Section 1 Short title
This Act may be cited as the “Settlement Tax Deductions are Over for Predators Act” or the “STOP Act”.
Settlement Tax Deductions are Over for Predators Act
A BILL
To amend the Internal Revenue Code of 1986 to deny as a trade or business expense deduction amounts paid or incurred in connection with the settlement of a sexual harassment or sexual assault claim.
Sec. 2 Denial of deduction for sexual harassment settlements
In general— Section 162(f) is amended—
by striking “and penalties” and all that follows through “under subsection (a) for any fine” and inserting the following:
“(1) Any fine”
by adding at the end the following new paragraph:
“(2) Any amount paid or incurred on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) originating from, or to require the non-disclosure of or otherwise prevent, a claim or accusation of—
“(A) that which would constitute an offense under chapter 109A of title 18, United States Code, or
“(B) sexual harassment (including unwelcome sexual advances, requests for sexual favors, or other verbal or physical harassment of a sexual nature).”
Effective date— The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.