II

103D CONGRESS

2D SESSION S. 2028

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

APRIL 19 (legislative day, APRIL 11), 1994

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 SEC. 2. FINDINGS AND POLICY.

4 (a) FINDINGS.—The Congress finds that for a signifi5 cant minority of Americans, sincere conscientious objec-
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1 tion to participation in war in any form means that such

2 Americans cannot in conscience pay the portion of their

3 taxes that would support military expenditures.

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

5 (1) to improve revenue collections and to allow

6 conscientious objectors to pay their full tax liability

7 without violating their moral, ethical, or religious be8 liefs;

9 (2) to reduce the present administrative and ju10 dicial burden created by conscientious objectors who

11 violate tax laws rather than violate their consciences;

12 (3) to recognize conscientious objector status

13 with regard to the payment of taxes for military pur14 poses; and

15 (4) to provide a mechanism for congressional

16 appropriations of such funds for nonmilitary pur17 poses.

18 SEC. 3. UNITED STATES PEACE TAX FUND.

19 (a) CREATION OF TRUST FUND.—There is hereby es20 tablished within the Treasury of the United States a spe21 cial trust fund to be known as the ‘‘United States Peace

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

23 Fund shall consist of such amounts as may be transferred

24 to the Fund as provided in this section.
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1 (b) TRANSFER TO FUND OF AMOUNTS EQUIVALENT

2 TO CERTAIN TAXES.—

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

4 to the Fund amounts equivalent to the sum of the

5 amounts designated during the fiscal year by indi6 viduals under sections 2210, 2506, and 6099 of the

7 Internal Revenue Code of 1986 for payment into the

8 Fund. Such amounts shall be deposited into the

9 Fund and shall be available only for the purposes

10 provided in this Act.

11 (2) METHOD OF TRANSFER.—The amounts

12 transferred by paragraph (1) shall be transferred at

13 least monthly from the general fund of the Treasury

14 to the Fund on the basis of estimates by the Sec15 retary of the Treasury of the amounts, referred to

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

17 adjustments shall be made in the amounts subse18 quently transferred to the extent that prior esti19 mates were in excess of or less than the amounts re20 quired to be transferred.

21 (3) REPORT.—It shall be the duty of the Sec22 retary of the Treasury to report to the Committee

23 on Appropriations of the House of Representatives

24 and the Senate each year on the total amount trans25 ferred into the Fund during the preceding fiscal
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1 year. Such report shall be printed in the Congres2 sional Record upon receipt by the committees.

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

4 TAX FUND.

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

6 Internal Revenue Code of 1986 (relating to information

7 and records) is amended by adding at the end thereof the

8 following new part:

9 ‘‘PART IX—DESIGNATION OF INCOME TAX PAY10 MENTS FOR TRANSFER TO UNITED STATES

11 PEACE TAX FUND

‘‘Sec. 6099. Designation by individuals.

12 ‘‘SEC. 6099. DESIGNATION BY INDIVIDUALS.

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

14 than a nonresident alien) whose income tax liability for

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

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

17 paid into the United States Peace Tax Fund established

18 by section 3 of the United States peace Tax Fund Act.

19 ‘‘(b) DEFINITIONS.—As used in this section:

20 ‘‘(1) ELIGIBLE INDIVIDUAL.—

21 ‘‘(A) IN GENERAL.—The term ‘eligible in22 dividual’ means an individual who by reason of

23 religious training and belief is conscientiously
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1 opposed to participation in war in any form,

2 and who—

3 ‘‘(i) has been exempted or discharged

4 from combatant service and training in the

5 Armed Forces of the United States as a

6 conscientious objector under section 6(j) of

7 the Military Selective Service Act (50

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

9 or

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

11 questionnaire return made under section

12 6039F that such individual is conscien13 tiously opposed to participation in war in

14 any form within the meaning of section

15 6(j) of such Act.

16 ‘‘(B) VERIFICATION.—

17 ‘‘(i) QUESTIONNAIRE RETURN RE18 CEIPT.—Any taxpayer who makes a des19 ignation under subsection (a) shall attach

20 the questionnaire return receipt provided

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

22 return of tax.

23 ‘‘(ii) ADDITIONAL INFORMATION MAY

24 BE REQUIRED.—The Secretary may re25 quire any taxpayer who makes a designa-
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1 tion under subsection (a) to provide such

2 additional information as may be necessary

3 to verify such taxpayer’s status as an eligi4 ble individual.

5 ‘‘(C) DENIAL OF DESIGNATION.—If the

6 Secretary determines that a taxpayer who

7 makes the designation provided for by sub8 section (a) is not an eligible individual and is

9 not entitled to make such designation, then the

10 Secretary, upon written notice to the taxpayer

11 stating the reasons for denial, may deny the

12 designation. The taxpayer may challenge the

13 Secretary’s ruling by bringing an action in the

14 United States Tax Court or in the United

15 States district court for the district of such tax16 payer’s residence, for a declaratory judgment as

17 to whether the taxpayer is an eligible individual

18 and entitled to make such a designation.

19 ‘‘(2) INCOME TAX LIABILITY.—The term ‘in20 come tax liability’ means the amount of the tax im21 posed by chapter 1 on a taxpayer for any taxable

22 year (as shown on such taxpayer’s tax return) re23 duced by the sum of—
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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 of filing the return of the

23 tax imposed by chapter 1 for such taxable year, such des24 ignation shall be made on the page bearing the taxpayer’s

25 signature.
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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 thereof the fol21 lowing:

‘‘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
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1 (relating to information and returns) is amended by

2 adding at the end thereof 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 provided by section 6099(a) for any

7 taxable year shall make a questionnaire return during

8 such year for the purpose of determining whether the tax9 payer is an eligible individual (within the meaning of sec10 tion 6099(b)(1). The questionnaire return shall request

11 the taxpayer to certify such taxpayer’s beliefs about par12 ticipation in war, the source or genesis of such beliefs, and

13 how the beliefs affect the taxpayer’s life.

14 ‘‘(b) QUESTIONNAIRE RETURN RECEIPT.—Upon re15 ceipt of the questionnaire return, the Secretary shall issue

16 a receipt to the taxpayer indicating timely filing of such

17 return.’’.

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

19 amended by adding at the end thereof the following

20 new item:

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

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

22 this section shall apply with respect to—

23 (1) taxable years beginning after December 31,

24 1993, and
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1 (2) any taxable year ending before January 1,

2 1994, 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 JANUARY 1, 1994.—

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

8 Any civil or criminal penalty imposed on an individ9 ual for failing or refusing to pay all or a part of the

10 tax imposed by chapter 1 of the Internal Revenue

11 Code of 1986 shall be vacated and set aside if the

12 person upon whom the penalty was imposed—

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

14 (B) establishes to the satisfaction of the

15 Secretary of the Treasury that the failure or re16 fusal to pay was based upon such person’s con17 scientious objection to participation in war in

18 any form within the meaning of section

19 6099(b)(1)(A) of such Code (defining eligible

20 individual).

21 (2) DISPOSITION OF AMOUNTS COLLECTED.—

22 There are hereby transferred to the Fund amounts

23 equivalent to the sum of the amounts paid into the

24 Treasury by persons under the provisions of para25 graph (1). Such amounts shall be deposited into the
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1 Fund and shall be available only for the purposes

2 provided in this Act.

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

4 TAX FUND.

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

6 Internal Revenue Code of 1986 is amended by adding at

7 the end thereof the following new section:

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

9 TRANSFER TO UNITED STATES PEACE TAX

10 FUND.

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

12 6099(b)(1)) may elect that the tax imposed by section

13 2001 on the taxable estate of such individual shall be

14 transferred when paid to the United States Peace Tax

15 Fund established under section 3 of the United States

16 Peace Tax Fund Act. The election may be made by the

17 executor or administrator of the estate under written au18 thority of the decedent. Such election shall be made in

19 such manner as the Secretary shall by regulations pre20 scribe.’’.

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 thereof

24 the following:

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

United States Peace Tax Fund.’’.
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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, 1993.

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 thereof the following new section:

9 ‘‘SEC. 2506. DESIGNATION OF GIFT 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 2501 shall be transferred when paid to the United States

15 Peace Tax Fund established under 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 contents

20 for subchapter A of chapter 12 of the Internal Revenue

21 Code of 1986 is amended by adding at the end thereof

22 the following:

‘‘Sec. 2506. Designation of gift tax payments for transfer to United States Peace Tax Fund.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply with respect to gifts made after

3 December 31, 1993.

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 each year a certain

15 portion of the Fund for obligation and expenditure in ac16 cordance with the provisions of this Act. Such portion is

17 equal to an amount which is the sum of—

18 (1) the product of—

19 (A) all funds transferred to the Fund in

20 each fiscal year, times

21 (B) the percentage determined under sub22 section (a) for such 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.
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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.—The

4 remaining portion of the Fund after the application of

5 subsection (b) is hereby covered into the general fund of

6 the Treasury of the United States. No part of the funds

7 transferred to the general fund under this subsection shall

8 be appropriated for any expenditures, or otherwise obli9 gated, for a military purpose.

10 SEC. 8. ELIGIBLE APPROPRIATIONS.

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

12 authorization under section 7(b) shall be available, as pro13 vided in the appropriation Acts, to make grants, loans,

14 or other arrangements for eligible activities described in

15 subsection (c).

16 (b) ELIGIBLE ACTIVITIES.—The following activities

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

18 (1) Special Supplemental Food Program for

19 Woman, Infants and Children (WIC).

20 (2) Head Start.

21 (3) United States Institute of Peace.

22 (4) Peace Corps.

23 (c) DISPLACEMENT OF OTHER FUNDS.—It is the in24 tent of this Act that the Fund shall not operate to release

25 funds for military expenditures which, were it not for the
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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 conducted, administered, or spon7 sored by an agency of the Government which affects

8 an augmentation of military forces, defensive and of9 fensive intelligence activities, or enhances the capa10 bility of any person or nation to wage war.

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

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

13 amounts appropriated by the United States in con14 nection with—

15 (A) the Department of Defense;

16 (B) the Central Intelligence Agency;

17 (C) the National Security Council;

18 (D) the Selective Service System;

19 (E) activities of the Department of Energy

20 that have a military purpose;

21 (F) activities of the National Aeronautics

22 and Space Administration that have a military

23 purpose;

24 (G) foreign military aid; and
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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.

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