,,ii  #aafth ,,congress  #ast ,session  
,s4 #aahe  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,april #aa1    
#bjai,mr4 ,leahy 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 disallow any 
deduction for punitive damages1 and for 
other purposes4  #a4 ,short title ,this 
,act may be cited as the ,no ,tax       
,write-offs for ,corporate ,wrongdoers  
,act4  #b4 ,disallowance of deduction   
for punitive damages  7a7 ,disallowance 
of deduction  7#a7 ,in general ,section 
#afb7;g7 of the ,internal ,revenue ,code
 of #aihf is amended--  7,a7 by         
redesignating paragraphs 7#a7 and 7#b7  
as subparagraphs 7,a7 and 7,b71         
respectively2  7,b7 by striking ,if and 
inserting3  7#a7 ,treble damages ,if  2 
and  7,c7 by adding at the end the      
following new paragraph3  7#b7 ,punitive
 damages ,no deduction shall be allowed 
under this chapter for any amount paid  

or incurred for punitive damages in     
connection with any judgment in1 or     
settlement of1 any action4  4  7#b7     
,conforming amendment ,the heading for  
section #afb7;g7 of such ,code is       
amended by inserting or ,punitive       
,damages after ,laws4  7b7 ,inclusion in
 income of punitive damages paid by     
insurer or otherwise  7#a7 ,in general  
,part ,,ii of subchapter ,b of chapter  
#a of the ,internal ,revenue ,code of   
#aihf is amended by adding at the end   
the following new section3  #ib4        
,punitive damages compensated by        
insurance or otherwise ,gross income    
shall include any amount paid to or on  
behalf of a taxpayer as insurance or    
otherwise by reason of the taxpayer's   
liability 7or agreement7 to pay punitive
 damages4  4  7#b7 ,reporting           
requirements ,section #fjda of such     
,code is amended by adding at the end   
the following new subsection3  7h7      
,section ,to apply to punitive damages  
compensation ,this section shall apply  

to payments by a person to or on behalf 
of another person as insurance or       
otherwise by reason of the other        
person's liability 7or agreement7 to pay
 punitive damages4  4  7#c7 ,conforming 
amendment ,the table of sections for    
part ,,ii of subchapter ,b of chapter #a
 of such ,code is amended by adding at  
the end the following new item3  ,sec4  
#ib4 ,punitive damages compensated by   
insurance or otherwise4  4  7c7         
,effective ,date ,the amendments made by
 this section shall apply to damages    
paid or incurred on or after the date of
 the enactment of this ,act4