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Internal Revenue Code of 1986

The official collection of tax laws in the United States.

Denial of Deduction

A rule that prevents a business from subtracting certain expenses from its taxable income, meaning those expenses cannot lower its tax bill.

Excessive Employee Remuneration

High pay, bonuses, or other compensation given to an employee that exceeds a certain limit set by tax law for deduction purposes.

Taxable year

The 12-month period (usually a calendar year) that an individual or company uses to calculate its income and file taxes.

Publicly Held Corporation

A company whose ownership is distributed among general public shareholders through public stock exchanges.

Covered individual

Under this bill, an expanded group of high-paid people within a company, including any individual performing services for the company, and certain former top executives, whose compensation is subject to tax deduction limits.

Pass-through entity

A business structure (like a partnership or LLC) that avoids corporate income taxes because its income or losses are directly passed through to the owners' personal tax returns.