
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC162]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
      PART VI--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
 
Sec. 162. Trade or business expenses


(a) In general

    There shall be allowed as a deduction all the ordinary and necessary 
expenses paid or incurred during the taxable year in carrying on any 
trade or business, including--
        (1) a reasonable allowance for salaries or other compensation 
    for personal services actually rendered;
        (2) traveling expenses (including amounts expended for meals and 
    lodging other than amounts which are lavish or extravagant under the 
    circumstances) while away from home in the pursuit of a trade or 
    business; and
        (3) rentals or other payments required to be made as a condition 
    to the continued use or possession, for purposes of the trade or 
    business, of property to which the taxpayer has not taken or is not 
    taking title or in which he has no equity.

For purposes of the preceding sentence, the place of residence of a 
Member of Congress (including any Delegate and Resident Commissioner) 
within the State, congressional district, or possession which he 
represents in Congress shall be considered his home, but amounts 
expended by such Members within each taxable year for living expenses 
shall not be deductible for income tax purposes in excess of $3,000. For 
purposes of paragraph (2), the taxpayer shall not be treated as being 
temporarily away from home during any period of employment if such 
period exceeds 1 year. The preceding sentence shall not apply to any 
Federal employee during any period for which such employee is certified 
by the Attorney General (or the designee thereof) as traveling on behalf 
of the United States in temporary duty status to investigate or 
prosecute, or provide support services for the investigation or 
prosecution of, a Federal crime.

(b) Charitable contributions and gifts excepted

    No deduction shall be allowed under subsection (a) for any 
contribution or gift which would be allowable as a deduction under 
section 170 were it not for the percentage limitations, the dollar 
limitations, or the requirements as to the time of payment, set forth in 
such section.

(c) Illegal bribes, kickbacks, and other payments

      (1) Illegal payments to government officials or employees

        No deduction shall be allowed under subsection (a) for any 
    payment made, directly or indirectly, to an official or employee of 
    any government, or of any agency or instrumentality of any 
    government, if the payment constitutes an illegal bribe or kickback 
    or, if the payment is to an official or employee of a foreign 
    government, the payment is unlawful under the Foreign Corrupt 
    Practices Act of 1977. The burden of proof in respect of the issue, 
    for the purposes of this paragraph, as to whether a payment 
    constitutes an illegal bribe or kickback (or is unlawful under the 
    Foreign Corrupt Practices Act of 1977) shall be upon the Secretary 
    to the same extent as he bears the burden of proof under section 
    7454 (concerning the burden of proof when the issue relates to 
    fraud).

                     (2) Other illegal payments

        No deduction shall be allowed under subsection (a) for any 
    payment (other than a payment described in paragraph (1)) made, 
    directly or indirectly, to any person, if the payment constitutes an 
    illegal bribe, illegal kickback, or other illegal payment under any 
    law of the United States, or under any law of a State (but only if 
    such State law is generally enforced), which subjects the payor to a 
    criminal penalty or the loss of license or privilege to engage in a 
    trade or business. For purposes of this paragraph, a kickback 
    includes a payment in consideration of the referral of a client, 
    patient, or customer. The burden of proof in respect of the issue, 
    for purposes of this paragraph, as to whether a payment constitutes 
    an illegal bribe, illegal kickback, or other illegal payment shall 
    be upon the Secretary to the same extent as he bears the burden of 
    proof under section 7454 (concerning the burden of proof when the 
    issue relates to fraud).

       (3) Kickbacks, rebates, and bribes under medicare and 
                                  medicaid

        No deduction shall be allowed under subsection (a) for any 
    kickback, rebate, or bribe made by any provider of services, 
    supplier, physician, or other person who furnishes items or services 
    for which payment is or may be made under the Social Security Act, 
    or in whole or in part out of Federal funds under a State plan 
    approved under such Act, if such kickback, rebate, or bribe is made 
    in connection with the furnishing of such items or services or the 
    making or receipt of such payments. For purposes of this paragraph, 
    a kickback includes a payment in consideration of the referral of a 
    client, patient, or customer.

(d) Capital contributions to Federal National Mortgage Association

    For purposes of this subtitle, whenever the amount of capital 
contributions evidenced by a share of stock issued pursuant to section 
303(c) of the Federal National Mortgage Association Charter Act (12 
U.S.C., sec. 1718) exceeds the fair market value of the stock as of the 
issue date of such stock, the initial holder of the stock shall treat 
the excess as ordinary and necessary expenses paid or incurred during 
the taxable year in carrying on a trade or business.

(e) Denial of deduction for certain lobbying and political expenditures

                           (1) In general

        No deduction shall be allowed under subsection (a) for any 
    amount paid or incurred in connection with--
            (A) influencing legislation,
            (B) participation in, or intervention in, any political 
        campaign on behalf of (or in opposition to) any candidate for 
        public office,
            (C) any attempt to influence the general public, or segments 
        thereof, with respect to elections, legislative matters, or 
        referendums, or
            (D) any direct communication with a covered executive branch 
        official in an attempt to influence the official actions or 
        positions of such official.

                 (2) Exception for local legislation

        In the case of any legislation of any local council or similar 
    governing body--
            (A) paragraph (1)(A) shall not apply, and
            (B) the deduction allowed by subsection (a) shall include 
        all ordinary and necessary expenses (including, but not limited 
        to, traveling expenses described in subsection (a)(2) and the 
        cost of preparing testimony) paid or incurred during the taxable 
        year in carrying on any trade or business--
                (i) in direct connection with appearances before, 
            submission of statements to, or sending communications to 
            the committees, or individual members, of such council or 
            body with respect to legislation or proposed legislation of 
            direct interest to the taxpayer, or
                (ii) in direct connection with communication of 
            information between the taxpayer and an organization of 
            which the taxpayer is a member with respect to any such 
            legislation or proposed legislation which is of direct 
            interest to the taxpayer and to such organization,

        and that portion of the dues so paid or incurred with respect to 
        any organization of which the taxpayer is a member which is 
        attributable to the expenses of the activities described in 
        clauses (i) and (ii) carried on by such organization.

         (3) Application to dues of tax-exempt organizations

        No deduction shall be allowed under subsection (a) for the 
    portion of dues or other similar amounts paid by the taxpayer to an 
    organization which is exempt from tax under this subtitle which the 
    organization notifies the taxpayer under section 6033(e)(1)(A)(ii) 
    is allocable to expenditures to which paragraph (1) applies.

                     (4) Influencing legislation

        For purposes of this subsection--

        (A) In general

            The term ``influencing legislation'' means any attempt to 
        influence any legislation through communication with any member 
        or employee of a legislative body, or with any government 
        official or employee who may participate in the formulation of 
        legislation.

        (B) Legislation

            The term ``legislation'' has the meaning given such term by 
        section 4911(e)(2).

                       (5) Other special rules

        (A) Exception for certain taxpayers

            In the case of any taxpayer engaged in the trade or business 
        of conducting activities described in paragraph (1), paragraph 
        (1) shall not apply to expenditures of the taxpayer in 
        conducting such activities directly on behalf of another person 
        (but shall apply to payments by such other person to the 
        taxpayer for conducting such activities).

        (B) De minimis exception

            (i) In general

                Paragraph (1) shall not apply to any in-house 
            expenditures for any taxable year if such expenditures do 
            not exceed $2,000. In determining whether a taxpayer exceeds 
            the $2,000 limit under this clause, there shall not be taken 
            into account overhead costs otherwise allocable to 
            activities described in paragraphs (1)(A) and (D).
            (ii) In-house expenditures

                For purposes of clause (i), the term ``in-house 
            expenditures'' means expenditures described in paragraphs 
            (1)(A) and (D) other than--
                    (I) payments by the taxpayer to a person engaged in 
                the trade or business of conducting activities described 
                in paragraph (1) for the conduct of such activities on 
                behalf of the taxpayer, or
                    (II) dues or other similar amounts paid or incurred 
                by the taxpayer which are allocable to activities 
                described in paragraph (1).

        (C) Expenses incurred in connection with lobbying and political 
                activities

            Any amount paid or incurred for research for, or 
        preparation, planning, or coordination of, any activity 
        described in paragraph (1) shall be treated as paid or incurred 
        in connection with such activity.

                (6) Covered executive branch official

        For purposes of this subsection, the term ``covered executive 
    branch official'' means--
            (A) the President,
            (B) the Vice President,
            (C) any officer or employee of the White House Office of the 
        Executive Office of the President, and the 2 most senior level 
        officers of each of the other agencies in such Executive Office, 
        and
            (D)(i) any individual serving in a position in level I of 
        the Executive Schedule under section 5312 of title 5, United 
        States Code, (ii) any other individual designated by the 
        President as having Cabinet level status, and (iii) any 
        immediate deputy of an individual described in clause (i) or 
        (ii).

           (7) Special rule for Indian tribal governments

        For purposes of this subsection, an Indian tribal government 
    shall be treated in the same manner as a local council or similar 
    governing body.

                         (8) Cross reference

            For reporting requirements and alternative taxes related to 
        this subsection, see section 6033(e).

(f) Fines and penalties

    No deduction shall be allowed under subsection (a) for any fine or 
similar penalty paid to a government for the violation of any law.

(g) Treble damage payments under the antitrust laws

    If in a criminal proceeding a taxpayer is convicted of a violation 
of the antitrust laws, or his plea of guilty or nolo contendere to an 
indictment or information charging such a violation is entered or 
accepted in such a proceeding, no deduction shall be allowed under 
subsection (a) for two-thirds of any amount paid or incurred--
        (1) on any judgment for damages entered against the taxpayer 
    under section 4 of the Act entitled ``An Act to supplement existing 
    laws against unlawful restraints and monopolies, and for other 
    purposes'', approved October 15, 1914 (commonly known as the Clayton 
    Act), on account of such violation or any related violation of the 
    antitrust laws which occurred prior to the date of the final 
    judgment of such conviction, or
        (2) in settlement of any action brought under such section 4 on 
    account of such violation or related violation.

The preceding sentence shall not apply with respect to any conviction or 
plea before January 1, 1970, or to any conviction or plea on or after 
such date in a new trial following an appeal of a conviction before such 
date.

(h) State legislators' travel expenses away from home

                           (1) In general

        For purposes of subsection (a), in the case of any individual 
    who is a State legislator at any time during the taxable year and 
    who makes an election under this subsection for the taxable year--
            (A) the place of residence of such individual within the 
        legislative district which he represented shall be considered 
        his home,
            (B) he shall be deemed to have expended for living expenses 
        (in connection with his trade or business as a legislator) an 
        amount equal to the sum of the amounts determined by multiplying 
        each legislative day of such individual during the taxable year 
        by the greater of--
                (i) the amount generally allowable with respect to such 
            day to employees of the State of which he is a legislator 
            for per diem while away from home, to the extent such amount 
            does not exceed 110 percent of the amount described in 
            clause (ii) with respect to such day, or
                (ii) the amount generally allowable with respect to such 
            day to employees of the executive branch of the Federal 
            Government for per diem while away from home but serving in 
            the United States, and

            (C) he shall be deemed to be away from home in the pursuit 
        of a trade or business on each legislative day.

                        (2) Legislative days

        For purposes of paragraph (1), a legislative day during any 
    taxable year for any individual shall be any day during such year on 
    which--
            (A) the legislature was in session (including any day in 
        which the legislature was not in session for a period of 4 
        consecutive days or less), or
            (B) the legislature was not in session but the physical 
        presence of the individual was formally recorded at a meeting of 
        a committee of such legislature.

                            (3) Election

        An election under this subsection for any taxable year shall be 
    made at such time and in such manner as the Secretary shall by 
    regulations prescribe.

      (4) Section not to apply to legislators who reside near 
                                   capitol

        For taxable years beginning after December 31, 1980, this 
    subsection shall not apply to any legislator whose place of 
    residence within the legislative district which he represents is 50 
    or fewer miles from the capitol building of the State.

[(i) Repealed. Pub. L. 101-239, title VI, Sec. 6202(b)(3)(A), Dec. 19, 
        1989, 103 Stat. 2233]

(j) Certain foreign advertising expenses

                           (1) In general

        No deduction shall be allowed under subsection (a) for any 
    expenses of an advertisement carried by a foreign broadcast 
    undertaking and directed primarily to a market in the United States. 
    This paragraph shall apply only to foreign broadcast undertakings 
    located in a country which denies a similar deduction for the cost 
    of advertising directed primarily to a market in the foreign country 
    when placed with a United States broadcast undertaking.

                      (2) Broadcast undertaking

        For purposes of paragraph (1), the term ``broadcast 
    undertaking'' includes (but is not limited to) radio and television 
    stations.

(k) Stock reacquisition expenses

                           (1) In general

        Except as provided in paragraph (2), no deduction otherwise 
    allowable shall be allowed under this chapter for any amount paid or 
    incurred by a corporation in connection with the reacquisition of 
    its stock or of the stock of any related person (as defined in 
    section 465(b)(3)(C)).

                           (2) Exceptions

        Paragraph (1) shall not apply to--

        (A) Certain specific deductions

            Any--
                (i) deduction allowable under section 163 (relating to 
            interest),
                (ii) deduction for amounts which are properly allocable 
            to indebtedness and amortized over the term of such 
            indebtedness, or
                (iii) deduction for dividends paid (within the meaning 
            of section 561).

        (B) Stock of certain regulated investment companies

            Any amount paid or incurred in connection with the 
        redemption of any stock in a regulated investment company which 
        issues only stock which is redeemable upon the demand of the 
        shareholder.

(l) Special rules for health insurance costs of self-employed 
        individuals

                     (1) Allowance of deduction

        (A) In general

            In the case of an individual who is an employee within the 
        meaning of section 401(c)(1), there shall be allowed as a 
        deduction under this section an amount equal to the applicable 
        percentage of the amount paid during the taxable year for 
        insurance which constitutes medical care for the taxpayer, his 
        spouse, and dependents.

        (B) Applicable percentage

            For purposes of subparagraph (A), the applicable percentage 
        shall be determined under the following table:


                                                        The applicable
   For taxable years beginning in calendar year--       percentage is--

      1999 through 2001.............................                60
      2002..........................................                70
      2003 and thereafter...........................                100.


                           (2) Limitations

        (A) Dollar amount

            No deduction shall be allowed under paragraph (1) to the 
        extent that the amount of such deduction exceeds the taxpayer's 
        earned income (within the meaning of section 401(c)) derived by 
        the taxpayer from the trade or business with respect to which 
        the plan providing the medical care coverage is established.

        (B) Other coverage

            Paragraph (1) shall not apply to any taxpayer for any 
        calendar month for which the taxpayer is eligible to participate 
        in any subsidized health plan maintained by any employer of the 
        taxpayer or of the spouse of the taxpayer. The preceding 
        sentence shall be applied separately with respect to--
                (i) plans which include coverage for qualified long-term 
            care services (as defined in section 7702B(c)) or are 
            qualified long-term care insurance contracts (as defined in 
            section 7702B(b)), and
                (ii) plans which do not include such coverage and are 
            not such contracts.

        (C) Long-term care premiums

            In the case of a qualified long-term care insurance contract 
        (as defined in section 7702B(b)), only eligible long-term care 
        premiums (as defined in section 213(d)(10)) shall be taken into 
        account under paragraph (1).

               (3) Coordination with medical deduction

        Any amount paid by a taxpayer for insurance to which paragraph 
    (1) applies shall not be taken into account in computing the amount 
    allowable to the taxpayer as a deduction under section 213(a).

     (4) Deduction not allowed for self-employment tax purposes

        The deduction allowable by reason of this subsection shall not 
    be taken into account in determining an individual's net earnings 
    from self-employment (within the meaning of section 1402(a)) for 
    purposes of chapter 2.

         (5) Treatment of certain S corporation shareholders

        This subsection shall apply in the case of any individual 
    treated as a partner under section 1372(a), except that--
            (A) for purposes of this subsection, such individual's wages 
        (as defined in section 3121) from the S corporation shall be 
        treated as such individual's earned income (within the meaning 
        of section 401(c)(1)), and
            (B) there shall be such adjustments in the application of 
        this subsection as the Secretary may by regulations prescribe.

(m) Certain excessive employee remuneration

                           (1) In general

        In the case of any publicly held corporation, no deduction shall 
    be allowed under this chapter for applicable employee remuneration 
    with respect to any covered employee to the extent that the amount 
    of such remuneration for the taxable year with respect to such 
    employee exceeds $1,000,000.

                    (2) Publicly held corporation

        For purposes of this subsection, the term ``publicly held 
    corporation'' means any corporation issuing any class of common 
    equity securities required to be registered under section 12 of the 
    Securities Exchange Act of 1934.

                        (3) Covered employee

        For purposes of this subsection, the term ``covered employee'' 
    means any employee of the taxpayer if--
            (A) as of the close of the taxable year, such employee is 
        the chief executive officer of the taxpayer or is an individual 
        acting in such a capacity, or
            (B) the total compensation of such employee for the taxable 
        year is required to be reported to shareholders under the 
        Securities Exchange Act of 1934 by reason of such employee being 
        among the 4 highest compensated officers for the taxable year 
        (other than the chief executive officer).

                (4) Applicable employee remuneration

        For purposes of this subsection--

        (A) In general

            Except as otherwise provided in this paragraph, the term 
        ``applicable employee remuneration'' means, with respect to any 
        covered employee for any taxable year, the aggregate amount 
        allowable as a deduction under this chapter for such taxable 
        year (determined without regard to this subsection) for 
        remuneration for services performed by such employee (whether or 
        not during the taxable year).

        (B) Exception for remuneration payable on commission basis

            The term ``applicable employee remuneration'' shall not 
        include any remuneration payable on a commission basis solely on 
        account of income generated directly by the individual 
        performance of the individual to whom such remuneration is 
        payable.

        (C) Other performance-based compensation

            The term ``applicable employee remuneration'' shall not 
        include any remuneration payable solely on account of the 
        attainment of one or more performance goals, but only if--
                (i) the performance goals are determined by a 
            compensation committee of the board of directors of the 
            taxpayer which is comprised solely of 2 or more outside 
            directors,
                (ii) the material terms under which the remuneration is 
            to be paid, including the performance goals, are disclosed 
            to shareholders and approved by a majority of the vote in a 
            separate shareholder vote before the payment of such 
            remuneration, and
                (iii) before any payment of such remuneration, the 
            compensation committee referred to in clause (i) certifies 
            that the performance goals and any other material terms were 
            in fact satisfied.

        (D) Exception for existing binding contracts

            The term ``applicable employee remuneration'' shall not 
        include any remuneration payable under a written binding 
        contract which was in effect on February 17, 1993, and which was 
        not modified thereafter in any material respect before such 
        remuneration is paid.

        (E) Remuneration

            For purposes of this paragraph, the term ``remuneration'' 
        includes any remuneration (including benefits) in any medium 
        other than cash, but shall not include--
                (i) any payment referred to in so much of section 
            3121(a)(5) as precedes subparagraph (E) thereof, and
                (ii) any benefit provided to or on behalf of an employee 
            if at the time such benefit is provided it is reasonable to 
            believe that the employee will be able to exclude such 
            benefit from gross income under this chapter.

        For purposes of clause (i), section 3121(a)(5) shall be applied 
        without regard to section 3121(v)(1).

        (F) Coordination with disallowed golden parachute payments

            The dollar limitation contained in paragraph (1) shall be 
        reduced (but not below zero) by the amount (if any) which would 
        have been included in the applicable employee remuneration of 
        the covered employee for the taxable year but for being 
        disallowed under section 280G.

(n) Special rule for certain group health plans

                           (1) In general

        No deduction shall be allowed under this chapter to an employer 
    for any amount paid or incurred in connection with a group health 
    plan if the plan does not reimburse for inpatient hospital care 
    services provided in the State of New York--
            (A) except as provided in subparagraphs (B) and (C), at the 
        same rate as licensed commercial insurers are required to 
        reimburse hospitals for such services when such reimbursement is 
        not through such a plan,
            (B) in the case of any reimbursement through a health 
        maintenance organization, at the same rate as health maintenance 
        organizations are required to reimburse hospitals for such 
        services for individuals not covered by such a plan (determined 
        without regard to any government-supported individuals exempt 
        from such rate), or
            (C) in the case of any reimbursement through any corporation 
        organized under Article 43 of the New York State Insurance Law, 
        at the same rate as any such corporation is required to 
        reimburse hospitals for such services for individuals not 
        covered by such a plan.

                       (2) State law exception

        Paragraph (1) shall not apply to any group health plan which is 
    not required under the laws of the State of New York (determined 
    without regard to this subsection or other provisions of Federal 
    law) to reimburse at the rates provided in paragraph (1).

                        (3) Group health plan

        For purposes of this subsection, the term ``group health plan'' 
    means a plan of, or contributed to by, an employer or employee 
    organization (including a self-insured plan) to provide health care 
    (directly or otherwise) to any employee, any former employee, the 
    employer, or any other individual associated or formerly associated 
    with the employer in a business relationship, or any member of their 
    family.

(o) Treatment of certain reimbursed expenses of rural mail carriers

                          (1) General rule

        In the case of any employee of the United States Postal Service 
    who performs services involving the collection and delivery of mail 
    on a rural route and who receives qualified reimbursements for the 
    expenses incurred by such employee for the use of a vehicle in 
    performing such services--
            (A) the amount allowable as a deduction under this chapter 
        for the use of a vehicle in performing such services shall be 
        equal to the amount of such qualified reimbursements; and
            (B) such qualified reimbursements shall be treated as paid 
        under a reimbursement or other expense allowance arrangement for 
        purposes of section 62(a)(2)(A) (and section 62(c) shall not 
        apply to such qualified reimbursements).

             (2) Definition of qualified reimbursements

        For purposes of this subsection, the term ``qualified 
    reimbursements'' means the amounts paid by the United States Postal 
    Service to employees as an equipment maintenance allowance under the 
    1991 collective bargaining agreement between the United States 
    Postal Service and the National Rural Letter Carriers' Association. 
    Amounts paid as an equipment maintenance allowance by such Postal 
    Service under later collective bargaining agreements that supersede 
    the 1991 agreement shall be considered qualified reimbursements if 
    such amounts do not exceed the amounts that would have been paid 
    under the 1991 agreement, adjusted for changes in the Consumer Price 
    Index (as defined in section 1(f)(5)) since 1991.

(p) Cross reference

            (1) For special rule relating to expenses in connection with 
        subdividing real property for sale, see section 1237.
            (2) For special rule relating to the treatment of payments 
        by a transferee of a franchise, trademark, or trade name, see 
        section 1253.
            (3) For special rules relating to--
                (A) funded welfare benefit plans, see section 419, and
                (B) deferred compensation and other deferred benefits, 
            see section 404.

(Aug. 16, 1954, ch. 736, 68A Stat. 45; Pub. L. 85-866, title I, 
Sec. 5(a), Sept. 2, 1958, 72 Stat. 1608; Pub. L. 86-779, Secs. 7(b), 
8(a), Sept. 14, 1960, 74 Stat. 1002, 1003; Pub. L. 87-834, Secs. 3(a), 
4(b), Oct. 16, 1962, 76 Stat. 973, 976; Pub. L. 91-172, title V, 
Sec. 516(c)(2)(A), title IX, Sec. 902(a), (b), Dec. 30, 1969, 83 Stat. 
648, 710; Pub. L. 92-178, title III, Sec. 310(a), Dec. 10, 1971, 85 
Stat. 525; Pub. L. 94-455, title XIX, Secs. 1901(c)(4), 1906(b)(13)(A), 
Oct. 4, 1976, 90 Stat. 1803, 1834; Pub. L. 97-34, title I, Sec. 127(a), 
Aug. 13, 1981, 95 Stat. 202; Pub. L. 97-35, title XXI, Sec. 2146(b), 
Aug. 13, 1981, 95 Stat. 801; Pub. L. 97-51, Sec. 139(b)(1), Oct. 1, 
1981, 95 Stat. 967; Pub. L. 97-216, title II, Sec. 215(a), July 18, 
1982, 96 Stat. 194; Pub. L. 97-248, title I, Sec. 128(b), title II, 
Sec. 288(a), Sept. 3, 1982, 96 Stat. 366, 571; Pub. L. 98-369, div. A, 
title V, Sec. 512(b), div. B, title III, Sec. 2354(d), July 18, 1984, 98 
Stat. 863, 1102; Pub. L. 98-573, title II, Sec. 232(a), Oct. 30, 1984, 
98 Stat. 2991; Pub. L. 99-272, title X, Sec. 10001(a), (c), (d), Apr. 7, 
1986, 100 Stat. 222, 223, 227; Pub. L. 99-509, title IX, 
Secs. 9307(c)(2)(B), 9501(a)(1), (b)(1)(A), (2)(A), (c)(1), (d)(1), Oct. 
21, 1986, 100 Stat. 1995, 2075-2077; Pub. L. 99-514, title VI, 
Sec. 613(a), title XI, Sec. 1161(a), title XVIII, Sec. 1895(d)(1)(A), 
(2)(A), (3)(A), (4)(A), (5)(A), (6)(A), (7), Oct. 22, 1986, 100 Stat. 
2251, 2509, 2936-2940; Pub. L. 100-647, title I, Secs. 1011B(b)(1)-(3), 
1018(t)(7)(B), title III, Sec. 3011(b)(2), (3), Nov. 10, 1988, 102 Stat. 
3488, 3589, 3624, 3625; Pub. L. 101-140, title II, Sec. 203(a)(4), Nov. 
8, 1989, 103 Stat. 830; Pub. L. 101-239, title VI, Sec. 6202(b)(3)(A), 
title VII, Secs. 7107(a)(1), (b), 7862(c)(3)(A), Dec. 19, 1989, 103 
Stat. 2233, 2306, 2432; Pub. L. 101-508, title XI, Secs. 11111(d)(2), 
11410(a), Nov. 5, 1990, 104 Stat. 1388-413, 1388-479; Pub. L. 102-227, 
title I, Sec. 110(a)(1), Dec. 11, 1991, 105 Stat. 1688; Pub. L. 102-486, 
title XIX, Sec. 1938(a), Oct. 24, 1992, 106 Stat. 3033; Pub. L. 103-66, 
title XIII, Secs. 13131(d)(2), 13174(a)(1), (b)(1), 13211(a), 13222(a), 
13442(a), Aug. 10, 1993, 107 Stat. 435, 457, 469, 477, 568; Pub. L. 104-
7, Sec. 1(a), (b), Apr. 11, 1995, 109 Stat. 93; Pub. L. 104-188, title 
I, Sec. 1704(p)(1)-(3), Aug. 20, 1996, 110 Stat. 1886; Pub. L. 104-191, 
title III, Secs. 311(a), 322(b)(2)(B), Aug. 21, 1996, 110 Stat. 2053, 
2060; Pub. L. 105-34, title IX, Sec. 934(a), title XII, Secs. 1203(a), 
1204(a), title XVI, Sec. 1602(c), Aug. 5, 1997, 111 Stat. 882, 994, 995, 
1094; Pub. L. 105-206, title VI, Sec. 6012(a), July 22, 1998, 112 Stat. 
818; Pub. L. 105-277, div. J, title II, Sec. 2002(a), Oct. 21, 1998, 112 
Stat. 2681-901.)

                       References in Text

    The Foreign Corrupt Practices Act of 1977, referred to in subsec. 
(c)(1), is title I of Pub. L. 95-213, Dec. 19, 1977, 91 Stat. 1494, as 
amended, which enacted sections 78dd-1 and 78dd-2 of Title 15, Commerce 
and Trade, and amended sections 78m and 78ff of Title 15. For complete 
classification of this Act to the Code, see Short Title of 1977 
Amendment note set out under section 78a of Title 15 and Tables.
    The Social Security Act, referred to in subsec. (c)(3), is act Aug. 
14, 1935, ch. 531, 49 Stat. 620, as amended, which is classified 
generally to chapter 7 (Sec. 301 et seq.) of Title 42, The Public Health 
and Welfare. For complete classification of this Act to the Code, see 
section 1305 of Title 42 and Tables.
    The antitrust laws, referred to in subsec. (g), are classified 
generally to section 1 et seq. of Title 15, Commerce and Trade.
    Section 4 of the Clayton Act, referred to in subsec. (g)(1), is 
classified to section 15 of Title 15.
    The Securities Exchange Act of 1934, referred to in subsec. (m)(2), 
(3)(B), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is 
classified principally to chapter 2B (Sec. 78a et seq.) of Title 15. 
Section 12 of the Act is classified to section 78l of Title 15. For 
complete classification of this Act to the Code, see section 78a of 
Title 15 and Tables.


                               Amendments

    1998--Subsec. (a). Pub. L. 105-206, in last sentence, substituted 
``investigate or prosecute, or provide support services for the 
investigation or prosecution of, a Federal crime.'' for ``investigate, 
or provide support services for the investigation of, a Federal crime.''
    Subsec. (l)(1)(B). Pub. L. 105-277 amended table in subpar. (B) 
generally. Prior to amendment, table read as follows:


                                                        The applicable
  ``For taxable years beginning in calendar year--      percentage is--

      1997..........................................                40
      1998 and 1999.................................                45
      2000 and 2001.................................                50
      2002..........................................                60
      2003 through 2005.............................                80
      2006..........................................                90
      2007 and thereafter...........................              100.''


    1997--Subsec. (a). Pub. L. 105-34, Sec. 1204(a), inserted at end of 
concluding provisions ``The preceding sentence shall not apply to any 
Federal employee during any period for which such employee is certified 
by the Attorney General (or the designee thereof) as traveling on behalf 
of the United States in temporary duty status to investigate, or provide 
support services for the investigation of, a Federal crime.''
    Subsec. (l)(1)(B). Pub. L. 105-34, Sec. 934(a), amended table 
generally. Prior to amendment, table read as follows:


                                                        The applicable
  ``For taxable years beginning  in calendar year--     percentage is--

      1997..........................................        40 percent
      1998 through 2002.............................        45 percent
      2003..........................................        50 percent
      2004..........................................        60 percent
      2005..........................................        70 percent
      2006 or thereafter............................       80 percent.''


    Subsec. (l)(2)(B). Pub. L. 105-34, Sec. 1602(c), inserted ``The 
preceding sentence shall be applied separately with respect to--'' at 
end and added cls. (i) and (ii).
    Subsecs. (o), (p). Pub. L. 105-34, Sec. 1203(a), added subsec. (o) 
and redesignated former subsec. (o) as (p).
    1996--Subsec. (k). Pub. L. 104-188, Sec. 1704(p)(3), substituted 
``reaquisition'' for ``redemption'' in heading.
    Subsec. (k)(1). Pub. L. 104-188, Sec. 1704(p)(1), substituted ``the 
reacquisition of its stock or of the stock of any related person (as 
defined in section 465(b)(3)(C))'' for ``the redemption of its stock''.
    Subsec. (k)(2)(A). Pub. L. 104-188, Sec. 1704(p)(2), struck out 
``or'' at end of cl. (i), added cl. (ii), and redesignated former cl. 
(ii) as (iii).
    Subsec. (l)(1). Pub. L. 104-191, Sec. 311(a), amended par. (1) 
generally. Prior to amendment, par. (1) read as follows:
    ``(1) In general.--In the case of an individual who is an employee 
within the meaning of section 401(c)(1), there shall be allowed as a 
deduction under this section an amount equal to 30 percent of the amount 
paid during the taxable year for insurance which constitutes medical 
care for the taxpayer, his spouse, and dependents.''
    Subsec. (l)(2)(C). Pub. L. 104-191, Sec. 322(b)(2)(B), added subpar. 
(C).
    1995--Subsec. (l)(1). Pub. L. 104-7, Sec. 1(b), substituted ``30 
percent'' for ``25 percent''.
    Subsec. (l)(6). Pub. L. 104-7, Sec. 1(a), struck out par. (6) 
``Termination'' which read as follows: ``This subsection shall not apply 
to any taxable year beginning after December 31, 1993.''
    1993--Subsec. (e). Pub. L. 103-66, Sec. 13222(a), amended heading 
and text generally. Prior to amendment, text consisted of pars. (1) and 
(2) relating to deduction of ordinary and necessary expenses paid or 
incurred in connection with certain activities relating to 
congressional, State, and local legislation.
    Subsec. (l)(2)(B). Pub. L. 103-66, Sec. 13174(b)(1), amended heading 
and text of subpar. (B) generally. Prior to amendment, text read as 
follows: ``Paragraph (1) shall not apply to any taxpayer who is eligible 
to participate in any subsidized health plan maintained by any employer 
of the taxpayer or of the spouse of the taxpayer.''
    Subsec. (l)(3). Pub. L. 103-66, Sec. 13131(d)(2), amended heading 
and text of par. (3) generally. Prior to amendment, text read as 
follows:
    ``(A) Medical deduction.--Any amount paid by a taxpayer for 
insurance to which paragraph (1) applies shall not be taken into account 
in computing the amount allowable to the taxpayer as a deduction under 
section 213(a).
    ``(B) Health insurance credit.--The amount otherwise taken into 
account under paragraph (1) as paid for insurance which constitutes 
medical care shall be reduced by the amount (if any) of the health 
insurance credit allowable to the taxpayer for the taxable year under 
section 32.''
    Subsec. (l)(6). Pub. L. 103-66, Sec. 13174(a)(1), substituted 
``December 31, 1993'' for ``June 30, 1992''.
    Subsec. (m). Pub. L. 103-66, Sec. 13211(a), added subsec. (m). 
Former subsec. (m) redesignated (n).
    Subsec. (n). Pub. L. 103-66, Sec. 13442(a), added subsec. (n). 
Former subsec. (n) redesignated (o).
    Pub. L. 103-66, Sec. 13211(a), redesignated subsec. (m) as (n).
    Subsec. (o). Pub. L. 103-66, Sec. 13442(a), redesignated subsec. (n) 
as (o).
    1992--Subsec. (a). Pub. L. 102-486 inserted at end ``For purposes of 
paragraph (2), the taxpayer shall not be treated as being temporarily 
away from home during any period of employment if such period exceeds 1 
year.''
    1991--Subsec. (l)(6). Pub. L. 102-227 substituted ``June 30, 1992'' 
for ``December 31, 1991''.
    1990--Subsec. (l)(3). Pub. L. 101-508, Sec. 11111(d)(2), substituted 
heading for one which read: ``Coordination with medical deduction'' and 
amended text generally. Prior to amendment, text read as follows: ``Any 
amount paid by a taxpayer for insurance to which paragraph (1) applies 
shall not be taken into account in computing the amount allowable to the 
taxpayer as a deduction under section 213(a).''
    Subsec. (l)(6). Pub. L. 101-508, Sec. 11410(a), substituted 
``December 31, 1991'' for ``September 30, 1990''.
    1989--Subsec. (i). Pub. L. 101-239, Sec. 6202(b)(3)(A), struck out 
subsec. (i) which read as follows:
    ``(1) Coverage relating to end stage renal disease.--The expenses 
paid or incurred by an employer for a group health plan shall not be 
allowed as a deduction under this section if the plan differentiates in 
the benefits it provides between individuals having end stage renal 
disease and other individuals covered by such plan on the basis of the 
existence of end stage renal disease, the need for renal dialysis, or in 
any other manner.
    ``(2) Group health plan.--For purposes of this subsection the term 
`group health plan' means any plan of, or contributed to by, an employer 
to provide medical care (as defined in section 213(d) to his employees, 
former employees, or the families of such employees or former employees, 
directly or through insurance, reimbursement, or otherwise.''
    Subsec. (k)(2)(B)(iv). Pub. L. 101-239, Sec. 7862(c)(3)(A), amended 
cl. (iv) as it existed prior to repeal of subsec. (k) by Pub. L. 100-
647, by substituting ``entitlement'' for ``eligibility'' in heading and 
inserting ``which does not contain any exclusion or limitation with 
respect to any preexisting condition of such beneficiary'' after ``or 
otherwise)'' in subclause (I).
    Subsec. (l)(2). Pub. L. 101-140 redesignated subpar. (C) as (B) and 
struck out former subpar. (B) which read as follows: ``Required 
coverage.--Paragraph (1) shall not apply to any taxpayer for any taxable 
year unless coverage is provided under 1 or more plans meeting the 
requirements of section 89, treating such coverage as an employer-
provided benefit.''
    Subsec. (l)(5). Pub. L. 101-239, Sec. 7107(b), added par. (5). 
Former par. (5) redesignated (6).
    Pub. L. 101-239, Sec. 7107(a)(1), substituted ``September 30, 1990'' 
for ``December 31, 1989''.
    Subsec. (l)(6). Pub. L. 101-239, Sec. 7107(b), redesignated former 
par. (5) as (6).
    1988--Subsec. (i)(2), (3). Pub. L. 100-647, Sec. 3011(b)(2), 
redesignated par. (3) as (2) and struck out former par. (2) which 
required plans to provide continuation coverage to certain individuals.
    Subsec. (k). Pub. L. 100-647, Sec. 3011(b)(3), redesignated subsec. 
(l), relating to stock redemption expenses, as (k) and struck out former 
subsec. (k) which related to continuation coverage requirements of group 
health plans.
    Subsec. (k)(5)(B). Pub. L. 100-647, Sec. 1018(t)(7)(B), made 
amendment identical to Pub. L. 99-509, Sec. 9307(c)(2)(B), which amended 
directory language of Pub. L. 99-514, Sec. 1895(d)(5)(A), by 
substituting ``section 162(k)(5)'' for ``section 162(k)(2)''. See 1986 
Amendment note below.
    Subsec . (l). Pub. L. 100-647, Sec. 3011(b)(3)(A), (B), redesignated 
subsec. (m), relating to special rules for health insurance costs of 
self-employed individuals, as (l). Former subsec. (l), relating to stock 
redemption expenses, redesignated (k).
    Subsec. (m). Pub. L. 100-647, Sec. 3011(b)(3)(B), (C), redesignated 
subsec. (n), relating to cross references, as (m). Former subsec. (m), 
relating to special rules for health insurance costs of self-employed 
individuals, redesignated (l).
    Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m), 
relating to cross references, as (n).
    Subsec. (m)(2)(A). Pub. L. 100-647, Sec. 1011B(b)(3), inserted 
``derived by the taxpayer from the trade or business with respect to 
which the plan providing the medical care coverage is established'' 
after ``401(c))''.
    Subsec. (m)(4), (5). Pub. L. 100-647, Sec. 1011B(b)(1), added par. 
(4) and redesignated former par. (4) as (5).
    Subsec. (n). Pub. L. 100-647, Sec. 3011(b)(3)(C), redesignated 
subsec. (n) as (m).
    Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m), 
relating to cross references, as (n).
    1986--Subsec. (i)(1). Pub. L. 99-272, Sec. 10001(d), substituted 
``Coverage relating to end stage renal disease'' for ``General rule'' in 
heading.
    Subsec. (i)(2), (3). Pub. L. 99-272, Sec. 10001(a), added par. (2) 
and redesignated former par. (2) as (3).
    Subsec. (k). Pub. L. 99-272, Sec. 10001(c), added subsec. (k). 
Former subsec. (k) redesignated (l).
    Subsec. (k)(2)(A). Pub. L. 99-514, Sec. 1895(d)(1)(A), inserted ``If 
coverage under the plan is modified for any group of similarly situated 
beneficiaries, the coverage shall also be modified in the same manner 
for all individuals who are qualified beneficiaries under the plan 
pursuant to this subsection in connection with such group.''
    Subsec. (k)(2)(B)(i). Pub. L. 99-514, Sec. 1895(d)(2)(A), 
substituted ``Maximum required period'' for ``Maximum period'' in 
heading and amended text generally. Prior to amendment, text read as 
follows: ``In the case of--
        ``(I) a qualifying event described in paragraph (3)(B) (relating 
    to terminations and reduced hours), the date which is 18 months 
    after the date of the qualifying event, and
        ``(II) any qualifying event not described in subclause (I), the 
    date which is 36 months after the date of the qualifying event.''
    Subsec. (k)(2)(B)(i)(II). Pub. L. 99-509, Sec. 9501(b)(1)(A)(i), 
inserted ``(other than a qualifying event described in paragraph 
(3)(F))''.
    Subsec. (k)(2)(B)(i)(III), (IV). Pub. L. 99-509, 
Sec. 9501(b)(1)(A)(ii)-(iv), added subcl. (III), redesignated former 
subcl. (III) as (IV), and inserted ``or (3)(F)''.
    Subsec. (k)(2)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(3)(A), inserted 
``The payment of any premium (other than any payment referred to in the 
last sentence of subparagraph (C)) shall be considered to be timely if 
made within 30 days after the date due or within such longer period as 
applies to or under the plan.''
    Subsec. (k)(2)(B)(iv). Pub. L. 99-514, Sec. 1895(d)(4)(A)(iii), 
substituted ``Group health plan coverage'' for ``Reemployment'' in 
heading.
    Subsec. (k)(2)(B)(iv)(I). Pub. L. 99-514, Sec. 1895(d)(4)(A)(ii), 
substituted ``covered under any other group health plan (as an employee 
or otherwise)'' for ``a covered employee under any other group health 
plan''.
    Subsec. (k)(2)(B)(iv)(II). Pub. L. 99-509, Sec. 9501(b)(2)(A), 
inserted ``in the case of a qualified beneficiary other than a qualified 
beneficiary described in paragraph (7)(B)(iv),''.
    Subsec. (k)(2)(B)(v). Pub. L. 99-514, Sec. 1895(d)(4)(A)(i), struck 
out cl. (v), remarriage of spouse, which read as follows: ``In the case 
of an individual who is a qualified beneficiary by reason of being the 
spouse of a covered employee, the date on which the beneficiary 
remarries and becomes covered under a group health plan.''
    Subsec. (k)(3). Pub. L. 99-509, Sec. 9501(a)(1), added subpar. (F) 
and concluding provisions.
    Subsec. (k)(5)(B). Pub. L. 99-514, Sec. 1895(d)(5)(A), as amended by 
Pub. L. 99-509, Sec. 9307(c)(2)(B), and Pub. L. 100-647, 
Sec. 1018(t)(7)(B), inserted ``of continuation coverage'' and ``If there 
is a choice among types of coverage under the plan, each qualified 
beneficiary is entitled to make a separate selection among such types of 
coverage.'' See 1988 Amendment note above.
    Subsec. (k)(6)(B). Pub. L. 99-509, Sec. 9501(d)(1), substituted 
``(D), or (F)'' for ``or (D)''.
    Subsec. (k)(6)(C). Pub. L. 99-514, Sec. 1895(d)(6)(A), inserted 
``within 60 days after the date of the qualifying event''.
    Subsec. (k)(6)(D)(i). Pub. L. 99-509, Sec. 9501(d)(1), substituted 
``(D), or (F)'' for ``or (D)''.
    Subsec. (k)(7)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(7), added cl. 
(iii).
    Subsec. (k)(7)(B)(iv). Pub. L. 99-509, Sec. 9501(c)(1), added cl. 
(iv).
    Subsec. (l). Pub. L. 99-514, Sec. 613(a), added subsec. (l). Former 
subsec. (l) redesignated (m).
    Pub. L. 99-272, Sec. 10001(c), redesignated former subsec. (k), 
relating to cross references, as (l).
    Subsec. (m). Pub. L. 99-514, Sec. 1161(a), added subsec. (m) 
relating to special rules for health insurance costs of self-employed 
individuals, and further directed that this section be amended ``by 
redesignating subsection (n) as subsection (m)'', which directory 
language could not be executed because this section does not contain a 
subsec. (n).
    Pub. L. 99-514, Sec. 613(a), redesignated subsec. (l), relating to 
cross references, as (m).
    1984--Subsec. (i)(2). Pub. L. 98-369, Sec. 2354(d), substituted 
``section 213(d)'' for ``section 213(e)''.
    Subsec. (j). Pub. L. 98-573 added subsec. (j). Former subsec. (j) 
redesignated (k).
    Subsec. (j)(3). Pub. L. 98-369, Sec. 512(b), added par. (3).
    Subsec. (k). Pub. L. 98-573 redesignated former subsec. (j) as (k).
    1982--Subsec. (a). Pub. L. 97-216 inserted provisions under which 
amounts expended by Members of Congress within each taxable year for 
living expenses shall not be deductible for income tax purposes in 
excess of $3,000.
    Subsec. (c)(1). Pub. L. 97-248, Sec. 288(a), substituted ``is 
unlawful under the Foreign Corrupt Practices Act of 1977'' for ``would 
be unlawful under the laws of the United States if such laws were 
applicable to such payment and to such official or employee'' after 
``government, the payment'', and ``(or is unlawful under the Foreign 
Corrupt Practices Act of 1977)'' for ``(or would be unlawful under the 
laws of the United States)'' before ``shall be upon the Secretary''.
    Subsec. (h). Pub. L. 97-248, Sec. 128(b)(2), redesignated subsec. 
(i), relating to State legislators' travel expenses away from home, as 
(h). Former subsec. (h), relating to group health plans, redesignated 
(i).
    Subsec. (i). Pub. L. 97-248, Sec. 128(b)(2), redesignated former 
subsec. (h), relating to group health plans, as (i). Former subsec. (i), 
relating to State legislators' travel expenses away from home, 
redesignated (h). Former subsec. (i), relating to cross references, 
redesignated (j).
    Subsec. (j). Pub. L. 97-248, Sec. 128(b)(1), redesignated former 
subsec. (i), relating to cross references, as (j).
    1981--Subsec. (a). Pub L. 97-51 struck out provisions under which 
amounts expended by Members of Congress within each taxable year for 
living expenses could not be deductible for income tax purposes in 
excess of $3,000.
    Subsec. (h). Pub. L. 97-35 added subsec. (h) relating to group 
health plans. Former subsec. (h), as added by Pub. L. 97-34 and relating 
to State legislators' travel expenses away from home, redesignated (i). 
See 1982 Amendment note above.
    Pub. L. 97-34 added subsec. (h) relating to State legislators' 
travel expenses away from home. Former subsec. (h), relating to cross 
references, redesignated (i). See 1982 Amendment note above.
    Subsec. (i). Pub. L. 97-35 redesignated former subsec. (h), as added 
by Pub. L. 97-34 and relating to State legislators' travel expenses away 
from home, as (i). See 1982 Amendment note above.
    Pub. L. 97-34 redesignated former subsec. (h), relating to cross 
references, as (i). See 1982 Amendment note above.
    1976--Subsec. (a). Pub. L. 94-455, Sec. 1901(c)(4), struck out 
reference to Territory in provisions following par. (3).
    Subsec. (c). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out in 
pars. (1) and (2) ``or his delegate'' after ``Secretary''.
    1971--Subsec. (c). Pub. L. 92-178, Sec. 310(a)(2), substituted 
``Illegal bribes, kickbacks, and other payments'' for ``Bribes and 
illegal kickbacks'' in heading.
    Subsec. (c)(2). Pub. L. 92-178, Sec. 310(a)(1), substituted 
provisions respecting ``Other illegal payments'' for former provisions 
on ``Other bribes or kickbacks'' reading ``If in a criminal proceeding a 
taxpayer is convicted of making a payment (other than a payment 
described in paragraph (1) which is an illegal bribe or kickback, or his 
plea of guilty or nolo contendere to an indictment or information 
charging the making of such a payment is entered or accepted in such a 
proceeding, no deduction shall be allowed under subsection (a) on 
account of such payment or any related payment made prior to the date of 
the final judgment in such proceeding.''
    Subsec. (c)(3). Pub. L. 92-178, Sec. 310(a)(1), substituted 
provisions respecting kickbacks, rebates, and bribes under medicare and 
medicaid for former statute of limitations provisions.
    1969--Subsec. (c). Pub. L. 91-172, Sec. 902(b), designated existing 
provisions as par. (1), extended the applicability of nondeductible 
expenses for payments to any official or employee of any government, or 
of any agency or instrumentality of any government, and added pars. (2) 
and (3).
    Subsecs. (f), (g). Pub. L. 91-172, Sec. 902(a), added subsecs. (f) 
and (g). Former subsec. (f) redesignated (h).
    Subsec. (h). Pub. L. 91-172, Secs. 516(c)(2)(A), 902(a), 
redesignated former subsec. (f) as (h), substituted ``(1) For'' for 
``For'', and inserted reference to section 1253 for special rule 
relating to the treatment of payments by a transferee of a franchise, 
trademark, or trade name.
    1962--Subsec. (a)(2). Pub. L. 87-834, Sec. 4(b), substituted 
``(including amounts expended for meals and lodging other than amounts 
which are lavish or extravagant under the circumstances)'' for 
``including the entire amount expended for meals and lodging)''.
    Subsecs. (e), (f). Pub. L. 87-834, Sec. 3(a), added subsec. (e) and 
redesignated former subsec. (e) as (f).
    1960--Subsec. (b). Pub. L. 86-779, Sec. 7(b), inserted ``the dollar 
limitations,'' after ``the percentage limitations,''.
    Subsecs. (d), (e). Pub. L. 86-779, Sec. 8(a), added subsec. (d) and 
redesignated former subsec. (d) as (e).
    1958--Subsecs. (c), (d). Pub. L. 85-866, Sec. 5(a), added subsec. 
(c) and redesignated former subsec. (c) as (d).


                    Effective Date of 1998 Amendments

    Pub. L. 105-277, div. J, title II, Sec. 2002(b), Oct. 21, 1998, 112 
Stat. 2681-901, provided that: ``The amendment made by this section 
[amending this section] shall apply to taxable years beginning after 
December 31, 1998.''
    Amendment by Pub. L. 105-206 effective, except as otherwise 
provided, as if included in the provisions of the Taxpayer Relief Act of 
1997, Pub. L. 105-34, to which such amendment relates, see section 6024 
of Pub. L. 105-206, set out as a note under section 1 of this title.


                    Effective Date of 1997 Amendment

    Section 934(b) of Pub. L. 105-34 provided that: ``The amendment made 
by this section [amending this section] shall apply to taxable years 
beginning after December 31, 1996.''
    Section 1203(c) of Pub. L. 105-34 provided that: ``The amendments 
made by this section [amending this section and repealing provisions set 
out as a note below] shall apply to taxable years beginning after 
December 31, 1997.''
    Section 1204(b) of Pub. L. 105-34 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to amounts 
paid or incurred with respect to taxable years ending after the date of 
the enactment of this Act [Aug. 5, 1997].''
    Amendment by section 1602(c) of Pub. L. 105-34 effective as if 
included in the provisions of the Health Insurance Portability and 
Accountability Act of 1996, Pub. L. 104-191, to which such amendment 
relates, see section 1602(i) of Pub. L. 105-34, set out as a note under 
section 26 of this title.


                    Effective Date of 1996 Amendments

    Amendment by section 311(a) of Pub. L. 104-191 applicable to taxable 
years beginning after Dec. 31, 1996, see section 311(c) of Pub. L. 104-
191, set out as a note under section 104 of this title.
    Section 322(c) of Pub. L. 104-191 provided that: ``The amendments 
made by this section [amending this section and section 213 of this 
title] shall apply to taxable years beginning after December 31, 1996.''
    Section 1704(p)(4) of Pub. L. 104-188 provided that:
    ``(A) In general.--Except as provided in subparagraph (B), the 
amendments made by this subsection [amending this section] shall apply 
to amounts paid or incurred after September 13, 1995, in taxable years 
ending after such date.
    ``(B) Paragraph (2).--The amendment made by paragraph (2) [amending 
this section] shall take effect as if included in the amendment made by 
section 613 of the Tax Reform Act of 1986 [Pub. L. 99-514].''


                    Effective Date of 1995 Amendment

    Section 1(c) of Pub. L. 104-7 provided that:
    ``(1) Extension.--The amendment made by subsection (a) [amending 
this section] shall apply to taxable years beginning after December 31, 
1993.
    ``(2) Increase.--The amendment made by subsection (b) [amending this 
section] shall apply to taxable years beginning after December 31, 
1994.''


                    Effective Date of 1993 Amendment

    Amendment by section 13131(d)(2) of Pub. L. 103-66 applicable to 
taxable years beginning after Dec. 31, 1993, see section 13131(e) of 
Pub. L. 103-66, set out as a note under section 32 of this title.
    Section 13174(a)(3) of Pub. L. 103-66 provided that: ``The 
amendments made by this subsection [amending this section and repealing 
provisions set out below] shall apply to taxable years ending after June 
30, 1992.''
    Section 13174(b)(2) of Pub. L. 103-66 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply to taxable 
years beginning after December 31, 1992.''
    Section 13211(b) of Pub. L. 103-66 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to amounts 
which would otherwise be deductible for taxable years beginning on or 
after January 1, 1994.''
    Section 13222(e) of Pub. L. 103-66 provided that: ``The amendments 
made by this section [amending this section and sections 170, 6033, and 
7871 of this title] shall apply to amounts paid or incurred after 
December 31, 1993.''
    Section 13442(b) of Pub. L. 103-66, as amended by Pub. L. 104-7, 
Sec. 5, Apr. 11, 1995, 109 Stat. 96, provided that: ``The provisions of 
this section [amending this section] shall apply to services provided 
after February 2, 1993, and on or before December 31, 1995.''


                    Effective Date of 1992 Amendment

    Section 1938(b) of Pub. L. 102-486 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to costs paid 
or incurred after December 31, 1992.''


                    Effective Date of 1991 Amendment

    Section 110(b) of Pub. L. 102-227 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1991.''


                    Effective Date of 1990 Amendment

    Amendment by section 11111(d)(2) of Pub. L. 101-508 applicable to 
taxable years beginning after Dec. 31, 1990, see section 11111(f) of 
Pub. L. 101-508, set out as a note under section 32 of this title.
    Section 11410(c) of Pub. L. 101-508 provided that: ``The amendments 
made by this section [amending this section and repealing provisions set 
out below] shall apply to taxable years beginning after December 31, 
1989.''


                    Effective Date of 1989 Amendments

    Section 6202(b)(5) of Pub. L. 101-239 provided that: ``The 
amendments made by this subsection [amending this section, sections 
4980B and 5000 of this title, sections 623 and 631 of Title 29, Labor, 
and sections 1395p, 1395r, and 1395y of Title 42, The Public Health and 
Welfare] shall apply to items and services furnished after the date of 
the enactment of this Act [Dec. 19, 1989].''
    Section 7107(c) of Pub. L. 101-239 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1989.''
    Section 7862(c)(3)(D) of Pub. L. 101-239 provided that: ``The 
amendments made by this paragraph [amending this section, section 4980B 
of this title, and section 1162 of Title 29, Labor] shall apply to--
        ``(i) qualifying events occurring after December 31, 1989, and
        ``(ii) in the case of qualified beneficiaries who elected 
    continuation coverage after December 31, 1988, the period for which 
    the required premium was paid (or was attempted to be paid but was 
    rejected as such).''
    Amendment by Pub. L. 101-140 effective as if included in section 
1151 of Pub. L. 99-514, see section 203(c) of Pub. L. 101-140, set out 
as a note under section 79 of this title.


                    Effective Date of 1988 Amendment

    Amendment by sections 1011B(b)(1)-(3) and 1018(t)(7)(B) of Pub. L. 
100-647 effective, except as otherwise provided, as if included in the 
provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such 
amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a 
note under section 1 of this title.
    Section 3011(d) of Pub. L. 100-647 provided that: ``The amendments 
made by this section [enacting section 4980B of this title, and amending 
this section, sections 106 and 414 of this title, section 1167 of Title 
29, Labor, and section 300bb-8 of Title 42, The Public Health and 
Welfare] shall apply to taxable years beginning after December 31, 1988, 
but shall not apply to any plan for any plan year to which section 
162(k) of the Internal Revenue Code of 1986 (as in effect on the day 
before the date of the enactment of this Act [Nov. 10, 1988]) did not 
apply by reason of section 10001(e)(2) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 [section 10001(e)(2) of Pub. L. 99-
272, set out as an Effective Date of 1986 Amendment note under section 
106 of this title].''


                    Effective Date of 1986 Amendments

    Section 613(b) of Pub. L. 99-514 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply to any amount 
paid or incurred after February 28, 1986, in taxable years ending after 
such date.''
    Section 1161(b) of Pub. L. 99-514 provided that:
    ``(1) In general.--The amendment made by this section [amending this 
section] shall apply to taxable years beginning after December 31, 1986.
    ``(2) Transitional rule.--In the case of any year to which section 
89 of the Internal Revenue Code of 1986 does not apply, [former] section 
162(m)(2)(B) of such Code shall be applied by substituting any 
nondiscrimination requirements otherwise applicable for the requirements 
of section 89 of such Code.
    ``(3) Assistance.--The Secretary of the Treasury or his delegate 
shall provide guidance to self-employed individuals to assist them in 
meeting the requirements of section 89 of the Internal Revenue Code of 
1986 with respect to coverage required by the amendments made by this 
section [amending this section].''
    Section 1895(d)(6)(D) of Pub. L. 99-514 provided that: ``The 
amendments made by this paragraph [amending this section, section 1166 
of Title 29, Labor, and section 300bb-6 of Title 42, The Public Health 
and Welfare] shall only apply with respect to qualifying events 
occurring after the date of the enactment of this Act [Oct. 22, 1986].''
    Section 1895(e) of Pub. L. 99-514 provided that: ``Except as 
otherwise provided in this section, the amendments made by this section 
[amending this section, section 3121 of this title, sections 1162 and 
1165 to 1167 of Title 29, sections 300bb-2, 300bb-5, 300bb-6, 410, 1301, 
1320c-13, 1395p, 1395u, 1395cc, 1395dd, 1395mm, 1395ww, 1395yy, 1396a, 
1396b, 1396d, and 1396s of Title 42, enacting provisions set out as 
notes under this section, section 3121 of this title, section 1167 of 
Title 29, and sections 1395u, 1395y, 1395ww, and 1395yy of Title 42, and 
amending provisions set out as notes under sections 403, 1395u, 1395cc, 
1395mm, 1395ww, 1395yy, and 1396b of Title 42] shall be effective as if 
included in the enactment of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 [Pub. L. 99-272].''
    Amendment by section 9307(c)(2)(B) of Pub. L. 99-509 effective as if 
included in the enactment of Tax Reform Act of 1986, Pub. L. 99-514, see 
section 9307(c)(2) of Pub. L. 99-509, set out as a note under section 
1395u of Title 42.
    Section 9501(e) of Pub. L. 99-509 provided that:
    ``(1) In general.--The amendments made by this section [amending 
this section and sections 1162, 1163, 1166, and 1167 of Title 29, Labor] 
shall take effect as if included in title X of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 [sections 10001 to 10003 of Pub. L. 
99-272].
    ``(2) Treatment of certain bankruptcy proceedings.--Notwithstanding 
paragraph (1), section 10001(e) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 [set out as a note under section 106 of this 
title], and section 10002(d) of such Act [set out as a note under 
section 1161 of Title 29], the amendments made by this section [amending 
this section and sections 1162, 1163, 1166, and 1167 of Title 29] and by 
sections 10001 and 10002 of such Act [enacting sections 1161 to 1168 of 
Title 29, amending this section, section 106 of this title, and section 
1132 of Title 29, and enacting provisions set out as notes under section 
106 of this title and sections 1161 and 1166 of Title 29] shall apply in 
the case of plan years ending during the 12-month period beginning July 
1, 1986, but only with respect to--
        ``(A) a qualifying event described in section 162(k)(3)(F) of 
    the Internal Revenue Code of 1986 or section 603(6) of the Employee 
    Retirement Income Security Act of 1974 [29 U.S.C. 1163(6)], and
        ``(B) a qualifying event described in section 162(k)(3)(A) of 
    the Internal Revenue Code of 1986 or section 603(1) of the Employee 
    Retirement Income Security Act of 1974 [29 U.S.C. 1163(1)] relating 
    to the death of a retired employee occurring after the date of the 
    qualifying event described in subparagraph (A).
    ``(3) Treatment of current retirees.--Section 162(k)(3)(F) of the 
Internal Revenue Code of 1986 and section 603(6) of the Employee 
Retirement Income Security Act of 1974 [29 U.S.C. 1163(6)] apply to 
covered employees who retired before, on, or after the date of the 
enactment of this Act [Oct. 21, 1986].
    ``(4) Notice.--In the case of a qualifying event described in 
section 603(6) of the Employee Retirement Income Security Act of 1974 
[29 U.S.C. 1163(6)] that occurred before the date of the enactment of 
this Act [Oct. 21, 1986], the notice required under section 606(2) of 
such Act [29 U.S.C. 1166(2)] (and under section 162(k)(6)(B) of the 
Internal Revenue Code of 1986) with respect to such event shall be 
provided no later than 30 days after the date of the enactment of this 
Act [Oct. 21, 1986].''
    Amendment by Pub. L. 99-272 applicable to plan years beginning on or 
after July 1, 1986, with special rule for collective bargaining 
agreements, see section 10001(e) of Pub. L. 99-272, set out as a note 
under section 106 of this title.


                    Effective Date of 1984 Amendments

    Section 232(b) of Pub. L. 98-573 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after the date of the enactment of this Act [Oct. 30, 1984].''
    Amendment by section 512(b) of Pub. L. 98-369 applicable to amounts 
paid or incurred after July 18, 1984, in taxable years ending after such 
date, subject to an exception for certain extended vacation pay plans, 
see section 512(c) of Pub. L. 98-369, set out as a note under section 
404 of this title.
    Amendment by section 2354(d) of Pub. L. 98-369 effective July 18, 
1984, but not to be construed as changing or affecting any right, 
liability, status, or interpretation which existed (under the provisions 
of law involved) before that date, see section 2354(e) of Pub. L. 98-
369, set out as a note under section 1320a-1 of Title 42, The Public 
Health and Welfare.


                    Effective Date of 1982 Amendments

    Section 288(c) of Pub. L. 97-248 provided that: ``The amendments 
made by this section [amending this section and sections 952 and 964 of 
this title] shall apply to payments made after the date of the enactment 
of this Act [Sept. 3, 1982].''
    Amendment by section 128(b) of Pub. L. 97-248 effective as if such 
amendment had been originally included as part of this section as this 
section was amended by the Omnibus Budget Reconciliation Act of 1981, 
Pub. L. 97-35, see section 128(e)(2) of Pub. L. 97-248, set out as a 
note under section 1395x of Title 42, The Public Health and Welfare.
    Section 215(d) of Pub. L. 97-216 provided that: ``The amendments 
made by this section [amending this section and section 280A of this 
title and repealing provisions set out as a note under this section] 
shall apply to taxable years beginning after December 31, 1981.''


                    Effective Date of 1981 Amendments

    Section 139(b)(3) of Pub. L. 97-51, as amended by Pub. L. 97-92, 
Sec. 133a, Dec. 15, 1981, 95 Stat. 1199, provided that: ``The amendments 
made by this subsection [amending this section and repealing section 31c 
of Title 2, The Congress] shall apply to taxable years beginning after 
December 31, 1980.''
    Section 2146(c)(2) of Pub. L. 97-35 provided that: ``The amendments 
made by subsection (b) [amending this section] shall be effective with 
respect to taxable years beginning on or after January 1, 1982.''
    Section 127(b) of Pub. L. 97-34 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning on or after January 1, 1976.''


                    Effective Date of 1976 Amendment

    Amendment by section 1901(c)(4) of Pub. L. 94-455 applicable with 
respect to taxable years beginning after Dec. 31, 1976, see section 
1901(d) of Pub. L. 94-455, set out as a note under section 2 of this 
title.


                    Effective Date of 1971 Amendment

    Section 310(b) of Pub. L. 92-178 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply with respect 
to payments after December 30, 1969, except that section 162(c)(3) of 
the Internal Revenue Act of 1954 (as added by subsection (a)) shall 
apply only with respect to kickbacks, rebates, and bribes payment of 
which is made on or after the date of the enactment of this Act [Dec. 
10, 1971].''


                    Effective Date of 1969 Amendment

    Section 902(c) of Pub. L. 91-172, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``Section 162(f) 
of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by 
subsection (a)) shall apply to all taxable years to which such Code 
applies. Section 162(g) of such Code (as added by subsection (a)) shall 
apply with respect to amounts paid or incurred after December 31, 1969. 
Section 162(c)(1) of such Code (as amended by subsection (b)) shall 
apply to all taxable years to which such Code applies. Sections 
162(c)(2) and (3) of such Code (as amended by subsection (b)) shall 
apply with respect to payments made after the date of the enactment of 
this Act [Dec. 30, 1969].''
    Amendment by section 516(c)(2)(A) of Pub. L. 91-172 applicable to 
transfers after Dec. 31, 1969, see section 516(d)(3) of Pub. L. 91-172, 
set out as a note under section 1001 of this title.


                    Effective Date of 1962 Amendment

    Section 4(c) of Pub. L. 87-834 provided that: ``The amendments made 
by this section [amending this section and enacting section 274 of this 
title] shall apply with respect to taxable years ending after December 
31, 1962, but only in respect of periods after such date.''
    Section 3(b) of Pub. L. 87-834 provided that: ``The amendments made 
by this section [amending this section] shall apply to taxable years 
beginning after December 31, 1962.''


                    Effective Date of 1960 Amendment

    Section 7(c) of Pub. L. 86-779 provided that: ``The amendments made 
by subsections (a) and (b) [amending this section and section 170 of 
this title] shall apply with respect to taxable years beginning after 
December 31, 1959.''
    Section 8(d) of Pub. L. 86-779 provided that: ``The amendments made 
by subsections (a), (b), and (c) [amending this section and section 1054 
of this title and amending table of sections for Part IV by adding item 
1054 and numbering former item 1054 as 1055] shall apply with respect to 
taxable years beginning after December 31, 1959.''


                    Effective Date of 1958 Amendment

    Section 5(b) of Pub. L. 85-866 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply only with respect 
to expenses paid or incurred after the date of the enactment of this Act 
[Sept. 2, 1958]. The determination as to whether any expense paid or 
incurred on or before the date of the enactment of this Act shall be 
allowed as a deduction shall be made as if this section had not been 
enacted and without inference drawn from the fact that this section is 
not made applicable with respect to expenses paid or incurred on or 
before the date of the enactment of this Act.''


                    Deduction for Special Assessments

    Pub. L. 104-208, div. A, title II, Sec. 2711, Sept. 30, 1996, 110 
Stat. 3009-498, provided that, for purposes of subtitle A of this title, 
the amount allowed as a deduction under this section for a taxable year 
would include any amount paid during that year by reason of an 
assessment under section 2702 of Pub. L. 104-208, set out as a note 
under section 1817 of Title 12, Banks and Banking, and that section 
172(f) of this title would not apply to that deduction.


  Special Rule for Deductions Under Subsection (l) for Certain Taxable 
                                  Years

    Section 110(a)(2) of Pub. L. 102-227 provided that, in the case of 
any taxable year beginning in 1992 only amounts paid before July 1, 
1992, by the individual for insurance coverage for periods before July 
1, 1992, would be taken into account in determining the amount 
deductible under subsec. (l) of this section with respect to such 
individual for such taxable year, and that for purposes of subparagraph 
(A) of subsec. (l)(2) of this section, the amount of the earned income 
described in such subparagraph taken into account for such taxable year 
would be the amount which bears the same ratio to the total amount of 
such earned income as the number of months in such taxable year ending 
before July 1, 1992, bears to the number of months in such taxable year, 
prior to repeal by Pub. L. 103-66, title XIII, Sec. 13174(a)(2), Aug. 
10, 1993, 107 Stat. 457.
    Section 7107(a)(2) of Pub. L. 101-239 provided that, in the case of 
any taxable year beginning in 1990 only amounts paid before Oct. 1, 
1990, by the individual for insurance coverage for periods before Oct. 
1, 1990, would be taken into account in determining the amount 
deductible under subsec. (l) of this section with respect to such 
individual for such taxable year, and that for purposes of subsec. 
(l)(2)(A) of this section, the amount of the earned income described in 
such paragraph taken into account for such taxable year would be the 
amount which bears the same ratio to the total amount of such earned 
income as the number of months in such taxable year ending before Oct. 
1, 1990, bears to the number of months in such taxable year, prior to 
repeal by Pub. L. 101-508, title XI, Sec. 11410(b), Nov. 5, 1990, 104 
Stat. 1388-479.


           Business Use of Automobiles by Rural Mail Carriers

    Section 6008 of Pub. L. 100-647 provided that in the case of any 
employee of the United States Postal Service who performed services 
involving the collection and delivery of mail on a rural route, such 
employee was permitted to compute the amount allowable as a deduction 
under this chapter for the use of an automobile in performing such 
services by using a standard mileage rate for all miles of such use 
equal to 150 percent of the basic standard rate, prior to repeal by Pub. 
L. 105-34, title XII, Sec. 1203(b), Aug. 5, 1997, 111 Stat. 995. See 
subsec. (o) of this section.


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of this 
title.


 Living Expenses of Members of Congress While Away From Home; Sense of 
                                Congress

    Section 139(a) of Pub. L. 97-51, which expressed the sense of 
Congress that the dollar limits on tax deductions for living expenses of 
Members of Congress while away from home be the same as such limits for 
businessmen and other private citizens, was repealed by Pub. L. 97-216, 
title II, Sec. 215(c), July 18, 1982, 96 Stat. 194.


            State Legislators' Travel Expenses Away From Home

    Section 604 of Pub. L. 94-455, as amended by Pub. L. 95-30, title 
III, Sec. 307, May 23, 1977, 91 Stat. 153; Pub. L. 95-258, Sec. 2, Apr. 
7, 1978, 92 Stat. 195; Pub. L. 96-167, Sec. 3, Dec. 29, 1979, 93 Stat. 
1275; Pub. L. 96-178, Sec. 1, Jan. 2, 1980, 93 Stat. 1295; Pub. L. 99-
514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ``(a) In General.--For purposes of section 162(a) of the Internal 
Revenue Code of 1986 [formerly I.R.C. 1954], in the case of any 
individual who was a State legislator at any time during any taxable 
year beginning before January 1, 1981, and who, for the taxable year, 
elects the application of this section, for any period during such a 
taxable year in which he was a State legislator--
        ``(1) the place of residence of such individual within the 
    legislative district which he represented shall be considered his 
    home, and
        ``(2) he shall be deemed to have expended for living expenses 
    (in connection with his trade or business as a legislator) an amount 
    equal to the sum of the amounts determined by multiplying each 
    legislative day of such individual during the taxable year by the 
    amount generally allowable with respect to such day to employees of 
    the executive branch of the Federal Government for per diem while 
    away from home but serving in the United States.
    ``(b) Legislative Days.--For purposes of subsection (a), a 
legislative day during any taxable year for any individual shall be any 
day during such year on which (1) the legislature was in session 
(including any day in which the legislature was not in session for a 
period of 4 consecutive days or less), or (2) the legislature was not in 
session but the physical presence of the individual was formally 
recorded at a meeting of a committee of such legislature.
    ``(c) Limitation.--The amount taken into account as living expenses 
attributable to a trade or business as a State legislator for any 
taxable year beginning before January 1, 1976, under an election made 
under this section shall not exceed the amount claimed for such purpose 
under a return (or amended return) filed before May 21, 1976.
    ``(d) Making and Effect of Election.--An election under this section 
shall be made at such time and in such manner as the Secretary of the 
Treasury or his delegate shall by regulations prescribe.''
    [Amendment by section 604 of Pub. L. 94-455 by section 1 of Pub. L. 
96-178, which purported to substitute ``January 1, 1979'' for ``January 
1, 1978'', was not executed because of the prior amendment by section 
3(a)(2), (b) of Pub. L. 96-167 which substituted ``January 1, 1981'' for 
``January 1, 1978'' in subsec. (a) and which struck out the last 
sentence of subsec. (d).]


 Denial of Deduction for Amounts Paid or Incurred on Judgments in Suits 
    Brought To Recover Price Increases in Purchase of New Principal 
                                Residence

    No deductions to be allowed in computing taxable income for two-
thirds of any amount paid or incurred on a judgment entered against any 
person in a suit brought under section 208(b) of Pub. L. 94-12, see 
section 208(c) of Pub. L. 94-12, title II, Mar. 29, 1975, 89 Stat. 35, 
set out as a note under section 44 of this title.


                  Deductibility of Accrued Vacation Pay

    Section 97 of Pub. L. 85-866, as amended by Pub. L. 86-496, Sec. 2, 
June 8, 1960, 74 Stat. 164; Pub. L. 88-153, Oct. 17, 1963, 77 Stat. 272; 
Pub. L. 88-554, Sec. 1, Aug. 31, 1964, 78 Stat. 761; Pub. L. 89-692, 
Oct. 15, 1966, 80 Stat. 1025; Pub. L. 91-172, title IX, Sec. 903, Dec. 
30, 1969, 83 Stat. 711; Pub. L. 92-580, Sec. 3, Oct. 27, 1972, 86 Stat. 
1276, provided that deductions for accrued vacation pay under this 
section would not be denied for any taxable year ending before Jan. 1, 
1973, so long as the employee at the time of accrual of pay has 
performed the necessary qualifying service under an appropriate plan.


Investigation of, and Reports on, Treatment of Entertainment and Certain 
                             Other Expenses

    Pub. L. 86-564, title III, Sec. 301, June 30, 1960, 74 Stat. 291, 
authorized the Joint Committee on Internal Revenue Taxation to 
investigate and report on the use of entertainment and certain other 
expense deductions to the 87th Congress and authorized the Secretary of 
the Treasury to report to the 87th Congress on the enforcement program 
of the Internal Revenue Service relating to such deductions.


              Filing of Claims for Refunds of Overpayments

    Extension of time for filing of claims for refunds or credit of 
overpayments of income tax resulting from application of this section, 
see section 96 of Pub. L. 85-866, set out as a note under section 6511 
of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 62, 67, 83, 127, 132, 170, 
172, 179, 192, 263, 274, 280A, 404, 421, 465, 527, 542, 543, 545, 556, 
691, 707, 832, 911, 941, 952, 964, 988, 995, 1054, 1253, 1402, 6033 of 
this title; title 2 section 1610; title 15 section 78kkk; title 42 
sections 300bb-8, 403, 411.
