DEPOSIT Act

To amend the Internal Revenue Code of 1986 to impose a higher rate of tax on bonuses and profits from sales of stock received by executives employed by failing banks that were closed and for which the Federal Deposit Insurance Corporation has been appointed as conservator or receiver. 1. Short title This Act may be cited as the Deliver Executive Profits On Seized Institutions to Taxpayers Act DEPOSIT Act 2. Sense of the Senate It is the sense of the Senate that the revenue raised from the tax imposed under subsection (k) of section 1 12 U.S.C. 1813 3. Higher rate of tax on bonuses and stock profits received by certain bank executives (a) In general Section 1 (k) Rate of tax on profits received by certain bank executives (1) In general In the case of any applicable individual who receives any excluded profits during the taxable year, the tax imposed by this section shall be equal to— (A) the tax which would be imposed by this section if the taxable income of such individual for the taxable year were reduced (but not below zero) by the amount of the excluded profits received by such individual during such taxable year, plus (B) 90 percent of the excluded profits described in subclause (I) of paragraph (2)(B)(i) which were received by such individual during such taxable year, plus (C) 100 percent of the excluded profits described in subclause (II) of such paragraph which were received by such individual during such taxable year. (2) Definitions For purposes of this subsection— (A) Applicable individual The term applicable individual (i) who— (I) was employed by an insured depository institution for which the Federal Deposit Insurance Corporation has been appointed conservator or receiver, and (II) served as an executive officer for such institution prior to such conservatorship or receivership, and (ii) with respect to the taxable year in which the excluded profits were received, whose adjusted gross income (reduced by the amount of such excluded profits) for such taxable year was greater than $250,000. (B) Excluded profits (i) In general The term excluded profits (I) any payment in the nature of a bonus which is paid— (aa) after March 1, 2023, and (bb) by any insured depository institution within the 60-day period prior to the date on which the Federal Deposit Insurance Corporation was appointed conservator or receiver for such institution, or (II) any profit made by such applicable individual from the sale of any security of the insured depository institution that employs such applicable individual, if that sale occurs not more than 60 days before the date on which the Federal Deposit Insurance Corporation is appointed conservator or receiver with respect to the insured depository institution. (ii) Controlled groups (I) In general For purposes of clause (i), all persons treated as a single employer under subsection (a) or (b) of section 52 or under subsection (m) or (o) of section 414 shall be treated as one person. (II) Inclusion of foreign corporations For purposes of subclause (I), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof. (C) Executive officer The term executive officer (D) Insured depository institution The term insured depository institution 12 U.S.C. 1813 . (b) Effective date The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.

Summary: Deliver Executive Profits On Seized Institutions to Taxpayers Act or the DEPOSIT Act This bill imposes an increased tax rate on bonuses paid after March 1, 2023, and profits from sales of bank stock received by highly-paid bank executives employed by failing banks that were closed and for which the Federal Deposit Insurance Corporation has been appointed conservator or receiver. The bill expresses the sense of the Senate that revenues from such increased taxes be returned to the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.