To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes.

Summary: Tax Revision Act of 2005 - Amends the Internal Revenue Code to extend through 2006: (1) the taxpayer election to include combat zone compensation as earned income for purposes of computing the earned income tax credit; (2) the increased cover over (payment) to the Treasuries of Puerto Rico and the Virgin Islands of distilled spirit excise tax revenues; (3) the authority for certain Internal Revenue Service (IRS) undercover investigative operations; and (4) the authority for disclosure of tax return information for combined employment tax reporting, for combating terrorist activities, and for student loan repayment.

Allows, through 2006, the tax deduction for income attributable to domestic production activities for taxpayers with income from sources in Puerto Rico.

Amends the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (CAFTA-DR) to revise formulae for determining the regional value-content of certain import/export goods.

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Tax Revision Act 
of 2005''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Election to include combat pay as earned income for purposes of 
                            earned income credit.
Sec. 3. Cover over of tax on distilled spirits.
Sec. 4. Authority for undercover operations.
Sec. 5. Disclosures of certain tax return information.
Sec. 6. Deduction allowable with respect to income attributable to 
                            domestic production activities in Puerto 
                            Rico.
Sec. 7. Technical corrections to regional value-content methods for 
                            rules of origin under Public Law 109-53.

SEC. 2. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR PURPOSES OF 
              EARNED INCOME CREDIT.

    (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) is 
amended by striking ``January 1, 2006'' and inserting ``January 1, 
2007''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2005.

SEC. 3. COVER OVER OF TAX ON DISTILLED SPIRITS.

    (a) In General.--Paragraph (1) of section 7652(f) (relating to 
limitation on cover over of tax on distilled spirits) is amended by 
striking ``January 1, 2006'' and inserting ``January 1, 2007''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to articles brought into the United States after December 31, 
2005.

SEC. 4. AUTHORITY FOR UNDERCOVER OPERATIONS.

    Paragraph (6) of section 7608(c) (relating to application of 
section) is amended by striking ``January 1, 2006'' both places is 
appears and inserting ``January 1, 2007''.

SEC. 5. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION.

    (a) Disclosures to Facilitate Combined Employment Tax Reporting.--
            (1) In general.--Subparagraph (B) of section 6103(d)(5) 
        (relating to termination) is amended by striking ``December 31, 
        2005'' and inserting ``December 31, 2006''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to disclosures after December 31, 2005.
    (b) Disclosures Relating to Terrorist Activities.--
            (1) In general.--Clause (iv) of section 6103(i)(3)(C) and 
        subparagraph (E) of section 6103(i)(7) are each amended by 
        striking ``December 31, 2005'' and inserting ``December 31, 
        2006''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to disclosures after December 31, 2005.
    (c) Disclosures Relating to Student Loans.--
            (1) In general.--Subparagraph (D) of section 6103(l)(13) 
        (relating to termination) is amended by striking ``December 31, 
        2005'' and inserting ``December 31, 2006''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to requests made after December 31, 2005.

SEC. 6. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO 
              DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.

    (a) In General.--Subsection (d) of section 199 (relating to 
definitions and special rules) is amended by redesignating paragraph 
(7) as paragraph (8) and by inserting after paragraph (6) the following 
new paragraph:
            ``(7) Treatment of activities in puerto rico.--
                    ``(A) In general.--In the case of any taxpayer with 
                gross receipts for any taxable year from sources within 
                the Commonwealth of Puerto Rico, if all of such 
                receipts are taxable under section 1 or 11 for such 
                taxable year, then for purposes of determining the 
                domestic production gross receipts of such taxpayer for 
                such taxable year under subsection (c)(4), the term 
                `United States' shall include the Commonwealth of 
                Puerto Rico.
                    ``(B) Termination.--Subparagraph (A) shall not 
                apply to any taxable year beginning after December 31, 
                2006.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to taxable years beginning after December 31, 2005.

SEC. 7. TECHNICAL CORRECTIONS TO REGIONAL VALUE-CONTENT METHODS FOR 
              RULES OF ORIGIN UNDER PUBLIC LAW 109-53.

    Section 203(c) of the Dominican Republic-Central America-United 
States Free Trade Agreement Implementation Act (Public Law 109-53; 19 
U.S.C. 4033(c)) is amended as follows:
            (1) In paragraph (2)(A), by striking all that follows ``the 
        following build-down method:'' and inserting the following:

                                       av-vnm

                         ``rvc = -------- &lt;greek-e&gt; 100''.

                                         av

            (2) In paragraph (3)(A), by striking all that follows ``the 
        following build-up method:'' and inserting the following:

                                        vom

                          ``rvc = -------- &lt;greek-e&gt; 100''.

                                         av

            (3) In paragraph (4)(A), by striking all that follows ``the 
        following net cost method:'' and inserting the following:

                                       nc-vnm

                         ``rvc = -------- &lt;greek-e&gt; 100''.

                                         nc

            Passed the House of Representatives December 7, 2005.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.