Bars a delinquent debtor from filing an amended return in any subsequent year to reflect the subsequent payment of unpaid child support.
Includes unpaid child support in the gross income of the delinquent debtor.
Precludes taxpayer information regarding child support payments from serving as a basis for selecting an individual's tax return for general audit.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5130 Introduced in House (IH)]
107th CONGRESS
2d Session
H. R. 5130
To allow a custodial parent a bad debt deduction for unpaid child
support payments, and to require a parent who is chronically delinquent
in child support to include the amount of the unpaid obligation in
gross income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 16, 2002
Mr. Cox (for himself, Mr. Foley, Ms. Hart, Ms. Lofgren, Mr. Filner, Mr.
Dreier, Mr. Shadegg, Mr. Schaffer, Mr. Towns, Mr. McKeon, Mr.
Sensenbrenner, Mr. Owens, Mr. Wilson of South Carolina, Mr. Graham, Mr.
Cunningham, Mr. Baldacci, Mr. Ose, Mr. Sanders, Mr. Barr of Georgia,
Ms. Brown of Florida, Mr. Burton of Indiana, Mr. Calvert, Mr. Rothman,
Mr. Horn, Mr. Issa, Mr. Gary G. Miller of California, Mr. Kucinich, Mr.
Pence, Mr. Pitts, Mr. Pascrell, Mr. Pombo, Mr. Rohrabacher, Mr. Royce,
Mr. Tancredo, Mr. Tiberi, Mr. Walden, Mr. Gillmor, Mr. Duncan, Mr.
Traficant, Mr. Fossella, Ms. Millender-McDonald, Mr. Gilchrest, and
Mrs. Morella) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To allow a custodial parent a bad debt deduction for unpaid child
support payments, and to require a parent who is chronically delinquent
in child support to include the amount of the unpaid obligation in
gross income.
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 Enforcement 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. 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.--
``(1) In general.--In the case of a custodial parent who,
as of the close of the taxable year, is owed child support, the
amount of unpaid child support shall be deemed a canceled debt
as of such date, and shall be allowed as a deduction for such
taxable year.
``(2) Presumption of worthlessness.--Subsection (a)
(relating to worthless debts) shall not apply to child support.
``(3) Subsequent payments.--If any unpaid child support
with respect to which a deduction was allowed under paragraph
(1) is subsequently paid to the custodial parent, the amount of
such payment shall not be included in the gross income of the
custodial parent, nor shall it be allowed as a deduction to the
delinquent debtor. The delinquent debtor shall be neither
required nor allowed to file an amended return in any
subsequent year to reflect the subsequent payment of unpaid
child support.
``(4) Full deduction from ordinary income.--Subsection (d)
(relating to the treatment of nonbusiness bad debt as a loss
from the sale or exchange of a capital asset) shall not apply
to the deductibility of unpaid child support.
``(5) Tax returns.--A custodial parent who wishes to deduct
the amount of unpaid child support shall include on the return
claiming the deduction the name and taxpayer identification
number of each child with respect to whom child support
payments to which this subsection applies are required to be
paid.
``(6) Information returns.--
``(A) In general.--A custodial parent who wishes to
deduct the amount of unpaid child support shall
complete Form 1099-CS (or such other form as the
Secretary may prescribe) and provide such form to the
Secretary, and (if the address is known) to the
delinquent debtor, within 45 days following the close
of the taxable year for which the deduction is claimed.
Failure to so file such form with the Secretary (or, if
the address is known, with the delinquent debtor) shall
result in disallowance of the deduction for the taxable
year.
``(B) Contents of form.--The Form 1099-CS (or such
other form as the Secretary may prescribe) shall
contain--
``(i) the total amount of child support
owed (whether or not paid) for such taxable
year,
``(ii) the total amount of unpaid child
support as of the last day of such taxable
year,
``(iii) the name, address (if known), and
taxpayer identification number of the
delinquent debtor, and
``(iv) notice that the delinquent debtor is
required to include such total amount of unpaid
child support in gross income for the
delinquent debtor's taxable year which includes
the last day of the custodial parent's taxable
year.
``(C) Debtor's address unknown.--If the delinquent
debtor's address is not known to the custodial parent,
the Form 1099-CS (or such other form as the Secretary
may prescribe) shall indicate that fact. In such a
case, the Secretary may send such notice if the address
is available to the Secretary, and the notice from the
custodial parent to the delinquent debtor under
subparagraph (A) shall not be required.
``(7) Determination of whether child support is paid.--
``(A) Child support enforcement office records as
conclusive evidence of payment.--Child support shall be
treated as paid if such payment is recorded by the
State office of child support enforcement in which the
custodial parent is registered.
``(B) Timely mailing as timely payment.--A payment
received by the State office of child support
enforcement in which the custodial parent is registered
after the last day of the custodial parent's taxable
year shall be treated for the purpose of this
subsection as paid on such day if the postmark date
falls on or before such day. The rules of section
7502(f) and regulations issued thereunder shall apply
for purposes of this subparagraph.
``(8) Definitions.--For the purposes of this subsection--
``(A) Child support.--The term `child support'
means--
``(i) any periodic payment of a fixed
amount, or
``(ii) any payment of a medical education
expense, insurance premium, or other similar
item,
which is required to be paid to a custodial parent by
an individual under a support instrument for the
support of any qualifying child of such individual.
`Child support' does not include any amount which is
described in section 408(a)(3) of the Social Security
Act and which has been assigned to a State.
``(B) Custodial parent.--The term `custodial
parent' means an individual who is entitled to receive
child support and who has registered with the
appropriate State office of child support enforcement
charged with implementing section 454 of the Social
Security Act.
``(C) Delinquent debtor.--The term `delinquent
debtor' means a taxpayer who owes unpaid child support
to a custodial parent.
``(D) Qualifying child.--The term `qualifying
child' means a child of a custodial parent with respect
to whom a dependent 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)).
``(E) Support instrument.--The term `support
instrument' means--
``(i) a decree of divorce or separate
maintenance or a written instrument incident to
such a decree,
``(ii) a written separation agreement, or
``(iii) a decree (not described in clause
(i)) 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.
``(F) Unpaid child support.--The term `unpaid child
support' means child support that is payable for months
during a custodial parent's taxable year and unpaid as
of the last day of such taxable year, provided that
such unpaid amount as of such day equals or exceeds
one-half of the total amount of child support due to
the custodial parent for such year.''.
(b) Deduction for Nonitemizers.--Section 62(a) of such Code is
amended by inserting after paragraph (18) the following new paragraph:
``(19) 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 the subparagraph (B) and by inserting ``, or''
and by adding at the end the following new subparagraph:
``(C) a debt which constitutes unpaid child support
payment under subsection (f).''
SEC. 4. INCLUSION IN INCOME OF AMOUNT OF UNPAID CHILD SUPPORT.
(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 the following new subsection:
``(h) Unpaid Child Support.--
``(1) In general.--For purposes of this chapter, any unpaid
child support of a delinquent debtor for any taxable year shall
be treated as amounts includible in gross income of the
delinquent debtor for the taxable year.
``(2) Determination of whether child support is unpaid.--
``(A) In general.--Child support shall be treated
as paid if such payment is recorded by the State office
of child support enforcement in which the custodial
parent is registered.
``(B) Timely mailing as timely payment.--A payment
received by the State office of child support
enforcement in which the custodial parent is registered
after the last day of the custodial parent's taxable
year shall be treated for the purpose of this
subsection as paid on such day if the postmark date
falls on or before such day. The rules of section
7502(f) and regulations issued thereunder shall apply
for purposes of this subparagraph.
``(3) Definitions.--For the purposes of this subsection--
``(A) Child support.--The term `child support'
means--
``(i) any periodic payment of a fixed
amount, or
``(ii) any payment of a medical education
expense, insurance premium, or other similar
item,
which is required to be paid to a custodial parent by
an individual under a support instrument for the
support of any qualifying child of such individual.
`Child support' does not include any amount which is
described in section 408(a)(3) of the Social Security
Act and which has been assigned to a State.
``(B) Custodial parent.--The term `custodial
parent' means an individual who is entitled to receive
child support and who has registered with the
appropriate State office of child support enforcement
charged with implementing section 454 of the Social
Security Act.
``(C) Delinquent debtor.--The term `delinquent
debtor' means a taxpayer who owes unpaid child support
to a custodial parent.
``(D) Qualifying child.--The term `qualifying
child' means a child of a custodial parent with respect
to whom a dependent 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)).
``(E) Support instrument.--The term `support
instrument' means--
``(i) a decree of divorce or separate
maintenance or a written instrument incident to
such a decree,
``(ii) a written separation agreement, or
``(iii) a decree (not described in clause
(i)) 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.
``(F) Unpaid child support.--The term `unpaid child
support' means child support that is payable for months
during a custodial parent's taxable year and unpaid as
of the last day of such taxable year, provided that
such unpaid amount as of such day equals or exceeds
one-half of the total amount of child support due to
the custodial parent for such year.
``(4) Coordination with other laws.--Amounts treated as
income by paragraph (1) shall not be treated as income by
reason of paragraph (1) for the purposes of any provision of
law which is not an internal revenue law.''.
SEC. 5. TAXPAYER INFORMATION REGARDING CHILD SUPPORT NOT BASIS FOR
AUDIT.
A discrepancy between the tax returns of a custodial parent and a
delinquent debtor concerning whether a payment of child support has
been made may not be used or relied upon by the Internal Revenue
Service in any way in selecting an individual's tax return for a
general audit.
SEC. 6. EFFECTIVE DATE; IMPLEMENTATION.
The amendments made by the Act shall apply to taxable years
beginning after December 31, 2001. The Secretary of the Treasury shall
publish Form 1099-CS (or such other form that may be prescribed to
comply with section 3(a)(6) of this Act) regulations, if any, that may
be deemed necessary to carry out the purposes of this Act, not later
than 90 days after the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line