What does Preamble of PPLI Abuse Act do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to prevent the abuse of life insurance tax rules, and for other purposes,' aims to modify the Internal Revenue Code of 1986.

What does SHORT TITLE. of PPLI Abuse Act do?

This Act is formally titled the Protecting Proper Life Insurance from Abuse Act.

What does TAX TREATMENT OF PRIVATE PLACEMENT CONTRACTS. of PPLI Abuse Act do?

This section amends the Internal Revenue Code of 1986 to add a new section 7702C, which provides rules for the tax treatment of applicable private placement contracts. An applicable private placement contract is not treated as an insurance or annuity contract for tax purposes. The section defines applicable private placement contracts and provides rules for their tax treatment, including the treatment of assets and income. The section also provides rules for the tax treatment of holders of contracts, including the inclusion of excess distributions in gross income. The section applies to contracts issued before, on, or after the date of enactment, with a transition rule for certain contracts issued on or before the date of enactment.

What does REPORTING REQUIREMENTS. of PPLI Abuse Act do?

This section amends the Internal Revenue Code of 1986 to add new reporting requirements for applicable private placement contracts. Reporting issuers must file an initial return and annual returns with the Secretary, including specific information about the contracts and their holders. The section also imposes penalties for failure to file returns or provide required statements, with amounts determined by the Secretary. The amendments relate to foreign account tax compliance, treating insurance companies as financial institutions and private placement contracts as financial accounts. The effective date for the amendments is 1 year after the date of enactment for certain payments.

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PPLI Abuse Act

Last updated: 4/13/2026 · Introduced: 4/13/2026

Author: Ron Wyden (D-OR)

TL;DR (AI)

This bill modifies the Internal Revenue Code to establish rules for the tax treatment of 'applicable private placement contracts,' defining them and specifying how assets, income, and distributions are taxed.
The bill mandates new reporting requirements for issuers of applicable private placement contracts, requiring them to file initial and annual returns with the IRS and imposing penalties for non-compliance.
Issuers of these contracts will be subject to foreign account tax compliance reporting, treating insurance companies as financial institutions and contracts as financial accounts.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

4 sections

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