II 

109TH CONGRESS 

2D SESSION S. 2414 

To amend the Internal Revenue Code of 1986 to require broker reporting 

of customer’s basis in securities transactions, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 14, 2006 

Mr. BAYH (for himself, Mr. OBAMA, Mr. CARPER, and Mr. KERRY) 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 require 

broker reporting of customer’s basis in securities transactions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Simplification Through 

5 Additional Reporting Tax Act of 2006’’. 

6 SEC. 2. BROKER REPORTING OF CUSTOMER’S BASIS IN SE7 CURITIES TRANSACTIONS. 

8 (a) IN GENERAL.—Section 6045 of the Internal Rev9 enue Code of 1986 (relating to returns of brokers) is 


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1 amended by adding at the end the following new sub2 section: 

3 ‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE

4 CASE OF SECURITIES TRANSACTIONS.— 

5 ‘‘(1) IN GENERAL.—If a broker is otherwise re6 quired to make a return under subsection (a) with 

7 respect to any applicable security, the broker shall 

8 include in such return the information described in 

9 paragraph (2). 

10 ‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 

11 ‘‘(A) IN GENERAL.—The information re12 quired under paragraph (1) to be shown on a 

13 return with respect to an applicable security of 

14 a customer shall include for each reported ap15 plicable security the customer’s adjusted basis 

16 in such security. 

17 ‘‘(B) EXEMPTION FROM REQUIREMENT.— 

18 The Secretary shall issue such regulations or 

19 guidance as necessary concerning the applica20 tion of the requirement under subparagraph (A) 

21 in cases in which a broker in making a return 

22 does not have sufficient information to meet 

23 such requirement with respect to the reported 

24 applicable security. Such regulations or guid25 ance may— 


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1 ‘‘(i) require such other information re2 lated to such adjusted basis as the Sec3 retary may prescribe, and 

4 ‘‘(ii) exempt classes of cases in which 

5 the broker does not have sufficient infor6 mation to meet either the requirement 

7 under subparagraph (A) or the require8 ment under clause (i). 

9 ‘‘(3) INFORMATION TRANSFERS.—To the extent 

10 provided in regulations, there shall be such ex11 changes of information between brokers as such reg12 ulations may require for purposes of enabling such 

13 brokers to meet the requirements of this subsection. 

14 ‘‘(4) DEFINITIONS.—For purposes of this sub15 section, the term ‘applicable security’ means any— 

16 ‘‘(A) security described in subparagraph 

17 (A) or (C) of section 475(c)(2), 

18 ‘‘(B) interest in a regulated investment 

19 company (as defined in section 851), or 

20 ‘‘(C) other financial instrument designated 

21 in regulations prescribed by the Secretary.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to returns the due date for which 

24 (determined without regard to extensions) is after DecemVerDate Aug 31 2005 03:17 Mar 15, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2414.IS S2414

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1 ber 31, 2008, with respect to securities acquired after De2 cember 31, 2007. 

Æ 


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