary purposes, to create the United States

Peace Tax Fund to receive such tax payments, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 29, 1996

Mr. HATFIELD (for himself and Mr. HARKIN) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to improve

revenue collection and to provide that a taxpayer conscientiously opposed to participation in war may elect

to have such taxpayer’s income, estate, or gift tax payments spent for nonmilitary purposes, to create the United States Peace Tax Fund to receive such tax payments,

and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘United States Peace

5 Tax Fund Act’’.
2

•S 1663 IS

1 SEC. 2. FINDINGS AND POLICY.

2 (a) FINDINGS.—The Congress finds that for a signifi3 cant minority of Americans sincere conscientious objection

4 to participation in war in any form means that such Amer5 icans cannot in conscience pay the portion of their taxes

6 that would support military expenditures.

7 (b) POLICY.—It is the policy of the Congress—

8 (1) to improve revenue collections and to allow

9 conscientious objectors to pay their full tax liability

10 without violating their moral, ethical, or religious be11 liefs;

12 (2) to reduce the present administrative and ju13 dicial burden created by conscientious objectors who

14 violate tax laws rather than violate their consciences;

15 (3) to recognize conscientious objector status

16 with regard to the payment of taxes for military pur17 poses; and

18 (4) to provide a mechanism for congressional

19 appropriations of such funds for nonmilitary pur20 poses.

21 SEC. 3. UNITED STATES PEACE TAX FUND.

22 (a) CREATION OF TRUST FUND.—There is hereby es23 tablished within the Treasury of the United States a spe24 cial trust fund to be known as the ‘‘United States Peace

25 Tax Fund’’ (hereinafter referred to as the ‘‘Fund’’). The
3

•S 1663 IS

1 Fund shall consist of such amounts as may be transferred

2 to the Fund as provided in this section.

3 (b) TRANSFER TO FUND OF AMOUNTS EQUIVALENT

4 TO CERTAIN TAXES.—

5 (1) IN GENERAL.—There are hereby transferred

6 to the Fund amounts equivalent to the sum of the

7 amounts designated during the fiscal year by indi8 viduals under sections 2210, 2506, and 6099 of the

9 Internal Revenue Code of 1986 for payment into the

10 Fund. Such amounts shall be deposited into the

11 Fund and shall be available only for the purposes

12 provided in this Act.

13 (2) METHOD OF TRANSFER.—The amounts

14 transferred by paragraph (1) shall be transferred at

15 least monthly from the general fund of the Treasury

16 to the Fund on the basis of estimates by the Sec17 retary of the Treasury of the amounts, referred to

18 in paragraph (1), received in the Treasury. Proper

19 adjustments shall be made in the amounts subse20 quently transferred to the extent that prior esti21 mates were in excess of or less than the amounts re22 quired to be transferred.

23 (3) REPORT.—The Secretary of the Treasury

24 shall report to the Committees on Appropriations of

25 the House of Representatives and the Senate each
4

•S 1663 IS

1 year on the total amount transferred into the Fund

2 during the preceding fiscal year. Such report shall

3 be printed in the Congressional Record upon receipt

4 by the committees.

5 SEC. 4. INCOME TAX PAYMENTS TO UNITED STATES PEACE

6 TAX FUND.

7 (a) IN GENERAL.—Subchapter A of chapter 61 of the

8 Internal Revenue Code of 1986 (relating to information

9 and returns) is amended by adding at the end the follow10 ing new part:

11 ‘‘PART IX—DESIGNATION OF INCOME TAX PAY12 MENTS FOR TRANSFER TO UNITED STATES

13 PEACE TAX FUND

‘‘Sec. 6099. Designation by individuals.

14 ‘‘SEC. 6099. DESIGNATION BY INDIVIDUALS.

15 ‘‘(a) IN GENERAL.—Every eligible individual (other

16 than a nonresident alien) whose income tax liability for

17 any taxable year is $1 or more may designate that such

18 individual’s income tax payment for such year shall be

19 paid into the United States Peace Tax Fund established

20 by section 3 of the United States Peace Tax Fund Act.

21 ‘‘(b) DEFINITIONS.—For purposes of this section—

22 ‘‘(1) ELIGIBLE INDIVIDUAL.—

23 ‘‘(A) IN GENERAL.—The term ‘eligible in24 dividual’ means an individual who by reason of
5

•S 1663 IS

1 religious training and belief is conscientiously

2 opposed to participation in war in any form,

3 and who—

4 ‘‘(i) has been exempted or discharged

5 from combatant training and service in the

6 Armed Forces of the United States as a

7 conscientious objector under section 6(j) of

8 the Military Selective Service Act (50

9 U.S.C. App. 456(j)), or corresponding law,

10 or

11 ‘‘(ii) certified in a statement in a

12 questionnaire return made under section

13 6039F that such individual is conscien14 tiously opposed to participation in war in

15 any form within the meaning of section

16 6(j) of such Act.

17 ‘‘(B) VERIFICATION.—

18 ‘‘(i) QUESTIONNAIRE RETURN RE19 CEIPT.—Any taxpayer who makes a des20 ignation under subsection (a) shall attach

21 the questionnaire return receipt provided

22 under section 6039F(b) to such taxpayer’s

23 return of tax.

24 ‘‘(ii) ADDITIONAL INFORMATION MAY

25 BE REQUIRED.—The Secretary may re-
6

•S 1663 IS

1 quire any taxpayer who makes a designa2 tion under subsection (a) to provide such

3 additional information as may be necessary

4 to verify such taxpayer’s status as an eligi5 ble individual.

6 ‘‘(C) DENIAL OF DESIGNATION.—If the

7 Secretary determines that a taxpayer who

8 makes the designation provided for by sub9 section (a) is not an eligible individual and is

10 not entitled to make such designation, then the

11 Secretary, upon written notice to the taxpayer

12 stating the reasons for denial, may deny the

13 designation. The taxpayer may challenge the

14 Secretary’s ruling by bringing an action in the

15 United States Tax Court, or in the United

16 States district court for the district of such tax17 payer’s residence, for a declaratory judgment as

18 to whether the taxpayer is an eligible individual

19 and entitled to make such a designation.

20 ‘‘(2) INCOME TAX LIABILITY.—The term ‘in21 come tax liability’ means the amount of the tax im22 posed by chapter 1 on a taxpayer for any taxable

23 year (as shown on such taxpayer’s tax return) re24 duced by the sum of—
7

•S 1663 IS

1 ‘‘(A) the credits (as shown in such return)

2 allowable under part IV of subchapter A of

3 chapter 1 (other than subpart C thereof), and

4 ‘‘(B) the amount designated under section

5 6096.

6 ‘‘(3) INCOME TAX PAYMENT.—The term ‘in7 come tax payment’ means the amount of taxes im8 posed by chapter 1 and paid by or withheld from a

9 taxpayer for any taxable year not in excess of such

10 taxpayer’s income tax liability.

11 ‘‘(c) MANNER AND TIME OF DESIGNATION.—A des12 ignation under subsection (a) may be made with respect

13 to any taxable year either—

14 ‘‘(1) at the time of filing the return of the tax

15 imposed by chapter 1 for such taxable year, or

16 ‘‘(2) at any other time (after the time of filing

17 the return of the tax imposed by chapter 1 for such

18 taxable year) specified in regulations prescribed by

19 the Secretary.

20 Such designation shall be made in such manner as the

21 Secretary prescribes by regulations except that, if such

22 designation is made at the time described in paragraph

23 (1), such designation shall be made on the page bearing

24 the taxpayer’s signature.
8

•S 1663 IS

1 ‘‘(d) SPECIAL RULE IN THE CASE OF JOINT RE2 TURN.—In the case of an eligible individual filing a joint

3 return, upon the consent of such individual’s spouse, the

4 joint income tax payment may be designated pursuant to

5 subsection (a).

6 ‘‘(e) EXPLANATION OF UNITED STATES PEACE TAX

7 FUND PURPOSES.—Each publication of general instruc8 tions accompanying an income tax return or a question9 naire return described in section 6039F shall include—

10 ‘‘(1) an explanation of the purpose of the

11 United States Peace Tax Fund,

12 ‘‘(2) the criteria for determining whether an in13 dividual meets the requirements of section 6(j) of

14 the Military Selective Service Act (50 U.S.C. App.

15 456(j)), and

16 ‘‘(3) an explanation of the process for making

17 the designation provided by this section.’’.

18 (b) CLERICAL AMENDMENTS.—The table of parts of

19 subchapter A of chapter 61 of the Internal Revenue Code

20 of 1986 is amended by adding at the end the following

21 new item:

‘‘Part IX—Designation of income tax payments for transfer to

United States Peace Tax Fund.’’.

22 (c) DESIGNATION INFORMATION.—

23 (1) Subpart A of part III of subchapter A of

24 chapter 61 of the Internal Revenue Code of 1986
9

•S 1663 IS

1 (relating to information and returns) is amended by

2 adding at the end the following new section:

3 ‘‘SEC. 6039F. UNITED STATES PEACE TAX FUND DESIGNA4 TION INFORMATION.

5 ‘‘(a) QUESTIONNAIRE RETURN.—Every taxpayer who

6 makes a designation described in section 6099(a) for any

7 taxable year shall make a questionnaire return during

8 such year as described in this section. The questionnaire

9 return shall request the taxpayer to certify such taxpayer’s

10 beliefs about participation in war, the source or genesis

11 of such beliefs, and how the beliefs affect the taxpayer’s

12 life.

13 ‘‘(b) QUESTIONNAIRE RETURN RECEIPT.—Upon re14 ceipt of a questionnaire return that is timely filed, the Sec15 retary shall issue a receipt to the taxpayer indicating time16 ly filing of such return.’’.

17 (2) The table of sections for such subpart is

18 amended by adding at the end the following new

19 item:

‘‘Sec. 6039F. United States Peace Tax Fund designation information.’’.

20 (d) EFFECTIVE DATE.—The amendments made by

21 this section shall apply with respect to—

22 (1) taxable years beginning after December 31,

23 1996, and
10

•S 1663 IS

1 (2) any taxable year ending before January 1,

2 1997, for which the time for filing a claim for re3 fund or credit of an overpayment of tax has not ex4 pired on the date of the enactment of this Act.

5 (e) RULES APPLICABLE TO RETURNS OF TAX FOR

6 TAXABLE YEARS ENDING BEFORE DATE OF ENACT7 MENT.—

8 (1) PENALTIES FOR FAILURE TO PAY TAX.—

9 Notwithstanding any other law, any person’s failure

10 or refusal, before the date of the enactment of this

11 Act, to pay all or a part of the tax imposed by chap12 ter 1 of the Internal Revenue Code of 1986 shall not

13 be a violation of Federal law if the person—

14 (A) pays the tax due (with interest), and

15 (B) establishes to the satisfaction of the

16 Secretary of the Treasury that the failure or re17 fusal to pay was based upon such person’s con18 scientious objection to participation in war in

19 any form within the meaning of section

20 6099(b)(1)(A) of such Code (defining eligible

21 individual).

22 (2) DISPOSITION OF AMOUNTS COLLECTED.—

23 There are hereby transferred to the Fund amounts

24 equivalent to the sum of the amounts paid into the

25 Treasury by persons under the provisions of para-
11

•S 1663 IS

1 graph (1). Such amounts shall be deposited into the

2 Fund and shall be available only for the purposes

3 provided in this Act.

4 SEC. 5. ESTATE TAX PAYMENTS TO UNITED STATES PEACE

5 TAX FUND.

6 (a) IN GENERAL.—Subchapter C of chapter 11 of the

7 Internal Revenue Code of 1986 is amended by adding at

8 the end the following new section:

9 ‘‘SEC. 2210. DESIGNATION OF ESTATE TAX PAYMENTS FOR

10 TRANSFER TO UNITED STATES PEACE TAX

11 FUND.

12 ‘‘An eligible individual (within the meaning of section

13 6099(b)(1)) may elect that the tax imposed by section

14 2001 on the taxable estate of such individual shall be

15 transferred when paid to the United States Peace Tax

16 Fund established by section 3 of the United States Peace

17 Tax Fund Act. The election may be made by the executor

18 or administrator of the estate under written authority of

19 the decedent. Such election shall be made in such manner

20 as the Secretary shall by regulations prescribe.’’.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 for subchapter C of chapter 11 of the Internal Revenue

23 Code of 1986 is amended by adding at the end the follow24 ing:

‘‘Sec. 2210. Designation of estate tax payments for transfer to

United States Peace Tax Fund.’’.
12

•S 1663 IS

1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply with respect to the estates of dece3 dents dying after December 31, 1996.

4 SEC. 6. GIFT TAX PAYMENTS TO UNITED STATES PEACE

5 TAX FUND.

6 (a) IN GENERAL.—Subchapter A of chapter 12 of the

7 Internal Revenue Code of 1986 is amended by adding at

8 the end the following new section:

9 ‘‘SEC. 2506. DESIGNATION OF GIFT TAX PAYMENTS FOR

10 TRANSFER TO UNITED STATES PEACE TAX

11 FUND.

12 ‘‘Any eligible individual (within the meaning of sec13 tion 6099(b)(1)) may elect that the tax imposed by section

14 2501 shall be transferred when paid to the United States

15 Peace Tax Fund established by section 3 of the United

16 States Peace Tax Fund Act. The election shall be made

17 in such manner as the Secretary shall by regulations pre18 scribe.’’.

19 (b) CLERICAL AMENDMENT.—The table of sections

20 for subchapter A of chapter 12 of the Internal Revenue

21 Code of 1986 is amended by adding at the end the follow22 ing new item:

‘‘Sec. 2506. Designation of gift tax payments for transfer to

United States Peace Tax Fund.’’.
13

•S 1663 IS

1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply with respect to gifts made after

3 December 31, 1996.

4 SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

5 (a) CERTIFICATION BY COMPTROLLER GENERAL.—

6 As soon after the close of each fiscal year as may be prac7 ticable, the Comptroller General shall determine and cer8 tify to the Congress and to the President the percentage

9 of actual appropriations made for a military purpose with

10 respect to such fiscal year. The certification shall be pub11 lished in the Congressional Record upon receipt by the

12 Congress.

13 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

14 hereby authorized to be appropriated for each fiscal year

15 a certain portion of the Fund for obligation and expendi16 ture in accordance with the provisions of this Act. Such

17 portion is equal to an amount which is the sum of—

18 (1) the product of—

19 (A) all funds transferred to the Fund in

20 the previous fiscal year, times

21 (B) the percentage determined under sub22 section (a) for such previous fiscal year, plus

23 (2) all funds in the Fund previously authorized

24 to be appropriated under this subsection but not yet

25 appropriated pursuant to this Act.
14

•S 1663 IS

1 Funds remaining in the Fund shall accrue interest accord2 ing to the prevailing rate in long-term Government bonds.

3 (c) SURPLUS COVERED INTO GENERAL FUND.—For

4 each fiscal year, the portion of the Fund which is attrib5 utable to funds transferred to the Fund in the previous

6 fiscal year and which is not authorized to be appropriated

7 under subsection (b) is hereby covered into the general

8 fund of the Treasury of the United States. No part of

9 the funds transferred to the general fund under this sub10 section shall be appropriated for any expenditures, or oth11 erwise obligated, for a military purpose.

12 SEC. 8. ELIGIBLE APPROPRIATIONS.

13 (a) PAYMENTS.—Funds appropriated pursuant to the

14 authorization under section 7(b) shall be available, subject

15 to appropriation, to make grants, loans, or other arrange16 ments for eligible activities described in subsection (b).

17 (b) ELIGIBLE ACTIVITIES.—The following activities

18 are eligible to receive funds under subsection (a):

19 (1) Special Supplemental Food Program for

20 Women, Infants and Children (WIC).

21 (2) Head Start.

22 (c) DISPLACEMENT OF OTHER FUNDS.—It is the in23 tent of this Act that the Fund shall not operate to release

24 funds for military expenditures which, were it not for the
15

•S 1663 IS

1 existence of the Fund, would otherwise have been appro2 priated for nonmilitary expenditures.

3 SEC. 9. DEFINITIONS.

4 For the purposes of this Act—

5 (1) The term ‘‘military purpose’’ means any ac6 tivity or program which any agency of the Govern7 ment conducts, administers, or sponsors and which

8 effects an augmentation of military forces or of de9 fensive and offensive intelligence activities, or en10 hances the capability of any person or nation to

11 wage war.

12 (2) The term ‘‘actual appropriations made for

13 a military purpose’’ includes, but is not limited to,

14 amounts appropriated by the United States in con15 nection with—

16 (A) the Department of Defense;

17 (B) the Central Intelligence Agency;

18 (C) the National Security Council;

19 (D) the Selective Service System;

20 (E) activities of the Department of Energy

21 that have a military purpose;

22 (F) activities of the National Aeronautics

23 and Space Administration that have a military

24 purpose;

25 (G) foreign military aid; and
16

•S 1663 IS

1 (H) the training, supplying, or maintaining

2 of military personnel, or the manufacture, con3 struction, maintenance, or development of mili4 tary weapons, installations, or strategies.

5 (3) The term ‘‘agency’’ means each authority of

6 the Government of the United States, whether or

7 not it is within or subject to review by another agen8 cy, but does not include—

9 (A) the Congress; or

10 (B) the courts of the United States.

11 (4) The term ‘‘person’’ includes an individual,

12 partnership, corporation, association, or public or

13 private organization other than an agency.

14 SEC. 10. SEPARABILITY.

15 If any section, subsection, or other provision of this

16 Act, or the application thereof to any person or cir17 cumstance, is held invalid, the remainder of this Act and

18 the application of such section, subsection, or other provi19 sion to other persons or circumstances shall not be af20 fected thereby.

Æ