Senate Finance Committee leaders Chuck Grassley, R-Iowa, and Max Baucus, D-Mont., will introduce legislation early next week to crack down on life insurance contract abuses that inappropriately afford benefits to private investors that would not otherwise be available without the involvement of a charity.

The legislation builds on a Bush administration budget proposal that sought to deal with these types of insurance contracts.

The bill would impose a 100 percent excise tax on persons acquiring an interest in such contracts, and would have an effective date of May 3, with a reporting requirement to allow the Internal Revenue Service to examine previous deals to determine their compliance with current law.

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