Congressman Ron Paul Introduces Evacuees Tax Relief Act

With hurricane season upon us, Congressman Ron Paul yesterday introduced the Evacuees Tax Relief Act of 2009 [HR 2953] which would provide tax relief to those forced to abandon their homes because of a natural disaster.

Relief would come in the form of a tax credit or deduction, depending on the wishes of the taxpayer, up to $5,000 for costs incurred because of a government-ordered mandatory or voluntary evacuation.

The legislation, if passed, would be retroactive to December of 2007, affecting evacuees of Hurricanes Ike, Gustav, and Dolly.

“I have firsthand experience with the burdens faced by those forced to uproot themselves and their families because of a natural disaster. Evacuees incur great costs in getting to safety, as well as loss from the storm damage. It can take many months, even years, to fully recover. The Evacuees Tax Relief Act helps Americans manage the fiscal costs of natural disasters,” stated Congressman Paul.

The text of the bill is displayed below.

111th CONGRESS

1st Session

H. R. 2953

To amend the Internal Revenue Code of 1986 to allow individuals either a credit against income tax or a deduction for expenses paid or incurred by reason of a voluntary or mandatory evacuation.

IN THE HOUSE OF REPRESENTATIVES

June 18, 2009

Mr. PAUL introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow individuals either a credit against income tax or a deduction for expenses paid or incurred by reason of a voluntary or mandatory evacuation.

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 `Evacuees Tax Relief Act of 2009′.

SEC. 2. EVACUATION EXPENSES.

(a) Credit for Evacuation Expenses- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:

`SEC. 25E. EVACUATION EXPENSES.

`(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified evacuation expenses paid or incurred by the individual during the taxable year.

`(b) Dollar Limitation- With respect to an individual, the aggregate amount of qualified evacuation expenses which may be taken into account under subsection (a) for all taxable years during the credit allowance period shall not exceed $5,000.

`(c) Qualified Evacuation Expenses- For purposes of this section–

`(1) IN GENERAL- The term `qualified evacuation expenses’ means, with respect to any taxable year during the credit allowance period, the sum of all expenses paid or incurred by the individual during such taxable year by reason of a qualified evacuation. Such expenses shall include travel and lodging expenses as do not exceed $1,000, lost wages, and any property damage not compensated for by insurance or otherwise.

`(2) QUALIFIED EVACUATION- With respect to an individual, the term `qualified evacuation’ means a voluntary or mandatory evacuation ordered by reason of a qualified disaster (as defined in section 139(c)) of an area in which such individual resides on the date of such disaster.

`(3) CREDIT ALLOWANCE PERIOD- With respect to a qualified evacuation, the term `credit allowance period’ means the taxable year or years during which the evacuation occurred and each of the 3 succeeding taxable years.

`(d) Portion of Credit Refundable-

`(1) IN GENERAL- The aggregate credits allowed to an individual under subpart C shall be increased by the lesser of–

`(A) the credit which would be allowed under this section without regard to this subsection, or

`(B) the amount by which the aggregate amount of credits allowed by this subpart (determined without regard to this subsection) would increase if the limitation imposed by section 26(a) were increased by the individual’s social security taxes for the taxable year.

The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a).

`(2) SOCIAL SECURITY TAXES- For purposes of paragraph (1)–

`(A) IN GENERAL- The term `social security taxes’ means, with respect to any taxpayer for any taxable year–

`(i) the amount of the taxes imposed by section 3101 and 3201(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins,

`(ii) 50 percent of the taxes imposed by section 1401 on the self-employment income of the taxpayer for the taxable year, and

`(iii) 50 percent of the taxes imposed by section 3211(a)(1) on amounts received by the taxpayer during the calendar year in which the taxable year begins.

`(B) COORDINATION WITH SPECIAL REFUND OF SOCIAL SECURITY TAXES- The term `social security taxes’ shall not include any taxes to the extent the taxpayer is entitled to a special refund of such taxes under section 6413(c).

`(C) SPECIAL RULE- Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph (A)(i) shall be treated as taxes referred to in such paragraph.

`(e) Denial of Double Benefit- No credit shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter.

`(f) Election Not To Have Section Apply- An individual may elect not to have this section apply with respect to the qualified evacuation expenses of the individual for any taxable year.’.

(b) Deduction for Evacuation Expenses-

(1) IN GENERAL- Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

`SEC. 224. DEDUCTION FOR EVACUATION EXPENSES.

`(a) Allowance of Deduction- In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified evacuation expenses paid or incurred by the individual during the taxable year.

`(b) Dollar Limitation- With respect to an individual, the aggregate amount of qualified evacuation expenses which may be taken into account under subsection (a) for all taxable years during the deduction allowance period shall not exceed $5,000.

`(c) Qualified Evacuation Expenses- For purposes of this section–

`(1) IN GENERAL- The term `qualified evacuation expenses’ means, with respect to any taxable year during the deduction allowance period, the sum of all expenses paid or incurred by the individual during such taxable year by reason of a qualified evacuation. Such expenses shall include travel and lodging expenses as do not exceed $1,000, lost wages, and any property damage not compensated for by insurance or otherwise.

`(2) QUALIFIED EVACUATION- With respect to an individual, the term `qualified evacuation’ means a voluntary or mandatory evacuation ordered by reason of a qualified disaster (as defined in section 139(c)) of an area in which such individual resides on the date of such disaster.

`(3) DEDUCTION ALLOWANCE PERIOD- With respect to a qualified evacuation, the term `deduction allowance period’ means the taxable year or years during which the evacuation occurred and each of the 3 succeeding taxable years.

`(d) Denial of Double Benefit- No deduction shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter.

`(e) Election Not To Have Section Apply- An individual may elect not to have this section apply with respect to the qualified evacuation expenses of the individual for any taxable year.’.

(2) DEDUCTION ALLOWED WHETHER OR NOT INDIVIDUAL ITEMIZES OTHER DEDUCTIONS- Subsection (a) of section 62 of such Code is amended by inserting after paragraph (21) the following new paragraph:

`(22) DEDUCTION FOR EVACUATION EXPENSES- The deduction allowed by section 224.’.

(c) Clerical Amendments-

(1) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item:

`Sec. 25E. Evacuation expenses.’.

(2) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items:

`Sec. 224. Deduction for evacuation expenses.

`Sec. 225. Cross reference.’.

(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

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