Overview
Title
To amend the Internal Revenue Code of 1986 to exclude from gross income any damages, other than punitive damages, received on account of any sexual acts or sexual contact.
ELI5 AI
H.R. 2347 says that if a person gets money because someone hurt them in a bad way, like touching when they shouldn’t, they don’t have to pay taxes on that money, but they still have to pay taxes if the money is meant to punish the person who did it.
Summary AI
H.R. 2347, known as the “Survivor Justice Tax Prevention Act,” proposes changes to the Internal Revenue Code to allow individuals to exclude from their gross income any damages received due to sexual acts or contact, excluding punitive damages. The bill amends Section 104(a)(2) to include damages related to sexual acts or contact as non-taxable, like those for physical injuries or sickness. It also prevents requiring medical records as a condition to substantiate such claims and mandates a public awareness program on this income exclusion by the Treasury Department. The changes would apply to judgments and agreements made after the law’s enactment.
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AnalysisAI
Summary of the Bill
H.R. 2347, titled the "Survivor Justice Tax Prevention Act," aims to amend the Internal Revenue Code of 1986. It seeks to exclude from taxable income any damages awarded due to sexual acts or sexual contact, except for punitive damages. The bill also stipulates that courts can classify damages as related to sexual acts or contact without requiring medical records. Additionally, it mandates the promotion of public awareness regarding this tax exclusion by the Treasury Department in collaboration with other federal agencies.
Significant Issues
The bill has several significant issues that need to be addressed to understand its full implications. Firstly, it relies on definitions from another section of the U.S. Code, which may introduce ambiguity if those definitions change or lack clarity. Furthermore, there is no specific mention of whether other non-compensatory damages, like those for emotional distress, are included or excluded from the tax exemption—a factor that could lead to potential confusion and legal disputes. Additionally, the bill does not specify what resources or budget will be allocated to promote this tax exclusion, raising concerns about the effectiveness of such an initiative. Another point of contention is the lack of clarity on what constitutes adequate substantiation for claiming these damages, aside from not requiring medical records. Lastly, the bill does not address the tax implications for damages related to other forms of discrimination or harassment, which might lead to perceptions of inequality.
Impact on the Public
Broadly speaking, the bill could provide significant relief to individuals receiving damages from cases of sexual acts or sexual contact by reducing their tax liabilities. This financial relief can make a substantive difference for survivors dealing with the aftermath of such traumatic experiences, potentially lessening the economic burden and aiding in their recovery process. However, without clear guidelines and public awareness, the beneficiaries of this provision may not fully capitalize on its potential advantages.
Impact on Specific Stakeholders
For survivors of sexual violence, this bill presents a potential positive development. By excluding certain damages from taxable income, survivors may retain more of their financial resources awarded through legal settlements or judgments, aiding them in physical and psychological recovery. Legal professionals and tax advisors may also see changes; they'll need to adapt their practices and advice to incorporate these new tax exclusions.
On the other hand, while the bill is designed to benefit survivors of sexual acts or contact, other victims of discrimination or harassment might see its provisions as inequitable, leading to frustration and calls for broader tax reform in similar contexts. Meanwhile, the implementation agencies, like the Treasury Department, face challenges in effectively promoting and managing this exclusion without a clear allocation of resources, potentially limiting the bill's positive outcomes.
Issues
The amendment to Section 104(a)(2) relies on definitions of 'sexual act' and 'sexual contact' from another section of U.S. Code, which might lead to ambiguity if those definitions change or are not well understood. (SEC. 2)
The bill does not clarify whether other forms of non-compensatory damages, such as emotional distress damages, are excluded or included, leading to potential confusion and legal disputes. (SEC. 2)
There is no provision specifying the resources or budget allocated for promoting public awareness of the new tax exclusion, which raises concerns about the effectiveness of this initiative. (SEC. 2)
The lack of specification on what constitutes adequate substantiation beyond the absence of a medical records requirement may lead to inconsistent legal interpretations and disputes. (SEC. 2)
The bill does not address the tax implications for damages related to other forms of discrimination or harassment, which could be perceived as providing inequitable treatment compared to those related to sexual acts or contact. (SEC. 2)
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill specifies its short title, which is the "Survivor Justice Tax Prevention Act".
2. Exclusion from gross income of any damages, other than punitive damages, received on account of sexual acts or sexual contact Read Opens in new tab
Summary AI
The section amends the tax code to exclude from gross income any damages received due to sexual acts or contact, except for punitive damages. It also ensures that these damages can be classified as such without needing medical records, and makes sure awareness of this tax exclusion is promoted by the Treasury in collaboration with other agencies.