A bill to amend the Internal Revenue Code of 1986 to impose an excise tax on amounts received under certain insurance policies in which certain exempt organizations hold an interest.

This bill, introduced by Senator Chuck Grassley, aims to prevent tax-exempt organizations from participating in "investor-initiated" life insurance arrangements where the organization essentially sells its tax-exempt status to private investors. It would impose a 100% excise tax on the costs associated with acquiring interests in life insurance, annuity, or endowment contracts when a tax-exempt entity is involved in a way that benefits outside investors rather than its own charitable mission.

For the average citizen, this legislation is designed to ensure that life insurance remains a tool for personal financial security and legitimate charitable giving rather than a vehicle for complex tax-avoidance schemes. By closing these loopholes, the bill seeks to protect the integrity of the tax-exempt sector and ensure that tax benefits intended for charities are not diverted to private investment groups.