,,ii #aacth ,,congress #ast ,session ,s4 #abbd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bf1 #bjac ,mr4 ,cardin 7for himself and ,ms4 ,collins7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to exclude from gross income amounts received on account of claims based on certain unlawful discrimination and to allow income averaging for backpay and frontpay awards received on account of such claims1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,civil ,justice ,tax ,fairness ,act of #bjac4 #b4 ,exclusion from gross income for amounts received on account of certain unlawful discrimination 7a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to items specifically excluded from gross income7 is amended by inserting before section #adj the following new section3 #aci;,e4 ,amounts received on account of certain unlawful discrimination 7a7 ,in general 7#a7 ,exclusion ,gross income does not include amounts received by a claimant 7whether by judgment or settlement and whether as lump sums or periodic payments7 on account of a claim of unlawful discrimination4 7#b7 ,amounts covered ,for purposes of paragraph 7#a71 the term amounts does not include-- 7,a7 backpay or frontpay1 as defined in section #acjb7;b71 or 7,b7 punitive damages4 7b7 ,unlawful discrimination defined ,for purposes of this section1 the term unlawful discrimination has the meaning given such term by section #fb7;e74 4 7b7 ,clerical amendment ,the table of sections for part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting before the item relating to section #adj the following new item3 ,sec4 #aci;,e4 ,amounts received on account of certain unlawful discrimination4 4 7c7 ,effective date ,the amendments made by this section shall apply to amounts received in taxable years beginning after ,december #ca1 #bjab4 #c4 ,limitation on tax based on income averaging for backpay and frontpay received on account of certain unlawful employment discrimination 7a7 ,in general ,part ,i of subchapter ,q of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to income averaging7 is amended by adding at the end the following new section3 #acjb4 ,income from backpay and frontpay received on account of certain unlawful employment discrimination 7a7 ,general rule ,if employment discrimination backpay or frontpay is received by a taxpayer during a taxable year1 the tax imposed by this chapter for such taxable year shall not exceed the sum of-- 7#a7 the tax which would be so imposed if-- 7,a7 no amount of such backpay or frontpay were included in gross income for such year1 and 7,b7 no deduction were allowed for such year for expenses 7otherwise allowable as a deduction to the taxpayer for such year7 in connection with making or prosecuting any claim of unlawful employment discrimination by or on behalf of the taxpayer1 plus 7#b7 the product of-- 7,a7 the number of years in the backpay period and frontpay period1 and 7,b7 the amount by which the tax determined under paragraph 7#a7 would increase if the amount on which such tax is determined were increased by the average annual net backpay and frontpay amount4 7b7 ,definitions ,for purposes of this section-- 7#a7 ,employment discrimination backpay or frontpay ,the term employment discrimination backpay or frontpay means backpay or frontpay receivable 7whether as lump sums or periodic payments7 on account of a claim of unlawful employment discrimination4 7#b7 ,unlawful employment discrimination ,the term unlawful employment discrimination has the meaning provided the term unlawful discrimination in section #fb7;e74 7#c7 ,backpay and frontpay ,the terms backpay and frontpay mean amounts-- 7,a7 which are includible in gross income in the taxable year as compensation which is attributable-- 7i7 in the case of backpay1 to services performed1 or that would have been performed but for a claimed violation of law1 as an employee1 former employee1 or prospective employee before such taxable year for the taxpayer's employer1 former employer1 or prospective employer1 and 7ii7 in the case of frontpay1 to employment that would have been performed but for a claimed violation of law1 in a taxable year or taxable years following the taxable year1 and 7,b7 which are received on account of a judgment or settlement resulting from a claim for a violation of law4 7#d7 ,backpay period ,the term backpay period means the period during which services are performed 7or would have been performed7 to which backpay is attributable4 ,if such period is not equal to a whole number of taxable years1 such period shall be increased to the next highest number of whole taxable years4 7#e7 ,frontpay period ,the term frontpay period means the period of foregone employment to which frontpay is attributable4 ,if such period is not equal to a whole number of taxable years1 such period shall be increased to the next highest number of whole taxable years4 7#f7 ,average annual net backpay and frontpay amount ,the term average annual net backpay and frontpay amount means the amount equal to-- 7,a7 the excess of-- 7i7 employment discrimination backpay and frontpay1 over 7ii7 the amount of deductions that would have been allowable but for subsection 7a77#a77;,b71 divided by 7,b7 the number of years in the backpay period and frontpay period4 4 7b7 ,clerical amendment ,the table of sections for part ,i of subchapter ,q of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #acja the following new item3 ,sec4 #acjb4 ,income from backpay and frontpay received on account of certain unlawful employment discrimination4 4 7c7 ,effective date ,the amendments made by this section shall apply to amounts received in taxable years beginning after ,december #ca1 #bjab4 #d4 ,income averaging for backpay and frontpay received on account of certain unlawful employment discrimination not to increase alternative minimum tax liability 7a7 ,in general ,section #ee7;c7 of the ,internal ,revenue ,code of #aihf 7defining regular tax7 is amended by redesignating paragraph 7#c7 as paragraph 7#d7 and by inserting after paragraph 7#b7 the following3 7#c7 ,coordination with income averaging for amounts received on account of employment discrimination ,solely for purposes of this section1 section #acjb 7relating to averaging of income from backpay or frontpay received on account of certain unlawful employment discrimination7 shall not apply in computing the regular tax4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4