I 

117TH CONGRESS 

1ST SESSION H. R. 697 

To amend the Internal Revenue Code of 1986 to expand the denial of 

deduction for certain excessive employee remuneration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 2, 2021 

Mr. DOGGETT (for himself, Mr. BLUMENAUER, Mr. CICILLINE, Mr. COHEN, 

Mr. DEFAZIO, Ms. DELAURO, Mr. DESAULNIER, Mr. ESPAILLAT, Mr. 

GARAMENDI, Mr. GRIJALVA, Ms. MOORE of Wisconsin, Mr. PRICE of 

North Carolina, Ms. SCHAKOWSKY, and Mrs. WATSON COLEMAN) 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 expand 

the denial of deduction for certain excessive employee 

remuneration, 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 ‘‘Stop Subsidizing Mul5 timillion Dollar Corporate Bonuses Act’’. 


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1 SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CER2 TAIN EXCESSIVE EMPLOYEE REMUNERA3 TION. 

4 (a) IN GENERAL.— 

5 (1) EXPANSION.—Section 162(m) of the Inter6 nal Revenue Code of 1986 is amended— 

7 (A) by striking ‘‘applicable employee remu8 neration’’ each place it appears in paragraphs 

9 (1), (4), and (5)(E) and inserting ‘‘applicable 

10 remuneration’’, 

11 (B) by striking ‘‘covered employee’’ each 

12 place it appears in paragraphs (1) and (4) and 

13 inserting ‘‘covered individual’’, and 

14 (C) by striking ‘‘employee’’ each place it 

15 appears in paragraph (1) and subparagraphs 

16 (A), (C)(ii), and (E) of paragraph (4) and in17 serting ‘‘individual’’. 

18 (2) COVERED INDIVIDUAL.—Paragraph (3) of 

19 section 162(m) of such Code is amended to read as 

20 follows: 

21 ‘‘(3) COVERED INDIVIDUAL.—For purposes of 

22 this subsection, the term ‘covered individual’ 

23 means— 

24 ‘‘(A) any individual who performs services 

25 (directly or indirectly) for the taxpayer (or any 


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1 predecessor) for any taxable year beginning 

2 after December 31, 2020, or 

3 ‘‘(B) any employee— 

4 ‘‘(i) who was the principal executive 

5 officer or principal financial officer of the 

6 taxpayer (or any predecessor) at any time 

7 during any preceding taxable year begin8 ning after December 31, 2016, and before 

9 January 1, 2021, or who was an individual 

10 acting in such a capacity, or 

11 ‘‘(ii) the total compensation of whom 

12 for any taxable year described in clause (i) 

13 was required to be reported to shareholders 

14 under the Securities Exchange Act of 1934 

15 by reason of such individual being among 

16 the 3 highest compensated officers for the 

17 taxable year (other than any individual de18 scribed in clause (i)). 

19 Such term shall include any employee who would be 

20 described in subparagraph (B)(ii) if the reporting 

21 described in such subparagraph were required as so 

22 described.’’. 

23 (3) CONFORMING AMENDMENTS.— 


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1 (A) The heading for section 162(m) of the 

2 Internal Revenue Code of 1986 is amended by 

3 striking ‘‘EMPLOYEE’’. 

4 (B) The heading for section 162(m)(4) is 

5 amended by striking ‘‘EMPLOYEE’’. 

6 (b) MODIFICATION OF DEFINITION OF PUBLICLY

7 HELD CORPORATION.—Section 162(m)(2) of the Internal 

8 Revenue Code of 1986 is amended— 

9 (1) by inserting ‘‘, with respect to any taxable 

10 year,’’ after ‘‘means’’, and 

11 (2) by striking subparagraph (B) and inserting 

12 the following: 

13 ‘‘(B) that was required to file reports 

14 under section 15(d) of such Act (15 U.S.C. 

15 78o(d)) at any time during the 3-taxable year 

16 period ending with such taxable year.’’. 

17 (c) REGULATORY AUTHORITY.— 

18 (1) IN GENERAL.—Section 162(m) of the Inter19 nal Revenue Code of 1986 is amended by adding at 

20 the end the following new paragraph: 

21 ‘‘(7) REGULATIONS.—The Secretary may pre22 scribe such guidance, rules, or regulations as are 

23 necessary to carry out the purposes of this sub24 section, including regulations— 

25 ‘‘(A) with respect to reporting, and 


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1 ‘‘(B) to prevent avoidance of the purposes 

2 of this section by providing compensation 

3 through a pass-through or other entity.’’. 

4 (2) CONFORMING AMENDMENT.—Paragraph (6) 

5 of section 162(m) of such Code is amended by strik6 ing subparagraph (H). 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2020. 

Æ 


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