,,ii #aafth ,,congress #ast ,session ,s4 #egd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #bg1 #bjai ,ms4 ,harris 7for herself and ,ms4 ,murkowski7 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 modify the tax treatment of amounts related to employment discrimination and harassment in the workplace1 including sexual harassment1 sexual assault1 and harassment based on protected categories4 #a4 ,short title ,this ,act may be cited as the ,ending the ,monopoly of ,power ,over ,workplace harassment through ,education and ,reporting ,act--,part #b or the ,,empower ,act--,part #b4 #b4 ,tax treatment of amounts related to judgments 7a7 ,denial of deduction 7#a7 ,in general ,part ,,ix of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #bhj;,i4 ,amounts related to judgments with respect to workplace harassment1 including sexual harassment ,no deduction shall be allowed under this chapter for amounts paid or incurred by the taxpayer-- 7#a7 pursuant to any judgment or award in litigation related to workplace harassment1 including sexual harassment1 or 7#b7 for expenses and attorney's fees in connection with the litigation resulting in the judgment or award described in paragraph 7#a7 7other than expenses or attorney's fees paid by the workplace harassment plaintiff or claimant71 or for any insurance covering the defense or liability of the underlying claims with respect to such litigation4 4 7#b7 ,clerical amendment ,the table of sections for part ,,ix of subchapter ,b of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #bhj;,i4 ,amounts related to judgments with respect to workplace harassment1 including sexual harassment4 4 7#c7 ,conforming amendment ,section #afb of such ,code is amended by striking subsection 7q74 7#d7 ,effective date ,the amendments made by this subsection shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this ,act4 7b7 ,exclusion from income 7#a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #aci;,g the following new section3 #aci;,h4 ,amounts received in connection with judgments1 awards1 and settlements with respect to workplace harassment ,gross income shall not include any amount received in connection with a judgment or award in1 or a settlement of-- 7#a7 a claim related to workplace harassment1 including sexual harassment or other unlawful discrimination1 or 7#b7 any other claim of unlawful discrimination 7as defined by section #fb7;e774 ,the preceding sentence shall not include any employment discrimination compensation to which section #acjb applies4 4 7#b7 ,clerical amendment ,the table of sections for part ,,iii of subchapter ,b of chapter #a of such ,code is amended by inserting after the item relating to section #aci;,g the following new item3 ,sec4 #aci;,h4 ,amounts received in connection with judgments1 awards1 or settlements with respect to workplace harassment4 4 7#c7 ,effective date ,the amendments made by this subsection shall apply to amounts received in taxable years beginning after the date of the enactment of this ,act4 #c4 ,limitation on tax based on income averaging for compensation 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 compensation received on account of certain unlawful employment discrimination 7a7 ,general rule ,in the case of any employment discrimination compensation received during any taxable year1 the tax imposed by this chapter for such taxable year with respect to such compensation shall not exceed the sum of-- 7#a7 the tax which would be so imposed if-- 7,a7 no amount of such compensation were included in gross income for such year1 and 7,b7 no deduction were allowed for such year for expenses otherwise allowable as a deduction to the taxpayer for such year 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 combined number of years in the backpay period and the foregone compensation period1 and 7,b7 the amount by which the tax determined under paragraph 7#a7 would increase if the sum of-- 7i7 the average of the average annual net employment discrimination compensation in the backpay period1 and 7ii7 the average of the average annual net employment discrimination compensation in the foregone compensation period1 were included in gross income for such year4 7b7 ,definitions ,for purposes of this section-- 7#a7 ,employment discrimination compensation ,the term employment discrimination compensation means any backpay or foregone compensation receivable 7whether as lump sums or periodic payments7 on account of a judgment or settlement resulting from a claim of unlawful discrimination 7as defined in section #fb7;e77 in violation of law which relates to employment4 7#b7 ,backpay ,the term backpay means amounts which are includible in gross income for the taxable year as compensation which is attributable to services performed 7or which would have been performed but for the violation of law described in paragraph 7#a77 as an employee1 former employee1 or prospective employee in years before such taxable year for the taxpayer's employer1 former employer1 or prospective employer4 7#c7 ,foregone compensation ,the term foregone compensation means amounts which are includible in gross income for the taxable year as compensation which is attributable to services which would have been performed in years after such taxable year but for the violation of law described in paragraph 7#a74 7#d7 ,backpay period ,the term backpay period means the period during which services described in paragraph 7#b7 were performed or would have been performed but for the violation of law described in paragraph 7#a74 ,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 ,foregone compensation period ,the term foregone compensation period means the period during which services described in paragraph 7#c7 would have been performed but for the violation of law described in paragraph 7#a74 ,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 employment discrimination compensation ,the term average annual net employment discrimination compensation with respect to any period means the amount equal to-- 7,a7 the excess of-- 7i7 employment discrimination compensation attributable to such period1 over 7ii7 the amount of the deductions described in subsection 7a77#a77;,b71 divided by 7,b7 the total number of years in the backpay period and the foregone compensation 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 compensation received on account of certain unlawful employment discrimination4 4 7c7 ,income averaging not ,to increase alternative minimum tax liability ,section #ee7;c7 of the ,internal ,revenue ,code of #aihf is amended by redesignating paragraph 7#c7 as paragraph 7#d7 and by inserting after paragraph 7#b7 the following new paragraph3 7#c7 ,coordination with income averaging for amounts received on account of employment discrimination ,solely for purposes of this section1 section #acjb shall not apply in computing the regular tax liability4 4 7d7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this ,act4