Child Support Security Act - Amends the Internal Revenue Code relating to discharge of indebtedness income to provide that any taxable unpaid child support payments of a taxpayer for any taxable year shall be treated as amounts includible in the taxpayer's gross income by reason of the discharge of the taxpayer's indebtedness. Sets forth notice guidelines.
Allows an eligible taxpayer with respect to whom child support payments remain unpaid during the taxable year a deduction of up to $5,000 equal to the amount of payments remaining unpaid. Limits such deductions to taxpayers with adjusted gross incomes under $50,000 and unpaid child support payments of $500 or more.
Requires that net revenues received in the Treasury pursuant to this Act be applied solely to the retirement of outstanding Federal debt obligations and not be obligated or expended for any other purpose.
[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4198 Introduced in House (IH)]
105th CONGRESS
2d Session
H. R. 4198
To require a parent who is delinquent in child support to include his
unpaid obligation in gross income, and to allow custodial parents a bad
debt deduction for unpaid child support payments.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 1998
Mr. Weller (for himself and Mr. Fox of Pennsylvania) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To require a parent who is delinquent in child support to include his
unpaid obligation in gross income, and to allow custodial parents a bad
debt deduction for unpaid child support payments.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Child Support Security Act''.
SEC. 2. NO EFFECT ON RIGHTS AND LIABILITIES.
Nothing in this Act shall be construed to affect--
(1) the right of an individual or State to receive any
child support payment; or
(2) the obligation of an individual to pay child support.
SEC. 3. INCLUSION IN INCOME OF AMOUNT OF UNPAID CHILD SUPPORT PAYMENTS.
(a) In General.--Section 108 of the Internal Revenue Code of 1986
(relating to discharge of indebtedness income) is amended by adding at
the end thereof the following new subsection:
``(h) Unpaid Child Support Payments.--
``(1) In general.--For purposes of this chapter, any
taxable unpaid child support payments of a taxpayer for any
taxable year shall be treated as amounts includible in gross
income of the taxpayer for the taxable year by reason of the
discharge of indebtedness of the taxpayer.
``(2) Taxable unpaid child support payments.--For purposes
of this subsection, the term `taxable unpaid child support
payments' means payments--
``(A) which were applicable child support payments
which the taxpayer was required to pay under a support
instrument for the support of a child of the taxpayer,
and
``(B) with respect to which the notice requirements
of paragraph (3) are met.
``(3) Notice requirements.--
``(A) In general.--During January of the second
calendar year following a calendar year in which there
begins a taxable year for which a deduction allowed
under section 166(f) was claimed, the eligible taxpayer
shall send a notice (in such form as the Secretary may
prescribe) to the individual who failed to make
payments which contains--
``(i) the amount of the applicable child
support payments for such taxable year, and
``(ii) notice that the individual is
required to include such amount in gross income
for the taxable year beginning in the preceding
calendar year.
``(B) Notice by secretary.--If notice cannot be
provided under subparagraph (A) because the address is
not known to the eligible taxpayer, the Secretary shall
send such notice if the address is available to the
Secretary.
``(C) Address unknown.--If notice cannot be
provided under subparagraph (A) or (B) because there is
no known address, no income shall be included in gross
income for any taxable year beginning before the
calendar year preceding the calendar year in which such
notice may be sent.
``(4) Subsequent payments.--If any payment required to be
included in gross income under paragraph (1) is subsequently
made, the amount of such payment shall be allowed as a
deduction for the taxable year in which such payment is made.
``(5) Definitions.--For purposes of this subsection, the
terms `applicable child support payments' and `eligible
taxpayer' have the meanings given such terms by section
166(f).''
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1997.
SEC. 4. ALLOWANCE OF BAD DEBT DEDUCTION FOR UNPAID CHILD SUPPORT
PAYMENTS.
(a) In General.--Section 166 of the Internal Revenue Code of 1986
(relating to deduction for bad debts) is amended by redesignating
subsection (f) as subsection (g) and by inserting after subsection (e)
the following new subsection:
``(f) Unpaid Child Support Payments.--
``(1) In general.--In the case of any eligible taxpayer who
has any applicable child support payments remaining unpaid as
of the close of the taxable year--
``(A) subsections (a) and (d) shall not apply to
such payments, and
``(B) there shall be allowed as a deduction for
such taxable year an amount equal to the amount of such
payments.
``(2) Per child limitation on deduction.--The aggregate
amount allowable as a deduction for any taxable year under
paragraph (1) with respect to any child for whom applicable
child support payments are required to be paid shall not exceed
$5,000.
``(3) Eligible taxpayer.--For purposes of this subsection,
the term `eligible taxpayer' means an individual--
``(A) whose adjusted gross income for the taxable
year does not exceed $50,000,
``(B) with respect to whom the amount of applicable
child support payments remaining unpaid as of the close
of the taxable year is equal to or greater than $500,
and
``(C) who meets the identification requirements of
paragraph (5).
``(4) Applicable child support payment.--
``(A) In general.--The term `applicable child
support payment' means, with respect to any taxable
year of the eligible taxpayer--
``(i) any periodic payment of a fixed
amount, or
``(ii) any payment of a medical or
educational expense, insurance premium, or
other similar item,
which is required to be paid to such taxpayer during
such taxable year by an individual under a support
instrument meeting the requirements of paragraph (8)
for the support of any qualifying child of such
individual.
``(B) Qualifying child.--For purposes of this
paragraph, the term `qualifying child' means a child of
an eligible individual with respect to whom a deduction
is allowable under section 151 for the taxable year (or
would be so allowable but for paragraph (2) or (4) of
section 152(e)).
``(C) Payments must be delinquent for at least
entire year.--Any payment described in subparagraph (A)
which is required to be made by an individual to an
eligible taxpayer shall not be treated as an applicable
unpaid child support payment if at least half of the
payments which are required to be paid to the eligible
taxpayer during the 12-month period ending on the last
day of the taxable year are paid. In the case of the
1st taxable year to which this subsection applies to
payments from any individual, the preceding sentence
shall be applied by substituting `24-month' for `12-
month'.
``(D) Coordination with afdc.--The term `applicable
child support payment' shall not include any payment
the right to which has been assigned to a State under
section 402(a)(26) of the Social Security Act (42
U.S.C. 602(a)(26)).
``(5) Identification requirements.--The requirements of
this paragraph are met if the eligible taxpayer includes on the
return claiming the deduction under this subsection the name,
address, and taxpayer identification number of--
``(A) each child with respect to whom child support
payments to which this subsection applies are required
to be paid, and
``(B) the individual who was required to make such
child support payments.
In the case of a failure to provide the information under
subparagraph (B), the preceding sentence shall not apply if the
eligible taxpayer certifies that any such information is not
known.
``(6) Cost-of-living adjustments.--In the case of any
taxable year beginning after 1998, the $50,000 amount under
paragraph (2)(A), the $50,000 amount under paragraph (3)(A),
and the $500 amount under paragraph (3)(B) shall each be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, except that section 1(f)(3)(B)
shall be applied by substituting `1997' for `1992'.
``(7) Subsequent payments.--If any payment with respect to
which a deduction was allowed under paragraph (1) is
subsequently made, such payment shall be included in gross
income of the eligible taxpayer for the taxable year in which
paid. This paragraph shall not apply to any amount if an
individual has assigned the right to receive such amount to a
State (and the State does not pay such amount to such
individual).
``(8) Support instrument.--For purposes of this subsection,
a support instrument meets the requirements of this paragraph
if it is--
``(A) a decree of divorce or separate maintenance
or a written instrument incident to such a decree,
``(B) a written separation agreement, or
``(C) a decree (not described in subparagraph (A))
of a court or administrative agency requiring a parent
to make payments for the support or maintenance of 1 or
more children of such parent.''
(b) Deduction for Nonitemizers.--Section 62(a) of such Code is
amended by inserting after paragraph (16) the following new paragraph:
``(17) Unpaid child support payments.--The deduction
allowed by section 166(f).''
(c) Conforming Amendment.--Section 166(d)(2) of such Code is
amended by striking ``or'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``, or'' and by
adding at the end thereof the following new subparagraph:
``(C) a debt which is an applicable child support
payment under subsection (f).''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1997.
SEC. 5. REDUCTION OF FEDERAL DEBT.
Net revenues received in the Treasury pursuant to this Act shall be
applied, as provided in appropriation Acts, solely to the retirement of
outstanding public debt obligations of the United States and may not be
obligated or expended for any other purpose, notwithstanding any other
provision of law that does not specifically refer to this section.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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