An Act to amend the Internal Revenue Code of 1954 with respect to the tax treatment of income received from patent infringement suits
PL 84-366 (H.R.7300), enacted 08/11/1955

688 
PUBLIC LAW 366-AUG. 11, 1955 
[69 STAT 
"That whenever (1) any disbursing officer of the Army, Navy, Air 
Force, or Marine Corps incurs or has incurred a physical loss or defi-
ciency of any Government funds, vouchers, records, or papers in his 
charge and (2) the Secretary of the department concerned determines 
that such loss or deficiency occurred while the officer was in line of his 
duty and that such loss or deficiency occurred without fault or 
negligence on his part, the General Accounting Office shall relieve 
such officer of the liability for such loss or deficiency, or authorize 
the reimbursement, from any appropriation or fund made available 
for that purpose, of amounts paid by or on behalf of such officer in 
restitution of such loss or deficiency. 
Any determination made by the 
Secretary of the department concerned under this Act shall be con-
clusive upon the General Accounting Office. 
No relief may be granted 
under this Act with respect to any deficiency in the accounts of any 
disbursing officer which results from any illegal or erroneous payment. 
This Act shall not deprive any disbursing officer of any right which 
he otherwise may have to obtain relief by any other means with respect 
to any loss or deficiency covered by this Act." 
(b) No reimbursement shall be made under the amendment made 
by subsection (a) for any loss or deficiency occurring before the date 
of enactment of this Act. 
Repeal. 
§^0. 3. The secoud paragraph under the heading "Pay, miscel-
laneous", of the first section of the Act of Julv 11, 1919 (41 Stat. 132, 
as amended; 31 U. S. C. 105) is hereby repealed. 
Approved August 11, 1955. 
Public Law 366 
CHAPTER 804 
August 11, 1955 
-^N A C T 
[H.R. 7300] 
IJQ amend the Internal Revenue Code of 1954 with respect to the tax treatment 
of income received from patent infringement suits. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That (a) part I of 
subchapter Q of chapter 1 of the Internal Revenue Code of 1954 is 
ae^st^^iao'/ 
hereby amended by renumbering section 1304 as section 1305, and by 
inserting after section 1303 the following new section: 
"SEC. 1304. COMPENSATORY DAMAGES FOR PATENT INFRINGEMENT. 
"If an amount representing compensatory damages is received or 
accrued by a taxpayer during a taxable year as the result of an award 
in a civil action for infringement of a patent issued by the United 
States, then the tax attributable to the inclusion of such amount in 
gross income for the taxable year shall not be greater than the aggre-
gate of the increases in taxes which would have resulted if such 
amount had been included in gross income in equal installments for 
each month during which such infringement occurred." 
(b) The table of sections for such part I is hereby amended by 
striking out 
•'Sec. 1304. Rules applicable to this part." 
and inserting in lieu thereof the following: 
"Sec. 1304. Compensatory damages for patent infringement. 
"Sec. 1305. Rules applicable to this part." 
SEC. 2. The amendments made by the first section of this Act shall 
apply with respect to taxable years ending after the date of the enact-
ment of this Act, but only with respect to amounts received or accrued 
after such date as the result of awards made after such date. 
Approved August 11, 1955.