Sec. 3. Tax on receipt of pay-for-delay payments; denial of deduction for pay-for-delay payments
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The Internal Revenue Code of 1986 is amended by inserting after chapter 36 the following new chapter: Sec. 4501. Imposition of tax. There is hereby imposed, on each taxpayer who is party to an agreement that is determined by the Federal Trade Commission under section 27 of the Federal Trade Commission Act to be a violation of section 5 of such Act, a tax equal to 50 percent of the amount paid to such taxpayer under such agreement. . Section 162(c) is amended by adding at the end the following new paragraph: No deduction shall be allowed under subsection
(a)for any payment under an agreement that is determined by the Federal Trade Commission under section 27 of the Federal Trade Commission Act to be a violation of section 5 of such Act. . The table of chapters for the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 36 the following new item: Chapter 37—Pay-for-Delay .