I 

114TH CONGRESS 

1ST SESSION H. R. 3508 

To amend the Internal Revenue Code of 1986 to allow an annual elective 

surcharge in lieu of estate tax, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 15, 2015 

Mr. HARRIS (for himself, Mr. MOONEY of West Virginia, and Mr. BEYER) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow an 

annual elective surcharge in lieu of estate tax, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘American Solution for Simplifying the Estate Tax Act 

6 of 2015’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Congressional findings. 


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Sec. 3. Elective simplified estate tax. 

Sec. 4. Carry-over basis. 

Sec. 5. Returns. 

Sec. 6. Special rule for revocation of trusts in connection with election. 

1 SEC. 2. CONGRESSIONAL FINDINGS. 

2 Congress finds the following: 

3 (1) The current method of collecting Federal 

4 estate tax often cripples American family-owned 

5 businesses, farms, and ranches by forcing the sale of 

6 ongoing concerns in order to pay tax liability arising 

7 from the death of an owner, creating inefficiencies, 

8 dislocation, and often job losses. 

9 (2) From farmers and ranchers to urban busi10 ness owners, the Federal estate tax looms heavily 

11 and has a counterproductive effect on our Nation’s 

12 family-owned businesses that costs numerous jobs. 

13 (3) The job losses, economic dislocation, and ex14 cessive compliance costs are not justified given the 

15 fact that the estate tax has averaged one percent of 

16 total IRS collections since 1960, with $14 billion collected in fiscal year 2013 (less than 1 17 ⁄2 percent of 

18 total IRS collections). 

19 (4) The Joint Economic Committee in its May 

20 2006 study concluded that in order to avoid wealth 

21 transfer taxes, individuals’ costs of complying with 

22 the estate tax roughly equals the revenue yield of the 

23 estate tax for the U.S. Treasury. 


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1 (5) The current method of collection of the es2 tate tax leads many wealthy Americans to lock up 

3 capital in trusts to minimize or eliminate tax liabil4 ity, meaning that billions of dollars are left idle in5 stead of facilitating the creation of new business 

6 ventures that could stimulate the economy. 

7 (6) As recently as 2009, of the 34,000 estate 

8 tax returns filed that year, only half owed any estate 

9 tax, indicating that many wealthy Americans have 

10 found means to avoid paying this tax. In 2012, 

11 9,400 Americans still had to file estate tax returns, 

12 even with the higher $5 million threshold. 

13 (7) It is in the national interest to modify the 

14 mechanism for collection of revenues from those 

15 Americans who have the largest estates, provided 

16 that it is done in a revenue neutral manner that en17 sures the ongoing collection of an appropriate per18 centage of the historical average of 1 percent of total 

19 IRS tax receipts that reflects the lower amount of 

20 estate tax revenues generated under the 2010 and 

21 2012 amendments due to a higher exemption 

22 amount. 


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1 SEC. 3. ELECTIVE SIMPLIFIED ESTATE TAX. 

2 (a) IN GENERAL.—Chapter 11 of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new subchapter: 

5 ‘‘Subchapter D—Simplified Estate Tax 

‘‘Sec. 2301. Simplified estate tax. 

‘‘Sec. 2302. Imposition and rate. 

‘‘Sec. 2303. Election. 

‘‘Sec. 2304. Seven taxable year minimum. 

6 ‘‘SEC. 2301. SIMPLIFIED ESTATE TAX. 

7 ‘‘In the case of an individual (and, if married, such 

8 individual’s spouse) who elects the application of this sub9 chapter— 

10 ‘‘(1) chapter 11 shall thereafter not apply with 

11 respect to the transfer of the estate of such indi12 vidual (or such spouse), 

13 ‘‘(2) chapter 13 shall thereafter not apply with 

14 respect to any generation-skipping transfer (as de15 fined in section 2611) made by such individual (or 

16 such spouse), and 

17 ‘‘(3) a tax shall be imposed by section 2302 

18 with respect to such individual (and such spouse) for 

19 the taxable year of the election and each taxable 

20 year thereafter. 

21 ‘‘SEC. 2302. IMPOSITION AND RATE. 

22 ‘‘(a) IN GENERAL.—The tax imposed by this section 

23 for any taxable year shall be treated as an increase in the 


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1 taxpayer’s tax under chapter 1 for the taxable year by an 

2 amount equal to 1 percent of the modified adjusted gross 

3 income of the taxpayer for the taxable year. 

4 ‘‘(b) MODIFIED ADJUSTED GROSS INCOME.—For 

5 purposes of this section, the term ‘modified adjusted gross 

6 income’ means adjusted gross income increased by— 

7 ‘‘(1) any amount excluded from gross income 

8 under section 911, 931, or 933, or 

9 ‘‘(2) any amount of interest received or accrued 

10 by the taxpayer during the taxable year which is ex11 empt from tax. 

12 ‘‘(c) APPLICATION OF INCREASE IN RATE.—Any in13 crease in the rate of tax imposed by subsection (a) shall 

14 not apply to any individual who has elected the application 

15 of this subchapter prior to the effective date of such in16 crease. 

17 ‘‘SEC. 2303. ELECTION. 

18 ‘‘(a) IN GENERAL.—Except as the Secretary shall by 

19 regulation prescribe in the case of separation, divorce, re20 marriage, or other circumstances the Secretary determines 

21 equitable, election for this subchapter to apply, once made, 

22 shall be irrevocable. 

23 ‘‘(b) MARRIED COUPLES TO FILE JOINTLY.—If the 

24 taxpayer and the taxpayer’s spouse elect the application 

25 of this subchapter and are married (within the meaning 


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1 of section 7703) at the end of the taxable year, the tax2 payer and the taxpayer’s spouse shall file a joint return 

3 for the taxable year. 

4 ‘‘SEC. 2304. SEVEN TAXABLE YEAR MINIMUM. 

5 ‘‘(a) IN GENERAL.—In the case of a decedent whose 

6 last taxable year is not at least the 7th taxable year for 

7 which the tax under section 2302 is imposed, the applica8 tion of this subchapter shall be treated as not having been 

9 elected. 

10 ‘‘(b) TRANSITION RULE FOR 2016 AND 2017.— 

11 ‘‘(1) IN GENERAL.—In the case of a decedent 

12 who first elected the application of this subchapter 

13 during 2016 or 2017, subsection (a) shall not apply 

14 if the executor of the decedent’s estate elects to in15 crease the amount of the tax imposed under chapter 

16 1 for the decedent’s last taxable year by an amount 

17 equal to— 

18 ‘‘(A) the highest amount of tax imposed by 

19 section 2302 with respect to such decedent for 

20 any taxable year (including the decedent’s last 

21 taxable year), multiplied by 

22 ‘‘(B) an amount equal to the difference 

23 of— 

24 ‘‘(i) 7, over 


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1 ‘‘(ii) the number of taxable years for 

2 which such tax was imposed with respect 

3 to such decedent (including the decedent’s 

4 last taxable year). 

5 ‘‘(2) SPECIAL RULE FOR DECEDENT DYING

6 DURING YEAR OF ELECTION.—In the case of a dece7 dent to whom paragraph (1) applies and who first 

8 elected the application of this subchapter with re9 spect to the last taxable year of the decedent, the 

10 amount under subparagraph (A) shall not be less 

11 than the amount of tax which would have been im12 posed by section 2302 had such election first been 

13 elected with respect to the preceding taxable year. 

14 ‘‘(c) CREDIT FOR TAXES PAID.— 

15 ‘‘(1) IN GENERAL.—In the case of a decedent 

16 to which subsection (a) applies, the Secretary shall 

17 by regulation provide for allowing for a credit 

18 against the tax imposed by chapter 11 with respect 

19 to the decedent to account for any taxes paid by the 

20 decedent under section 2302. 

21 ‘‘(2) INTEREST.—The amount of any credit de22 termined under paragraph (1) with respect to any 

23 tax paid shall include interest, which shall be deter24 mined— 


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1 ‘‘(A) at the overpayment rate established 

2 under section 6621, and 

3 ‘‘(B) from the date of payment of such tax 

4 to the due date of the amount against which 

5 the credit is allowed.’’. 

6 (b) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after, 

8 and estates of decedents dying after, December 31, 2015. 

9 SEC. 4. CARRY-OVER BASIS. 

10 (a) IN GENERAL.—Part II of subchapter O of chap11 ter 1 of such Code is amended by inserting after section 

12 1021 the following new section: 

13 ‘‘SEC. 1022. TREATMENT OF PROPERTY ACQUIRED FROM A 

14 DECEDENT WHO ELECTED SIMPLIFIED ES15 TATE TAX TREATMENT. 

16 ‘‘(a) IN GENERAL.—In the case of property acquired 

17 from a decedent who elected the application of subchapter 

18 D of chapter 11— 

19 ‘‘(1) such property shall be treated for purposes 

20 of this subtitle as transferred by gift, and 

21 ‘‘(2) the basis of the person acquiring property 

22 from such a decedent shall be the lesser of— 

23 ‘‘(A) the adjusted basis of the decedent, or 

24 ‘‘(B) the fair market value of the property 

25 at the date of the decedent’s death. 


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1 ‘‘(b) PROPERTY ACQUIRED FROM THE DECEDENT.— 

2 For purposes of this section, the following property shall 

3 be considered to have been acquired from the decedent: 

4 ‘‘(1) Property acquired by bequest, devise, or 

5 inheritance, or by the decedent’s estate from the de6 cedent. 

7 ‘‘(2) Property transferred by the decedent dur8 ing his lifetime— 

9 ‘‘(A) to a qualified revocable trust (as de10 fined in section 645(b)(1)), or 

11 ‘‘(B) to any other trust with respect to 

12 which the decedent reserved the right to make 

13 any change in the enjoyment thereof through 

14 the exercise of a power to alter, amend, or ter15 minate the trust. 

16 ‘‘(3) Any other property passing from the dece17 dent by reason of death to the extent that such 

18 property passed without consideration.’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply with respect to estates of decedents 

21 dying after December 31, 2015. 

22 SEC. 5. SIMPLIFIED ESTATE TAX RETURNS. 

23 (a) INFORMATION RETURNS.— 

24 (1) IN GENERAL.—Subpart C of part II of sub25 chapter A of chapter 61 of such Code is amended by 


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1 inserting after section 6018 the following new sec2 tion: 

3 ‘‘SEC. 6018A. SIMPLIFIED ESTATE TAX RETURNS. 

4 ‘‘(a) IN GENERAL.—In the case of property acquired 

5 from a decedent who has in effect an election under sub6 chapter D of chapter 11, the executor of the estate of such 

7 decedent shall make a return containing the following in8 formation with respect to such property: 

9 ‘‘(1) The name and TIN of the recipient of 

10 such property. 

11 ‘‘(2) An accurate description of such property. 

12 ‘‘(3) The adjusted basis of such property in the 

13 hands of the decedent and its fair market value at 

14 the time of death. 

15 ‘‘(4) The decedent’s holding period for such 

16 property. 

17 ‘‘(5) Sufficient information to determine wheth18 er any gain on the disposition of the property would 

19 be treated as ordinary income. 

20 ‘‘(b) PROPERTY ACQUIRED FROM DECEDENT.—For 

21 purposes of this section, section 1022 shall apply for pur22 poses of determining the property acquired from a dece23 dent. 

24 ‘‘(c) STATEMENTS TO BE FURNISHED TO CERTAIN

25 PERSONS.—Every person required to make a return under 


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1 subsection (a) shall furnish to each person whose name 

2 is required to be set forth in such return (other than the 

3 person required to make such return) a written statement 

4 showing— 

5 ‘‘(1) the name, address, and phone number of 

6 the person required to make such return, and 

7 ‘‘(2) the information specified in subsection (a) 

8 with respect to property acquired from, or passing 

9 from, the decedent to the person required to receive 

10 such statement. 

11 The written statement required under the preceding sen12 tence shall be furnished not later than 30 days after the 

13 date that the return required by subsection (a) is filed. 

14 ‘‘(d) ANNUAL BENEFICIARY ASSET STATUS RE15 TURN.—Each recipient of property with respect to whom 

16 a statement is required to be furnished under subsection 

17 (c) and who owns any such property during the taxable 

18 year shall make a return with respect to such property 

19 containing the following information: 

20 ‘‘(1) An accurate description of such property. 

21 ‘‘(2) An accounting of the disposition of any 

22 such property during the taxable year. 

23 ‘‘(3) The adjusted basis of such property as of 

24 the later of the end of the taxable year or the date 

25 of any such disposition. 


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1 ‘‘(e) EXCEPTED PROPERTY.— 

2 ‘‘(1) IN GENERAL.—Subsections (a) and (b) 

3 shall not apply with respect to— 

4 ‘‘(A) any property the fair market value of 

5 which, at the time of the decedent’s death, does 

6 not exceed $10,000, and 

7 ‘‘(B) any property the basis of which was 

8 determined by reference to the fair market 

9 value of the property at the date of the dece10 dent’s death. 

11 ‘‘(2) INFLATION ADJUSTMENT.— 

12 ‘‘(A) IN GENERAL.—In the case of any cal13 endar year after 2016, the $10,000 amount 

14 under paragraph (1) shall be increased by an 

15 amount equal to— 

16 ‘‘(i) such dollar amount, multiplied by 

17 ‘‘(ii) the cost-of-living adjustment de18 termined under section 1(f)(3) for the cal19 endar year, determined by substituting 

20 ‘calendar year 2014’ for ‘calendar year 

21 1992’ in subparagraph (B) thereof. 

22 ‘‘(B) ROUNDING.—If any amount as ad23 justed under subparagraph (A) is not a multiple 

24 of $100, such amount shall be rounded to the 

25 next lowest multiple of $100.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for subpart C of part II of subchapter A of 

3 chapter 61 of such Code is amended by inserting 

4 after the item relating to section 6018 the following 

5 new item: 

‘‘Sec. 6018A. Simplified estate tax returns.’’. 

6 (b) TIME FOR FILING RETURNS.—Section 6075(a) 

7 of such Code is amended— 

8 (1) by striking ‘‘ESTATE TAX RETURN.—Re9 turns made’’ and inserting the following: ‘‘ESTATE

10 TAX RETURN.— 

11 ‘‘(1) IN GENERAL.—Returns made’’, and 

12 (2) by adding at the end the following new 

13 paragraph: 

14 ‘‘(2) SIMPLIFIED ESTATE TAX.— 

15 ‘‘(A) IN GENERAL.—Returns made under 

16 section 6018A(a) shall be filed not later than 

17 180 days after the date of the decedent’s death. 

18 ‘‘(B) ANNUAL BENEFICIARY ASSET STATUS

19 RETURNS.—Returns made under section 

20 6018A(d) for a taxable year shall be filed con21 currently with the individual’s return of income 

22 tax for the taxable year.’’. 

23 (c) PENALTY FOR FAILURE TO FILE RETURNS.— 


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1 (1) IN GENERAL.—Part 1 of subchapter B of 

2 chapter 68 of such Code is amended by adding at 

3 the end the following new section: 

4 ‘‘SEC. 6720D. FAILURE TO FILE INFORMATION WITH RE5 SPECT TO SIMPLIFIED ESTATE TAX RETURNS. 

6 ‘‘(a) INFORMATION REQUIRED TO BE FILED WITH

7 SECRETARY.—Any person required to furnish any infor8 mation under section 6018A(a) who fails to do so on the 

9 date prescribed therefor (determined with regard to any 

10 extension of time for filing) shall pay a penalty of $10,000 

11 for each such failure. 

12 ‘‘(b) INFORMATION REQUIRED TO BE FURNISHED

13 TO BENEFICIARIES.—Any person required to furnish in 

14 writing to each person described in section 6018A(c) the 

15 information required under such section who fails to do 

16 so shall pay a penalty of $250 for each such failure. 

17 ‘‘(c) ANNUAL INFORMATION RETURN REQUIRED TO

18 BE FURNISHED BY BENEFICIARY.—Any person required 

19 to furnish any information under section 6018A(d) who 

20 fails to do so on the date prescribed therefor (determined 

21 with regard to any extension of time for filing) shall pay 

22 a penalty of $5,000 for each such failure. 

23 ‘‘(d) REASONABLE CAUSE EXCEPTION.—No penalty 

24 shall be imposed under subsection (a), (b), or (c) with reVerDate Sep 11 2014 23:01 Sep 15, 2015 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H3508.IH H3508

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1 spect to a failure if it is shown that such failure is due 

2 to reasonable cause. 

3 ‘‘(e) INTENTIONAL DISREGARD.—If any failure 

4 under subsection (a), (b), or (c) is due to intentional dis5 regard of the requirements under section 6018A, the pen6 alty under such subsection shall be 5 percent of the fair 

7 market value as of the date of death (in the case of section 

8 6018A(d), as of the date prescribed for furnishing such 

9 return (determined with regard to any extension of time 

10 for filing)) of the property with respect to which the infor11 mation is required. 

12 ‘‘(f) DEFICIENCY PROCEDURES NOT TO APPLY.— 

13 Subchapter B of chapter 63 (relating to deficiency proce14 dures for income, estate, gift, and certain excise taxes) 

15 shall not apply in respect of the assessment or collection 

16 of any penalty imposed by this section.’’. 

17 (2) CLERICAL AMENDMENT.—The table of sec18 tions for part 1 of subchapter B of chapter 68 of 

19 such Code is amended by adding at the end the fol20 lowing new item: 

‘‘Sec. 6720D. Failure to file information with respect to simplified estate tax 

returns.’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply with respect to estates of decedents 

23 dying after December 31, 2015. 


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1 SEC. 6. SPECIAL RULE FOR REVOCATION OF TRUSTS IN 

2 CONNECTION WITH ELECTION. 

3 Any revesting in the grantor of title to property held 

4 in a trust, whether by revocation, dissolution, or otherwise, 

5 shall not be subject to any tax imposed by the Internal 

6 Revenue Code of 1986 if such revesting occurs in 2016 

7 or 2017 and is in connection with the grantor’s election 

8 for subchapter D of chapter 11 to apply. 

Æ 


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