Internal Revenue Code:Sec. 162. Trade or business expenses

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Contents


Location in Internal Revenue Code


     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
       

Statute

    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:
 
    ---------------------------------------------------------------------
    For taxable years beginning in     The applicable percentage is -
     calendar year -
    ---------------------------------------------------------------------
     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.
        (G) Coordination with excise tax on specified 
           stock compensation.--The dollar limitation contained in 
           paragraph (1) with respect to any covered employee shall 
           be reduced (but not below zero) by the amount of any 
           payment (with respect to such employee) of the tax 
           imposed by section 4985 directly or indirectly by the 
           expatriated corporation (as defined in such section) or 
           by any member of the expanded affiliated group (as 
           defined in such section) which includes such corporation.

    (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 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) Special rule where expenses exceed reimbursements.--
        Notwithstanding paragraph (1)(A), if the expenses incurred by an 
        employee for the use of a vehicle in performing services 
        described in paragraph (1) exceed the qualified reimbursements 
        for such expenses, such excess shall be taken into account in 
        computing the miscellaneous itemized deductions of the employee 
        under section 67.

      (3) 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) Treatment of Expenses of Members of Reserve Component of Armed 
      Forces of the United States.--For purposes of subsection (a)(2),
     in the case of an individual who performs services as a member 
     of a reserve component of the Armed Forces of the United States 
     at any time during the taxable year, such individual shall be
     deemed to be away from home in the pursuit of a trade or 
     business for any period during which such individual is
     away from home in connection with such service.
    (q) 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.
 

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    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, Sec.
    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, Sec. 7107(a)(1),
    (b), 7862(c)(3)(A), Dec. 19, 1989, 103 Stat. 2233, 2306, 2432; Pub.
    L. 101-508, title XI, Sec. 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,
    Sec. 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, Sec. 311(a), 322(b)(2)(B), Aug.
    21, 1996, 110 Stat. 2053, 2060; Pub. L. 105-34, title IX, Sec.
    934(a), title XII, Sec. 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

                             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.
 

Miscellaneous

                                 AMENDMENTS

    2004 - Pub. L. 108-357, Sec. 802(b)(2). Paragraph (4) of
    section 162(m) is amended by adding at the end the following
    new subparagraph: "(G) Coordination with excise tax on specified 
    stock compensation."

      2004 - Pub. L. 108-357, Sec. 318.  Section 162(o) (relating
      to treatment of certain reimbursed expenses of rural mail carriers)
      is amended by redesignating paragraph (2) as paragraph (3) and by
      inserting after paragraph (1) the new paragraph (2).
      Conforming Amendment.--The heading for section 162(o) is amended
      by striking ``Reimbursed''.
      Effective Date.--The amendments made by this section shall apply
      to taxable years beginning after December 31, 2003.
 
      2003 - Subsec. 109(a), Pub. L. 108-121, amended Sec. 162
    by changing (p) to (q) and adding a new (p).
      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:
 
    ---------------------------------------------------------------------
    ''For taxable years beginning in   The applicable percentage is -
     calendar year -
    ---------------------------------------------------------------------
     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:
 
    ---------------------------------------------------------------------
    ''For taxable years beginning in   The applicable percentage is -
     calendar year -
    ---------------------------------------------------------------------
     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, Sec. 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 2005 AMENDMENTS
      S.A.F.E. Transportation Equity Act of 2005; Sec. 5509;
    Effective Date- The amendment made by this section shall apply
    to amounts paid or incurred on or after the date of the
    enactment of this Act, except that such amendment shall not
    apply to amounts paid or incurred under any binding order or
    agreement entered into before such date. Such exception shall
    not apply to an order or agreement requiring court approval
    unless the approval was obtained before such date; Sec.5513
    amendments shall apply to damages paid or incurred on or after
    the date of the enactment of this Act.
                     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 (Sec. 1101-1147 and 1171-1177) or title
    XVIII (Sec. 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.
 

References

                   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.
 

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