PPLI Abuse Act

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [S. 4279 Introduced in Senate (IS)] <DOC> 119th CONGRESS 2d Session S. 4279 To amend the Internal Revenue Code of 1986 to prevent the abuse of life insurance tax rules, and for other purposes. _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES April 13, 2026 Mr. Wyden 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 prevent the abuse of life insurance tax rules, 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 ``Protecting Proper Life Insurance from Abuse Act'' or the ``PPLI Abuse Act''. SEC. 2. TAX TREATMENT OF PRIVATE PLACEMENT CONTRACTS. (a) In General.--Chapter 79 of the Internal Revenue Code of 1986 is amended by inserting after section 7702B the following new section: ``SEC. 7702C. TREATMENT OF APPLICABLE PRIVATE PLACEMENT CONTRACTS. ``(a) General Rule.--Notwithstanding any other provision of this title, an applicable private placement contract shall not be treated as an insurance or annuity contract for purposes of this title. ``(b) Applicable Private Placement Contract.--For purposes of this section-- ``(1) In general.--The term `applicable private placement contract' means any private placement contract if the requirements of subsection (c) are not met with respect to any segregated asset account described in section 817(d) to which amounts received under such contract are allocated. ``(2) Private placement contract.--The term `private placement contract' means any contract-- ``(A) which, without regard to this section, would be treated for purposes of this title as-- ``(i) a life insurance contract under section 7702