I
106TH CONGRESS
1ST SESSION
H. R. 630
To amend the Internal Revenue Code of 1986 to reiterate the denial of
the charitable contribution deduction for transfers associated with split-
dollar insurance arrangements.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 9, 1999
Mr. ARCHER (for himself and Mr. RANGEL) 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 reiterate
the denial of the charitable contribution deduction for
transfers associated with split-dollar insurance arrange-
ments.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CHARITABLE SPLIT-DOLLAR LIFE INSURANCE,
ANNUITY, AND ENDOWMENT CONTRACTS.
(a) IN GENERAL.—Subsection (f) of section 170 of
the Internal Revenue Code of 1986 (relating to disallow-
ance of deduction in certain cases and special rules) is
amended by adding at the end the following new para-
graph:
‘‘(10) SPLIT-DOLLAR LIFE INSURANCE, ANNU-
ITY, AND ENDOWMENT CONTRACTS.—
‘‘(A) IN GENERAL.—Nothing in this sec-
tion or in section 545(b)(2), 556(b)(2), 642(c),
2055, 2106(a)(2), or 2522 shall be construed to
allow a deduction, and no deduction shall be al-
lowed, for any transfer to or for the use of an
organization described in subsection (c) if in
connection with such transfer—
‘‘(i) the organization directly or indi-
rectly pays, or has previously paid, any
premium on any personal benefit contract
with respect to the transferor, or
‘‘(ii) there is an understanding or ex-
pectation that any person will directly or
indirectly pay any premium on any per-
sonal benefit contract with respect to the
transferor.
‘‘(B) PERSONAL
BENEFIT
CONTRACT.—
For purposes of subparagraph (A), the term
‘personal benefit contract’ means, with respect
to the transferor, any life insurance, annuity, or
endowment contract if any direct or indirect
beneficiary under such contract is the trans-
feror, any member of the transferor’s family, or
any other person (other than an organization
described in subsection (c)) designated by the
transferor.
‘‘(C) EXCISE TAX ON PREMIUMS PAID.—
‘‘(i) IN
GENERAL.—There is hereby
imposed on any organization described in
subsection (c) an excise tax equal to the
premiums paid by such organization on
any life insurance, annuity, or endowment
contract if the payment of premiums on
such contract is in connection with a trans-
fer for which a deduction is not allowable
under subparagraph (A).
‘‘(ii) PAYMENTS
BY
OTHER
PER-
SONS.—For purposes of clause (i), pay-
ments made by any other person pursuant
to an understanding or expectation re-
ferred to in subparagraph (A) shall be
treated as made by the organization.
‘‘(iii) REPORTING.—Any organization
on which tax is imposed by clause (i) with
respect to any premium shall file an an-
nual return which includes—
‘‘(I) the amount of such pre-
miums paid during the year and the
name and TIN of each beneficiary
under the contract to which the pre-
mium relates, and
‘‘(II) such other information as
the Secretary may require.
The penalties applicable to returns re-
quired under section 6033 shall apply to
returns required under this clause. Returns
required under this clause shall be fur-
nished at such time and in such manner as
the Secretary shall by forms or regulations
require.
‘‘(D) REGULATIONS.—The Secretary shall
prescribe such regulations as may be necessary
to carry out the purposes of this paragraph.’’
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendment made by
this section shall apply to transfers made after Feb-
ruary 8, 1999.
(2) EXCISE TAX.—Except as provided in para-
graph (3) of this subsection, section 170(f)(10)(C)
of the Internal Revenue Code of 1986 (as added by
this section) shall apply to premiums paid after the
date of the enactment of this Act.
(3) REPORTING.—Clause (iii) of such section
170(f)(10)(C) shall apply to premiums paid after
February 8, 1999 (determined as if the tax imposed
by such section applies to premiums paid after such
date).
Æ