I 

111TH CONGRESS 

1ST SESSION H. R. 4147 

To provide for rollover treatment to traditional IRAs of amounts received 

in airline carrier bankruptcy. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2009 

Mr. LEWIS of Georgia (for himself and Mr. DAVIS of Kentucky) introduced 

the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To provide for rollover treatment to traditional IRAs of 

amounts received in airline carrier bankruptcy. 

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

3 SECTION 1. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE 

4 CARRIER BANKRUPTCY. 

5 (a) GENERAL RULES.— 

6 (1) ROLLOVER OF AIRLINE PAYMENT

7 AMOUNT.—If a qualified airline employee receives 

8 any airline payment amount and transfers any por9 tion of such amount to a traditional IRA within 180 

10 days of receipt of such amount (or, if later, within 


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1 180 days of the date of the enactment of this Act), 

2 then such amount (to the extent so transferred) 

3 shall be treated as a rollover contribution described 

4 in section 402(c) of the Internal Revenue Code of 

5 1986. A qualified airline employee making such a 

6 transfer may exclude from gross income the amount 

7 transferred, in the taxable year in which the airline 

8 payment amount was paid to the qualified airline 

9 employee by the commercial passenger airline car10 rier. 

11 (2) TRANSFER OF AMOUNTS ATTRIBUTABLE TO

12 AIRLINE PAYMENT AMOUNT FOLLOWING ROLLOVER

13 TO ROTH IRA.—A qualified airline employee who 

14 made a rollover of an airline payment amount to a 

15 Roth IRA pursuant to section 125 of the Worker, 

16 Retiree, and Employer Recovery Act of 2008, may 

17 transfer to a traditional IRA all or any part of the 

18 Roth IRA attributable to such rollover, and the 

19 transfer to the traditional IRA will be deemed to 

20 have been made at the time of the rollover to the 

21 Roth IRA, if such transfer is made within 180 days 

22 of the date of the enactment of this Act. A qualified 

23 airline employee making such a transfer may exclude 

24 from gross income the airline payment amount pre25 viously rolled over to the Roth IRA, to the extent an 


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1 amount attributable to the previous rollover was 

2 transferred to a traditional IRA, in the taxable year 

3 in which the airline payment amount was paid to the 

4 qualified airline employee by the commercial pas5 senger airline carrier. 

6 (3) EXTENSION OF TIME TO FILE CLAIM FOR

7 REFUND.—A qualified airline employee who excludes 

8 an amount from gross income in a prior taxable year 

9 under paragraph (1) or (2) may reflect such exclu10 sion in a claim for refund filed within the period of 

11 limitation under section 6511(a) (or, if later, April 

12 15, 2011). 

13 (b) TREATMENT OF AIRLINE PAYMENT AMOUNTS

14 AND TRANSFERS FOR EMPLOYMENT TAXES.—For pur15 poses of chapter 21 of the Internal Revenue Code of 1986 

16 and section 209 of the Social Security Act, an airline pay17 ment amount shall not fail to be treated as a payment 

18 of wages by the commercial passenger airline carrier to 

19 the qualified airline employee in the taxable year of pay20 ment because such amount is excluded from the qualified 

21 airline employee’s gross income under subsection (a). 

22 (c) DEFINITIONS AND SPECIAL RULES.—For pur23 poses of this section— 

24 (1) AIRLINE PAYMENT AMOUNT.— 


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1 (A) IN GENERAL.—The term ‘‘airline pay2 ment amount’’ means any payment of any 

3 money or other property which is payable by a 

4 commercial passenger airline carrier to a quali5 fied airline employee— 

6 (i) under the approval of an order of 

7 a Federal bankruptcy court in a case filed 

8 after September 11, 2001, and before Jan9 uary 1, 2007, and 

10 (ii) in respect of the qualified airline 

11 employee’s interest in a bankruptcy claim 

12 against the carrier, any note of the carrier 

13 (or amount paid in lieu of a note being 

14 issued), or any other fixed obligation of the 

15 carrier to pay a lump sum amount. 

16 The amount of such payment shall be deter17 mined without regard to any requirement to de18 duct and withhold tax from such payment 

19 under sections 3102(a) and 3402(a). 

20 (B) EXCEPTION.—An airline payment 

21 amount shall not include any amount payable 

22 on the basis of the carrier’s future earnings or 

23 profits. 

24 (2) QUALIFIED AIRLINE EMPLOYEE.—The term 

25 ‘‘qualified airline employee’’ means an employee or 


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1 former employee of a commercial passenger airline 

2 carrier who was a participant in a defined benefit 

3 plan maintained by the carrier which— 

4 (A) is a plan described in section 401(a) of 

5 the Internal Revenue Code of 1986 which in6 cludes a trust exempt from tax under section 

7 501(a) of such Code, and 

8 (B) was terminated or became subject to 

9 the restrictions contained in paragraphs (2) and 

10 (3) of section 402(b) of the Pension Protection 

11 Act of 2006. 

12 (3) TRADITIONAL IRA.—The term ‘‘traditional 

13 IRA’’ means an individual retirement plan (as de14 fined in section 7701(a)(37) of the Internal Revenue 

15 Code of 1986) which is not a Roth IRA. 

16 (4) ROTH IRA.—The term ‘‘Roth IRA’’ has the 

17 meaning given such term by section 408A(b) of such 

18 Code. 

19 (d) SURVIVING SPOUSE.—If a qualified airline em20 ployee died after receiving an airline payment amount, or 

21 if an airline payment amount was paid to the surviving 

22 spouse of a qualified airline employee in respect of the 

23 qualified airline employee, the surviving spouse of the 

24 qualified airline employee may take all actions permitted 

25 under section 125 of the Worker, Retiree and Employer 


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1 Recovery Act of 2008, or under this section, to the same 

2 extent that the qualified airline employee could have done 

3 had the qualified airline employee survived. 

4 (e) EFFECTIVE DATE.—This section shall apply to 

5 transfers made after the date of the enactment of this Act 

6 with respect to airline payment amounts paid before, on, 

7 or after such date. 

Æ 


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