119-s1576

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1576 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1576

 To amend the Internal Revenue Code of 1986 to expand the denial of 
 deduction for certain excessive employee remuneration, and for other 
 purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 May 1, 2025

 Mr. Reed (for himself, Mr. Blumenthal, Ms. Baldwin, Ms. Warren, Mr. 
 Merkley, Mr. Van Hollen, Mr. Sanders, and Mr. Whitehouse) introduced 
the following bill; which was read twice and referred to the Committee 
 on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to expand the denial of 
 deduction for certain excessive employee remuneration, and for other 
 purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Stop Subsidizing Multimillion Dollar 
Corporate Bonuses Act''.

SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CERTAIN EXCESSIVE EMPLOYEE 
 REMUNERATION.

    (a) In General.--

    (1) Expansion.--

Section 162
            (m) of the Internal Revenue Code 
 of 1986 is amended--
        (A) by striking ``applicable employee 
 remuneration'' each place it appears in paragraphs

    (1) ,

    (4) , and

    (5)
        (E) and inserting ``applicable 
 remuneration'',
        (B) by striking ``covered employee'' each place it 
 appears in paragraphs

    (1) and

    (4) and inserting 
 ``covered individual'', and
            (C) by striking ``employee'' each place it appears 
 in paragraph

    (1) and subparagraphs
        (A) ,
            (C) 
            (ii) , and
        (E) of paragraph

    (4) and inserting ``individual''.

    (2) Covered individual.--Paragraph

    (3) of 

section 162
            (m) of 
 such Code is amended to read as follows:
 ``

    (3) Covered individual.--For purposes of this subsection, 
 the term `covered individual' means--
 ``
        (A) any individual who performs services 
 (directly or indirectly) for the taxpayer (or any 
 predecessor) for any taxable year beginning after 
 December 31, 2024, or
 ``
        (B) any employee--
 ``
            (i) who was the principal executive 
 officer or principal financial officer of the 
 taxpayer (or any predecessor) at any time 
 during any preceding taxable year beginning 
 after December 31, 2016, and before January 1, 
 2025, or who was an individual acting in such a 
 capacity, or
 ``
            (ii) the total compensation of whom for 
 any taxable year described in clause
            (i) was 
 required to be reported to shareholders under 
 the Securities Exchange Act of 1934 by reason 
 of such individual being among the 3 highest 
 compensated officers for the taxable year 
 (other than any individual described in clause
            (i) ).
 Such term shall include any employee who would be described in 
 subparagraph
        (B)
            (ii) if the reporting described in such 
 subparagraph were required as so described.''.

    (3) Conforming amendments.--
        (A) The heading for 

section 162
            (m) of the Internal 
 Revenue Code of 1986 is amended by striking 
 ``Employee''.
        (B) The heading for 

section 162
            (m) (4) is amended by 
 striking ``employee''.

    (b) Modification of Definition of Publicly Held Corporation.--

Section 162
            (m) (2) of the Internal Revenue Code of 1986 is amended--

    (1) by inserting ``, with respect to any taxable year,'' 
 after ``means'', and

    (2) by striking subparagraph
        (B) and inserting the 
 following:
 ``
        (B) that was required to file reports under 
 

section 15
            (d) of such Act (15 U.S.C. 78o
            (d) ) at any 
 time during the 3-taxable year period ending with such 
 taxable year.''.
            (c) Regulatory Authority.--

    (1) In general.--

Section 162
            (m) of the Internal Revenue 
 Code of 1986 is amended by adding at the end the following new 
 paragraph:
 ``

    (7) Regulations.--The Secretary may prescribe such 
 guidance, rules, or regulations as are necessary to carry out 
 the purposes of this subsection, including regulations--
 ``
        (A) with respect to reporting, and
 ``
        (B) to prevent avoidance of the purposes of this 
 section by providing compensation through a pass-
 through or other entity.''.

    (2) Conforming amendment.--Paragraph

    (6) of 

section 162
            (m) of such Code is amended by striking subparagraph
        (H) .
            (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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