I 

118TH CONGRESS 

2D SESSION H. R. 7024 

To make improvements to the child tax credit, to provide tax incentives 

to promote economic growth, to provide special rules for the taxation 

of certain residents of Taiwan with income from sources within the 

United States, to provide tax relief with respect to certain Federal 

disasters, to make improvements to the low-income housing tax credit, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 17, 2024 

Mr. SMITH of Missouri introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on 

Rules, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

A BILL 

To make improvements to the child tax credit, to provide 

tax incentives to promote economic growth, to provide 

special rules for the taxation of certain residents of Taiwan with income from sources within the United States, 

to provide tax relief with respect to certain Federal disasters, to make improvements to the low-income housing 

tax credit, 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS; ETC. 

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

3 ‘‘Tax Relief for American Families and Workers Act of 

4 2024’’. 

5 (b) AMENDMENT OF 1986 CODE.—Except as other6 wise expressly provided, whenever in this Act an amend7 ment or repeal is expressed in terms of an amendment 

8 to, or repeal of, a section or other provision, the reference 

9 shall be considered to be made to a section or other provi10 sion of the Internal Revenue Code of 1986. 

11 (c) TABLE OF CONTENTS.—The table of contents of 

12 this Act is as follows: 

Sec. 1. Short title; table of contents; etc. 

TITLE I—TAX RELIEF FOR WORKING FAMILIES 

Sec. 101. Per-child calculation of refundable portion of child tax credit. 

Sec. 102. Increase in refundable portion. 

Sec. 103. Inflation of credit amount. 

Sec. 104. Rule for determination of earned income. 

TITLE II—AMERICAN INNOVATION AND GROWTH 

Sec. 201. Deduction for domestic research and experimental expenditures. 

Sec. 202. Extension of allowance for depreciation, amortization, or depletion in 

determining the limitation on business interest. 

Sec. 203. Extension of 100 percent bonus depreciation. 

Sec. 204. Increase in limitations on expensing of depreciable business assets. 

TITLE III—INCREASING GLOBAL COMPETITIVENESS 

Subtitle A—United States-Taiwan Expedited Double-Tax Relief Act 

Sec. 301. Short title. 

Sec. 302. Special rules for taxation of certain residents of Taiwan. 

Subtitle B—United States-Taiwan Tax Agreement Authorization Act 

Sec. 311. Short title. 

Sec. 312. Definitions. 

Sec. 313. Authorization to negotiate and enter into agreement. 

Sec. 314. Consultations with Congress. 

Sec. 315. Approval and implementation of agreement. 


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Sec. 316. Submission to Congress of agreement and implementation policy. 

Sec. 317. Consideration of approval legislation and implementing legislation. 

Sec. 318. Relationship of agreement to Internal Revenue Code of 1986. 

Sec. 319. Authorization of subsequent tax agreements relative to Taiwan. 

Sec. 320. United States treatment of double taxation matters with respect to 

Taiwan. 

TITLE IV—ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES 

Sec. 401. Short title. 

Sec. 402. Extension of rules for treatment of certain disaster-related personal 

casualty losses. 

Sec. 403. Exclusion from gross income for compensation for losses or damages 

resulting from certain wildfires. 

Sec. 404. East Palestine disaster relief payments. 

TITLE V—MORE AFFORDABLE HOUSING 

Sec. 501. State housing credit ceiling increase for low-income housing credit. 

Sec. 502. Tax-exempt bond financing requirement. 

TITLE VI—TAX ADMINISTRATION AND ELIMINATING FRAUD 

Sec. 601. Increase in threshold for requiring information reporting with respect 

to certain payees. 

Sec. 602. Enforcement provisions with respect to COVID-related employee retention credits. 

1 TITLE I—TAX RELIEF FOR 

2 WORKING FAMILIES 

3 SEC. 101. PER-CHILD CALCULATION OF REFUNDABLE POR4 TION OF CHILD TAX CREDIT. 

5 (a) IN GENERAL.—Subparagraph (A) of section 

6 24(h)(5) is amended to read as follows: 

7 ‘‘(A) IN GENERAL.—In applying subsection 

8 (d)— 

9 ‘‘(i) the amount determined under 

10 paragraph (1)(A) of such subsection with 

11 respect to any qualifying child shall not ex12 ceed $1,400, and such paragraph shall be 


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1 applied without regard to paragraph (4) of 

2 this subsection, and 

3 ‘‘(ii) paragraph (1)(B) of such sub4 section shall be applied by multiplying each 

5 of— 

6 ‘‘(I) the amount determined 

7 under clause (i) thereof, and 

8 ‘‘(II) the excess determined 

9 under clause (ii) thereof, 

10 by the number of qualifying children of the 

11 taxpayer.’’. 

12 (b) CONFORMING AMENDMENT.—The heading of 

13 paragraph (5) of section 24(h) is amended by striking 

14 ‘‘MAXIMUM AMOUNT OF’’ and inserting ‘‘SPECIAL RULES

15 FOR’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2022. 

19 SEC. 102. INCREASE IN REFUNDABLE PORTION. 

20 (a) IN GENERAL.—Paragraph (5) of section 24(h) is 

21 amended by redesignating subparagraph (B) as subpara22 graph (C) and by inserting after subparagraph (A) the 

23 following new subparagraph: 

24 ‘‘(B) AMOUNTS FOR 2023, 2024, AND

25 2025.—In the case of a taxable year beginning 


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1 after 2022, subparagraph (A) shall be applied 

2 by substituting for ‘$1,400’— 

3 ‘‘(i) in the case of taxable year 2023, 

4 ‘$1,800’, 

5 ‘‘(ii) in the case of taxable year 2024, 

6 ‘$1,900’, and 

7 ‘‘(iii) in the case of taxable year 2025, 

8 ‘$2,000’.’’. 

9 (b) CONFORMING AMENDMENT.—Subparagraph (C) 

10 of section 24(h)(5), as redesignated by subsection (a), is 

11 amended by inserting ‘‘and before 2023’’ after ‘‘2018’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2022. 

15 SEC. 103. INFLATION OF CREDIT AMOUNT. 

16 (a) IN GENERAL.—Paragraph (2) of section 24(h) is 

17 amended— 

18 (1) by striking ‘‘AMOUNT.—Subsection’’ and in19 serting ‘‘AMOUNT.— 

20 ‘‘(A) IN GENERAL.—Subsection’’, and 

21 (2) by adding at the end the following new sub22 paragraph: 

23 ‘‘(B) ADJUSTMENT FOR INFLATION.—In 

24 the case of a taxable year beginning after 2023, 

25 the $2,000 amounts in subparagraph (A) and 


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1 paragraph (5)(B)(iii) shall each be increased by 

2 an amount equal to— 

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

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f)(3) for the cal6 endar year in which the taxable year be7 gins, determined by substituting ‘2022’ for 

8 ‘2016’ in subparagraph (A)(ii) thereof. 

9 If any increase under this clause is not a mul10 tiple of $100, such increase shall be rounded to 

11 the next lowest multiple of $100.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2023. 

15 SEC. 104. RULE FOR DETERMINATION OF EARNED INCOME. 

16 (a) IN GENERAL.—Paragraph (6) of section 24(h) of 

17 the Internal Revenue Code of 1986 is amended— 

18 (1) by striking ‘‘CREDIT.—Subsection’’ and in19 serting ‘‘CREDIT.— 

20 ‘‘(A) IN GENERAL.—Subsection’’, and 

21 (2) by adding at the end the following new sub22 paragraphs: 

23 ‘‘(B) RULE FOR DETERMINATION OF

24 EARNED INCOME.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 taxable year beginning after 2023, if the 

3 earned income of the taxpayer for such 

4 taxable year is less than the earned income 

5 of the taxpayer for the preceding taxable 

6 year, subsection (d)(1)(B)(i) may, at the 

7 election of the taxpayer, be applied by sub8 stituting— 

9 ‘‘(I) the earned income for such 

10 preceding taxable year, for 

11 ‘‘(II) the earned income for the 

12 current taxable year. 

13 ‘‘(ii) APPLICATION TO JOINT RE14 TURNS.—For purposes of clause (i), in the 

15 case of a joint return, the earned income 

16 of the taxpayer for the preceding taxable 

17 year shall be the sum of the earned income 

18 of each spouse for such preceding taxable 

19 year.’’. 

20 (b) ERRORS TREATED AS MATHEMATICAL ER21 RORS.—Paragraph (2) of section 6213(g) of the Internal 

22 Revenue Code of 1986 is amended by striking ‘‘and’’ at 

23 the end of subparagraph (U), by striking the period at 

24 the end of subparagraph (V) and inserting ‘‘, and’’, and 


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1 by inserting after subparagraph (V) the following new sub2 paragraph: 

3 ‘‘(W) in the case of a taxpayer electing the 

4 application of section 24(h)(6)(B) for any tax5 able year, an entry on a return of earned in6 come pursuant to such section which is incon7 sistent with the amount of such earned income 

8 determined by the Secretary for the preceding 

9 taxable year.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2023. 

13 TITLE II—AMERICAN 

14 INNOVATION AND GROWTH 

15 SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EX16 PERIMENTAL EXPENDITURES. 

17 (a) DELAY OF AMORTIZATION OF DOMESTIC RE18 SEARCH AND EXPERIMENTAL EXPENDITURES.—Section 

19 174 is amended by adding at the end the following new 

20 subsection: 

21 ‘‘(e) SUSPENSION OF APPLICATION OF SECTION TO

22 DOMESTIC RESEARCH AND EXPERIMENTAL EXPENDI23 TURES.—In the case of any domestic research or experi24 mental expenditures (as defined in section 174A(b)), this 

25 section— 


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1 ‘‘(1) shall apply to such expenditures paid or 

2 incurred in taxable years beginning after December 

3 31, 2025, and 

4 ‘‘(2) shall not apply to such expenditures paid 

5 or incurred in taxable years beginning on or before 

6 such date.’’. 

7 (b) REINSTATEMENT OF EXPENSING FOR DOMESTIC

8 RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part 

9 VI of subchapter B of chapter 1 is amended by inserting 

10 after section 174 the following new section: 

11 ‘‘SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH 

12 AND EXPERIMENTAL EXPENDITURES. 

13 ‘‘(a) TREATMENT AS EXPENSES.—Notwithstanding 

14 section 263, there shall be allowed as a deduction any do15 mestic research or experimental expenditures which are 

16 paid or incurred by the taxpayer during the taxable year. 

17 ‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX18 PENDITURES.—For purposes of this section, the term ‘do19 mestic research or experimental expenditures’ means re20 search or experimental expenditures paid or incurred by 

21 the taxpayer in connection with the taxpayer’s trade or 

22 business other than such expenditures which are attrib23 utable to foreign research (within the meaning of section 

24 41(d)(4)(F)). 


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1 ‘‘(c) AMORTIZATION OF CERTAIN DOMESTIC RE2 SEARCH AND EXPERIMENTAL EXPENDITURES.— 

3 ‘‘(1) IN GENERAL.—At the election of the tax4 payer, made in accordance with regulations or other 

5 guidance provided by the Secretary, in the case of 

6 domestic research or experimental expenditures 

7 which would (but for subsection (a)) be chargeable 

8 to capital account but not chargeable to property of 

9 a character which is subject to the allowance under 

10 section 167 (relating to allowance for depreciation, 

11 etc.) or section 611 (relating to allowance for deple12 tion), subsection (a) shall not apply and the tax13 payer shall— 

14 ‘‘(A) charge such expenditures to capital 

15 account, and 

16 ‘‘(B) be allowed an amortization deduction 

17 of such expenditures ratably over such period of 

18 not less than 60 months as may be selected by 

19 the taxpayer (beginning with the month in 

20 which the taxpayer first realizes benefits from 

21 such expenditures). 

22 ‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 

23 election provided by paragraph (1) may be made for 

24 any taxable year, but only if made not later than the 

25 time prescribed by law for filing the return for such 


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1 taxable year (including extensions thereof). The 

2 method so elected, and the period selected by the 

3 taxpayer, shall be adhered to in computing taxable 

4 income for the taxable year for which the election is 

5 made and for all subsequent taxable years unless, 

6 with the approval of the Secretary, a change to a 

7 different method (or to a different period) is author8 ized with respect to part or all of such expenditures. 

9 The election shall not apply to any expenditure paid 

10 or incurred during any taxable year before the tax11 able year for which the taxpayer makes the election. 

12 ‘‘(d) ELECTION TO CAPITALIZE EXPENSES.—In the 

13 case of a taxpayer which elects (at such time and in such 

14 manner as the Secretary may provide) the application of 

15 this subsection, subsections (a) and (c) shall not apply and 

16 domestic research or experimental expenditures shall be 

17 chargeable to capital account. Such election shall not 

18 apply to any expenditure paid or incurred during any tax19 able year before the taxable year for which the taxpayer 

20 makes the election and may be made with respect to part 

21 of the expenditures paid or incurred during any taxable 

22 year only with the approval of the Secretary. 

23 ‘‘(e) SPECIAL RULES.— 

24 ‘‘(1) LAND AND OTHER PROPERTY.—This sec25 tion shall not apply to any expenditure for the acquiVerDate Sep 11 2014 00:33 Jan 18, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 sition or improvement of land, or for the acquisition 

2 or improvement of property to be used in connection 

3 with the research or experimentation and of a char4 acter which is subject to the allowance under section 

5 167 (relating to allowance for depreciation, etc.) or 

6 section 611 (relating to allowance for depletion); but 

7 for purposes of this section allowances under section 

8 167, and allowances under section 611, shall be con9 sidered as expenditures. 

10 ‘‘(2) EXPLORATION EXPENDITURES.—This sec11 tion shall not apply to any expenditure paid or in12 curred for the purpose of ascertaining the existence, 

13 location, extent, or quality of any deposit of ore or 

14 other mineral (including oil and gas). 

15 ‘‘(3) SOFTWARE DEVELOPMENT.—For purposes 

16 of this section, any amount paid or incurred in con17 nection with the development of any software shall 

18 be treated as a research or experimental expendi19 ture. 

20 ‘‘(f) TERMINATION.— 

21 ‘‘(1) IN GENERAL.—This section shall not apply 

22 to amounts paid or incurred in taxable years begin23 ning after December 31, 2025. 

24 ‘‘(2) CHANGE IN METHOD OF ACCOUNTING.—In 

25 the case of a taxpayer’s first taxable year beginning 


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1 after December 31, 2025, paragraph (1) (and the 

2 corresponding application of section 174) shall be 

3 treated as a change in method of accounting for pur4 poses of section 481 and— 

5 ‘‘(A) such change shall be treated as initi6 ated by the taxpayer, 

7 ‘‘(B) such change shall be treated as made 

8 with the consent of the Secretary, and 

9 ‘‘(C) such change shall be applied only on 

10 a cut-off basis for any domestic research or ex11 perimental expenditures paid or incurred in tax12 able years beginning after December 31, 2025, 

13 and no adjustment under section 481(a) shall 

14 be made.’’. 

15 (c) COORDINATION WITH CERTAIN OTHER PROVI16 SIONS.— 

17 (1) RESEARCH CREDIT.— 

18 (A) Section 41(d)(1)(A) is amended by in19 serting ‘‘or domestic research or experimental 

20 expenditures under section 174A’’ after ‘‘sec21 tion 174’’. 

22 (B) Section 280C(c)(1) is amended to read 

23 as follows: 

24 ‘‘(1) IN GENERAL.—The domestic research or 

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1 count under section 174 or 174A (as the case may 

2 be) shall be reduced by the amount of the credit al3 lowed under section 41(a).’’. 

4 (2) AMT ADJUSTMENT.—Section 56(b)(2) is 

5 amended by striking ‘‘174(a)’’ each place it appears 

6 and inserting ‘‘174A(a)’’. 

7 (3) OPTIONAL 10-YEAR WRITEOFF.—Section 

8 59(e)(2)(B) is amended by striking ‘‘section 174(a) 

9 (relating to research and experimental expendi10 tures)’’ and inserting ‘‘section 174A(a) (relating to 

11 temporary rules for domestic research and experi12 mental expenditures)’’. 

13 (4) QUALIFIED SMALL ISSUE BONDS.—Section 

14 144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ 

15 and inserting ‘‘174A(a)’’. 

16 (5) START-UP EXPENDITURES.—Section 

17 195(c)(1) is amended by striking ‘‘or 174’’ in the 

18 last sentence and inserting ‘‘174, or 174A’’. 

19 (6) CAPITAL EXPENDITURES.— 

20 (A) Section 263(a)(1)(B) is amended by 

21 inserting ‘‘ or 174A’’ after ‘‘174’’. 

22 (B) Section 263A(c)(2) is amended by in23 serting ‘‘or 174A’’ after ‘‘174’’. 


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1 (7) ACTIVE BUSINESS COMPUTER SOFTWARE

2 ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 

3 inserting ‘‘174A,’’ after ‘‘174,’’. 

4 (8) SOURCE RULES.—Section 864(g)(2) is 

5 amended in the last sentence— 

6 (A) by striking ‘‘treated as deferred ex7 penses under subsection (b) of section 174’’ and 

8 inserting ‘‘allowed as an amortization deduction 

9 under section 174(a) or section 174A(c),’’, and 

10 (B) by striking ‘‘such subsection’’ and in11 serting ‘‘such section (as the case may be)’’. 

12 (9) BASIS ADJUSTMENT.—Section 1016(a)(14) 

13 is amended by striking ‘‘deductions as deferred ex14 penses under section 174(b)(1) (relating to research 

15 and experimental expenditures)’’ and inserting ‘‘de16 ductions under section 174 or 174A’’. 

17 (10) SMALL BUSINESS STOCK.—Section 

18 1202(e)(2)(B) is amended by striking ‘‘research and 

19 experimental expenditures under section 174’’ and 

20 inserting ‘‘specified research or experimental expend21 itures under section 174 or domestic research or ex22 perimental expenditures under section 174A’’. 

23 (d) CONFORMING AMENDMENTS.— 


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1 (1) Section 13206 of Public Law 115–97 is 

2 amended by striking subsection (b) (relating to 

3 change in method of accounting). 

4 (2) The table of sections for part VI of sub5 chapter B of chapter 1 is amended by inserting after 

6 the item relating to section 174 the following new 

7 item: 

‘‘Sec. 174A. Temporary rules for domestic research and experimental expenditures.’’. 

8 (e) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this subsection, the amendments made by 

11 this section shall apply to amounts paid or incurred 

12 in taxable years beginning after December 31, 2021. 

13 (2) COORDINATION WITH RESEARCH CREDIT.— 

14 The amendment made by subsection (c)(1)(B) shall 

15 apply to taxable years beginning after December 31, 

16 2022. 

17 (3) REPEAL OF SUPERCEDED CHANGE IN

18 METHOD OF ACCOUNTING RULES.—The amendment 

19 made by subsection (d)(1) shall take effect as if in20 cluded in Public Law 115–97. 

21 (4) NO INFERENCE WITH RESPECT TO COORDI22 NATION WITH RESEARCH CREDIT FOR PRIOR PERI23 ODS.—The amendment made by subsection 

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1 ence with respect to the proper application of section 

2 280C(c) of the Internal Revenue Code of 1986 with 

3 respect to taxable years beginning before January 1, 

4 2023. 

5 (f) TRANSITION RULES.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided by the Secretary, an election made under sub8 section (c) or (d) of section 174A of the Internal 

9 Revenue Code of 1986 (as added by this section) for 

10 the taxpayer’s first taxable year beginning after De11 cember 31, 2021, shall not fail to be treated as time12 ly made (or as made on the return) if made during 

13 the 1-year period beginning on the date of the enact14 ment of this Act on an amended return for the tax15 payer’s first taxable year beginning after December 

16 31, 2021, or in such other manner as the Secretary 

17 may provide. 

18 (2) ELECTION REGARDING TREATMENT AS

19 CHANGE IN METHOD OF ACCOUNTING.—In the case 

20 of any taxpayer which (as of the date of the enact21 ment of this Act) had adopted a method of account22 ing provided by section 174 of the Internal Revenue 

23 Code of 1986 (as in effect prior to the amendments 

24 made by this section) for the taxpayer’s first taxable 


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1 year beginning after December 31, 2021, and elects 

2 the application of this paragraph— 

3 (A) the amendments made by this section 

4 shall be treated as a change in method of ac5 counting for purposes of section 481 of such 

6 Code, 

7 (B) such change shall be treated as initi8 ated by the taxpayer for the taxpayer’s imme9 diately succeeding taxable year, 

10 (C) such change shall be treated as made 

11 with the consent of the Secretary, 

12 (D) such change shall be applied on a 

13 modified cut-off basis, taking into account for 

14 purposes of section 481(a) of such Code only 

15 the domestic research or experimental expendi16 tures (as defined in section 174A(b) of such 

17 Code (as added by this section) and determined 

18 by applying the rules of section 174A(e) of such 

19 Code) paid or incurred in the taxpayer’s first 

20 taxable year beginning after December 31, 

21 2021, and not allowed as a deduction in such 

22 taxable year, and 

23 (E) in the case of a taxpayer which elects 

24 the application of this subparagraph, the 

25 amount of such change (as determined under 


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1 subparagraph (D)) shall be taken into account 

2 ratably over the 2-taxable-year period beginning 

3 with the taxable year referred to in subpara4 graph (B). 

5 (3) ELECTION REGARDING 10-YEAR WRITE6 OFF.— 

7 (A) IN GENERAL.—Except as otherwise 

8 provided by the Secretary, an eligible taxpayer 

9 which files, during the 1-year period beginning 

10 on the date of the enactment of this Act, an 

11 amended income tax return for the taxable year 

12 described in subparagraph (B)(ii) may elect the 

13 application of section 59(e) of the Internal Rev14 enue Code of 1986 with respect to qualified ex15 penditures described in section 59(e)(2)(B) of 

16 such Code (as amended by subsection (c)(3)) 

17 with respect to such taxable year. Such election 

18 shall be filed with such amended income tax re19 turn and shall be effective only to the extent 

20 that such election would have been effective if 

21 filed with the original income tax return for 

22 such taxable year (determined after taking into 

23 account the amendment made by subsection 

24 (c)(3)). 


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1 (B) ELIGIBLE TAXPAYER.—For purposes 

2 of subparagraph (A), the term ‘‘eligible tax3 payer’’ means any taxpayer which— 

4 (i) does not elect the application of 

5 paragraph (2), and 

6 (ii) filed an income tax return for 

7 such taxpayer’s first taxable year begin8 ning after December 31, 2021, before the 

9 earlier of— 

10 (I) the due date for such return, 

11 and 

12 (II) the date of the enactment of 

13 this Act. 

14 (4) ELECTION REGARDING COORDINATION

15 WITH RESEARCH CREDIT.—Except as otherwise pro16 vided by the Secretary, an eligible taxpayer (as de17 fined in paragraph (3)(B) without regard to clause 

18 (i) thereof) which files, during the 1-year period be19 ginning on the date of the enactment of this Act, an 

20 amended income tax return for the taxpayer’s first 

21 taxable year beginning after December 31, 2021, 

22 may, notwithstanding subparagraph (C) of section 

23 280C(c)(2) of the Internal Revenue Code of 1986 

24 make, or revoke, on such amended return the elec25 tion under such section for such taxable year. 


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1 SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION, 

2 AMORTIZATION, OR DEPLETION IN DETER3 MINING THE LIMITATION ON BUSINESS IN4 TEREST. 

5 (a) IN GENERAL.—Section 163(j)(8)(A)(v) is amend6 ed by striking ‘‘January 1, 2022’’ and inserting ‘‘January 

7 1, 2026’’. 

8 (b) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this subsection, the amendment made by 

11 this section shall apply to taxable years beginning 

12 after December 31, 2023. 

13 (2) ELECTION TO APPLY EXTENSION RETRO14 ACTIVELY.—In the case of a taxpayer which elects 

15 (at such time and in such manner as the Secretary 

16 may provide) the application of this paragraph, 

17 paragraph (1) shall be applied by substituting ‘‘De18 cember 31, 2021’’ for ‘‘December 31, 2023’’. 

19 SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIA20 TION. 

21 (a) IN GENERAL.—Section 168(k)(6)(A) is amend22 ed— 

23 (1) in clause (i)— 

24 (A) by striking ‘‘2023’’ and inserting 

25 ‘‘2026’’, and 

26 (B) by adding ‘‘and’’ at the end, and 


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1 (2) by striking clauses (ii), (iii), and (iv), and 

2 redesignating clause (v) as clause (ii). 

3 (b) PROPERTY WITH LONGER PRODUCTION PERI4 ODS.—Section 168(k)(6)(B) is amended— 

5 (1) in clause (i)— 

6 (A) by striking ‘‘2024’’ and inserting 

7 ‘‘2027’’, and 

8 (B) by adding ‘‘and’’ at the end, and 

9 (2) by striking clauses (ii), (iii), and (iv), and 

10 redesignating clause (v) as clause (ii). 

11 (c) PLANTS BEARING FRUITS AND NUTS.—Section 

12 168(k)(6)(C) is amended— 

13 (1) in clause (i)— 

14 (A) by striking ‘‘2023’’ and inserting 

15 ‘‘2026’’, and 

16 (B) by adding ‘‘and’’ at the end, and 

17 (2) by striking clauses (ii), (iii), and (iv), and 

18 redesignating clause (v) as clause (ii). 

19 (d) EFFECTIVE DATES.— 

20 (1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the amendments made by 

22 this section shall apply to property placed in service 

23 after December 31, 2022. 

24 (2) PLANTS BEARING FRUITS AND NUTS.—The 

25 amendments made by subsection (c) shall apply to 


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1 specified plants planted or grafted after December 

2 31, 2022. 

3 SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DE4 PRECIABLE BUSINESS ASSETS. 

5 (a) IN GENERAL.—Section 179(b) is amended— 

6 (1) by striking ‘‘$1,000,000’’ in paragraph (1) 

7 and inserting ‘‘$1,290,000’’, and 

8 (2) by striking ‘‘$2,500,000’’ in paragraph (2) 

9 and inserting ‘‘$3,220,000’’. 

10 (b) INFLATION ADJUSTMENT.—Section 179(b)(6) is 

11 amended— 

12 (1) by striking ‘‘2018’’ and inserting ‘‘2024 

13 (2018 in the case of the dollar amount in paragraph 

14 (5)(A))’’, and 

15 (2) by striking ‘‘ ‘calendar year 2017’’ and in16 serting ‘‘ ‘calendar year 2024’ (‘calendar year 2017’ 

17 in the case of the dollar amount in paragraph 

18 (5)(A))’’. 

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

20 this section shall apply to property placed in service in 

21 taxable years beginning after December 31, 2023. 


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1 TITLE III—INCREASING GLOBAL 

2 COMPETITIVENESS 

3 Subtitle A—United States-Taiwan 

4 Expedited Double-Tax Relief Act 

5 SEC. 301. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘United States-Tai7 wan Expedited Double-Tax Relief Act’’. 

8 SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN 

9 RESIDENTS OF TAIWAN. 

10 (a) IN GENERAL.—Subpart D of part II of sub11 chapter N of chapter 1 is amended by inserting after sec12 tion 894 the following new section: 

13 ‘‘SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF 

14 TAIWAN. 

15 ‘‘(a) CERTAIN INCOME FROM UNITED STATES

16 SOURCES.— 

17 ‘‘(1) INTEREST, DIVIDENDS, AND ROYALTIES, 

18 ETC.— 

19 ‘‘(A) IN GENERAL.—In the case of interest 

20 (other than original issue discount), dividends, 

21 royalties, amounts described in section 

22 871(a)(1)(C), and gains described in section 

23 871(a)(1)(D) received by or paid to a qualified 

24 resident of Taiwan— 


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1 ‘‘(i) sections 871(a), 881(a), 1441(a), 

2 1441(c)(5), and 1442(a) shall each be ap3 plied by substituting ‘the applicable per4 centage (as defined in section 

5 894A(a)(1)(C))’ for ‘30 percent’ each place 

6 it appears, and 

7 ‘‘(ii) sections 871(a), 881(a), and 

8 1441(c)(1) shall each be applied by sub9 stituting ‘a United States permanent es10 tablishment of a qualified resident of Tai11 wan’ for ‘a trade or business within the 

12 United States’ each place it appears. 

13 ‘‘(B) EXCEPTIONS.— 

14 ‘‘(i) IN GENERAL.—Subparagraph (A) 

15 shall not apply to— 

16 ‘‘(I) any dividend received from 

17 or paid by a real estate investment 

18 trust which is not a qualified REIT 

19 dividend, 

20 ‘‘(II) any amount subject to sec21 tion 897, 

22 ‘‘(III) any amount received from 

23 or paid by an expatriated entity (as 

24 defined in section 7874(a)(2)) to a 


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1 foreign related person (as defined in 

2 section 7874(d)(3)), and 

3 ‘‘(IV) any amount which is in4 cluded in income under section 860C 

5 to the extent that such amount does 

6 not exceed an excess inclusion with re7 spect to a REMIC. 

8 ‘‘(ii) QUALIFIED REIT DIVIDEND.— 

9 For purposes of clause (i)(I), the term 

10 ‘qualified REIT dividend’ means any divi11 dend received from or paid by a real estate 

12 investment trust if such dividend is paid 

13 with respect to a class of shares that is 

14 publicly traded and the recipient of the 

15 dividend is a person who holds an interest 

16 in any class of shares of the real estate in17 vestment trust of not more than 5 percent. 

18 ‘‘(C) APPLICABLE PERCENTAGE.—For 

19 purposes of applying subparagraph (A)(i)— 

20 ‘‘(i) IN GENERAL.—Except as pro21 vided in clause (ii), the term ‘applicable 

22 percentage’ means 10 percent. 

23 ‘‘(ii) SPECIAL RULES FOR DIVI24 DENDS.— In the case of any dividend in 

25 respect of stock received by or paid to a 


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1 qualified resident of Taiwan, the applicable 

2 percentage shall be 15 percent (10 percent 

3 in the case of a dividend which meets the 

4 requirements of subparagraph (D) and is 

5 received by or paid to an entity taxed as 

6 a corporation in Taiwan). 

7 ‘‘(D) REQUIREMENTS FOR LOWER DIVI8 DEND RATE.— 

9 ‘‘(i) IN GENERAL.—The requirements 

10 of this subparagraph are met with respect 

11 to any dividend in respect of stock in a 

12 corporation if, at all times during the 12- 

13 month period ending on the date such 

14 stock becomes ex-dividend with respect to 

15 such dividend— 

16 ‘‘(I) the dividend is derived by a 

17 qualified resident of Taiwan, and 

18 ‘‘(II) such qualified resident of 

19 Taiwan has held directly at least 10 

20 percent (by vote and value) of the 

21 total outstanding shares of stock in 

22 such corporation. 

23 For purposes of subclause (II), a person 

24 shall be treated as directly holding a share 

25 of stock during any period described in the 


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1 preceding sentence if the share was held by 

2 a corporation from which such person later 

3 acquired that share and such corporation 

4 was, at the time the share was acquired, 

5 both a connected person to such person 

6 and a qualified resident of Taiwan. 

7 ‘‘(ii) EXCEPTION FOR RICS AND

8 REITS.—Notwithstanding clause (i), the re9 quirements of this subparagraph shall not 

10 be treated as met with respect to any divi11 dend paid by a regulated investment com12 pany or a real estate investment trust. 

13 ‘‘(2) QUALIFIED WAGES.— 

14 ‘‘(A) IN GENERAL.—No tax shall be im15 posed under this chapter (and no amount shall 

16 be withheld under section 1441(a) or chapter 

17 24) with respect to qualified wages paid to a 

18 qualified resident of Taiwan who— 

19 ‘‘(i) is not a resident of the United 

20 States (determined without regard to sub21 section (c)(3)(E)), or 

22 ‘‘(ii) is employed as a member of the 

23 regular component of a ship or aircraft op24 erated in international traffic. 

25 ‘‘(B) QUALIFIED WAGES.— 


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1 ‘‘(i) IN GENERAL.—The term ‘quali2 fied wages’ means wages, salaries, or simi3 lar remunerations with respect to employ4 ment involving the performance of personal 

5 services within the United States which— 

6 ‘‘(I) are paid by (or on behalf of) 

7 any employer other than a United 

8 States person, and 

9 ‘‘(II) are not borne by a United 

10 States permanent establishment of 

11 any person other than a United States 

12 person. 

13 ‘‘(ii) EXCEPTIONS.—Such term shall 

14 not include directors’ fees, income derived 

15 as an entertainer or athlete, income de16 rived as a student or trainee, pensions, 

17 amounts paid with respect to employment 

18 with the United States, any State (or polit19 ical subdivision thereof), or any possession 

20 of the United States (or any political sub21 division thereof), or other amounts speci22 fied in regulations or guidance under sub23 section (f)(1)(F). 

24 ‘‘(3) INCOME DERIVED FROM ENTERTAINMENT

25 OR ATHLETIC ACTIVITIES.— 


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1 ‘‘(A) IN GENERAL.—No tax shall be im2 posed under this chapter (and no amount shall 

3 be withheld under section 1441(a) or chapter 

4 24) with respect to income derived by an enter5 tainer or athlete who is a qualified resident of 

6 Taiwan from personal activities as such per7 formed in the United States if the aggregate 

8 amount of gross receipts from such activities 

9 for the taxable year do not exceed $30,000. 

10 ‘‘(B) EXCEPTION.—Subparagraph (A) 

11 shall not apply with respect to— 

12 ‘‘(i) income which is qualified wages 

13 (as defined in paragraph (2)(B), deter14 mined without regard to clause (ii) there15 of), or 

16 ‘‘(ii) income which is effectively con17 nected with a United States permanent es18 tablishment. 

19 ‘‘(b) INCOME CONNECTED WITH A UNITED STATES

20 PERMANENT ESTABLISHMENT OF A QUALIFIED RESI21 DENT OF TAIWAN.— 

22 ‘‘(1) IN GENERAL.— 

23 ‘‘(A) IN GENERAL.—In lieu of applying 

24 sections 871(b) and 882, a qualified resident of 

25 Taiwan that carries on a trade or business 


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1 within the United States through a United 

2 States permanent establishment shall be taxable 

3 as provided in section 1, 11, 55, or 59A, on its 

4 taxable income which is effectively connected 

5 with such permanent establishment. 

6 ‘‘(B) DETERMINATION OF TAXABLE IN7 COME.—In determining taxable income for pur8 poses of paragraph (1), gross income includes 

9 only gross income which is effectively connected 

10 with the permanent establishment. 

11 ‘‘(2) TREATMENT OF DISPOSITIONS OF UNITED

12 STATES REAL PROPERTY.—In the case of a qualified 

13 resident of Taiwan, section 897(a) shall be applied— 

14 ‘‘(A) by substituting ‘carried on a trade or 

15 business within the United States through a 

16 United States permanent establishment’ for 

17 ‘were engaged in a trade or business within the 

18 United States’, and 

19 ‘‘(B) by substituting ‘such United States 

20 permanent establishment’ for ‘such trade or 

21 business’. 

22 ‘‘(3) TREATMENT OF BRANCH PROFITS

23 TAXES.—In the case of any corporation which is a 

24 qualified resident of Taiwan, section 884 shall be ap25 plied— 


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1 ‘‘(A) by substituting ‘10 percent’ for ‘30 

2 percent ’ in subsection (a) thereof, and 

3 ‘‘(B) by substituting ‘a United States per4 manent establishment of a qualified resident of 

5 Taiwan’ for ‘the conduct of a trade or business 

6 within the United States’ in subsection (d)(1) 

7 thereof. 

8 ‘‘(4) SPECIAL RULE WITH RESPECT TO INCOME

9 DERIVED FROM CERTAIN ENTERTAINMENT OR ATH10 LETIC ACTIVITIES.— 

11 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

12 not apply to the extent that the income is de13 rived— 

14 ‘‘(i) in respect of entertainment or 

15 athletic activities performed in the United 

16 States, and 

17 ‘‘(ii) by a qualified resident of Taiwan 

18 who is not the entertainer or athlete per19 forming such activities. 

20 ‘‘(B) EXCEPTION.—Subparagraph (A) 

21 shall not apply if the person described in sub22 paragraph (A)(ii) is contractually authorized to 

23 designate the individual who is to perform such 

24 activities. 


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1 ‘‘(5) SPECIAL RULE WITH RESPECT TO CER2 TAIN AMOUNTS.—Paragraph (1) shall not apply to 

3 any income which is wages, salaries, or similar re4 muneration with respect to employment or with re5 spect to any amount which is described in subsection 

6 (a)(2)(B)(ii). 

7 ‘‘(c) QUALIFIED RESIDENT OF TAIWAN.—For pur8 poses of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified resi10 dent of Taiwan’ means any person who— 

11 ‘‘(A) is liable to tax under the laws of Tai12 wan by reason of such person’s domicile, resi13 dence, place of management, place of incorpora14 tion, or any similar criterion, 

15 ‘‘(B) is not a United States person (deter16 mined without regard to paragraph (3)(E)), 

17 and 

18 ‘‘(C) in the case of an entity taxed as a 

19 corporation in Taiwan, meets the requirements 

20 of paragraph (2). 

21 ‘‘(2) LIMITATION ON BENEFITS FOR COR22 PORATE ENTITIES OF TAIWAN.— 

23 ‘‘(A) IN GENERAL.—Subject to subpara24 graphs (E) and (F), an entity meets the re25 quirements of this paragraph only if it— 


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1 ‘‘(i) meets the ownership and income 

2 requirements of subparagraph (B), 

3 ‘‘(ii) meets the publicly traded re4 quirements of subparagraph (C), or 

5 ‘‘(iii) meets the qualified subsidiary 

6 requirements of subparagraph (D). 

7 ‘‘(B) OWNERSHIP AND INCOME REQUIRE8 MENTS.—The requirements of this subpara9 graph are met for an entity if— 

10 ‘‘(i) at least 50 percent (by vote and 

11 value) of the total outstanding shares of 

12 stock in such entity are owned directly or 

13 indirectly by qualified residents of Taiwan, 

14 and 

15 ‘‘(ii) less than 50 percent of such enti16 ty’s gross income (and in the case of an 

17 entity that is a member of a tested group, 

18 less than 50 percent of the tested group’s 

19 gross income) is paid or accrued, directly 

20 or indirectly, in the form of payments that 

21 are deductible for purposes of the income 

22 taxes imposed by Taiwan, to persons who 

23 are not— 

24 ‘‘(I) qualified residents of Tai25 wan, or 


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1 ‘‘(II) United States persons who 

2 meet such requirements with respect 

3 to the United States as determined by 

4 the Secretary to be equivalent to the 

5 requirements of this subsection (deter6 mined without regard to paragraph 

7 (1)(B)) with respect to residents of 

8 Taiwan. 

9 ‘‘(C) PUBLICLY TRADED REQUIRE10 MENTS.—An entity meets the requirements of 

11 this subparagraph if— 

12 ‘‘(i) the principal class of its shares 

13 (and any disproportionate class of shares) 

14 of such entity are primarily and regularly 

15 traded on an established securities market 

16 in Taiwan, or 

17 ‘‘(ii) the primary place of manage18 ment and control of the entity is in Taiwan 

19 and all classes of its outstanding shares 

20 described in clause (i) are regularly traded 

21 on an established securities market in Tai22 wan. 

23 ‘‘(D) QUALIFIED SUBSIDIARY REQUIRE24 MENTS.—An entity meets the requirement of 

25 this subparagraph if— 


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1 ‘‘(i) at least 50 percent (by vote and 

2 value) of the total outstanding shares of 

3 the stock of such entity are owned directly 

4 or indirectly by 5 or fewer entities— 

5 ‘‘(I) which meet the requirements 

6 of subparagraph (C), or 

7 ‘‘(II) which are United States 

8 persons the principal class of the 

9 shares (and any disproportionate class 

10 of shares) of which are primarily and 

11 regularly traded on an established se12 curities market in the United States, 

13 and 

14 ‘‘(ii) the entity meets the require15 ments of clause (ii) of subparagraph (B). 

16 ‘‘(E) ONLY INDIRECT OWNERSHIP

17 THROUGH QUALIFYING INTERMEDIARIES

18 COUNTED.— 

19 ‘‘(i) IN GENERAL.—Stock in an entity 

20 owned by a person indirectly through 1 or 

21 more other persons shall not be treated as 

22 owned by such person in determining 

23 whether the person meets the requirements 

24 of subparagraph (B)(i) or (D)(i) unless all 


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1 such other persons are qualifying inter2 mediate owners. 

3 ‘‘(ii) QUALIFYING INTERMEDIATE

4 OWNERS.—The term ‘qualifying inter5 mediate owner’ means a person that is— 

6 ‘‘(I) a qualified resident of Tai7 wan, or 

8 ‘‘(II) a resident of any other for9 eign country (other than a foreign 

10 country that is a foreign country of 

11 concern) that has in effect a com12 prehensive convention with the United 

13 States for the avoidance of double tax14 ation. 

15 ‘‘(iii) SPECIAL RULE FOR QUALIFIED

16 SUBSIDIARIES.—For purposes of applying 

17 subparagraph (D)(i), the term ‘qualifying 

18 intermediate owner’ shall include any per19 son who is a United States person who 

20 meets such requirements with respect to 

21 the United States as determined by the 

22 Secretary to be equivalent to the require23 ments of this subsection (determined with24 out regard to paragraph (1)(B)) with re25 spect to residents of Taiwan. 


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1 ‘‘(F) CERTAIN PAYMENTS NOT IN2 CLUDED.—In determining whether the require3 ments of subparagraph (B)(ii) or (D)(ii) are 

4 met with respect to an entity, the following pay5 ments shall not be taken into account: 

6 ‘‘(i) Arm’s-length payments by the en7 tity in the ordinary course of business for 

8 services or tangible property. 

9 ‘‘(ii) In the case of a tested group, 

10 intra-group transactions. 

11 ‘‘(3) DUAL RESIDENTS.— 

12 ‘‘(A) RULES FOR DETERMINATION OF STA13 TUS.— 

14 ‘‘(i) IN GENERAL.—An individual who 

15 is an applicable dual resident and who is 

16 described in subparagraph (B), (C), or (D) 

17 shall be treated as a qualified resident of 

18 Taiwan. 

19 ‘‘(ii) APPLICABLE DUAL RESIDENT.— 

20 For purposes of this paragraph, the term 

21 ‘applicable dual resident’ means an indi22 vidual who— 

23 ‘‘(I) is not a United States cit24 izen, 


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1 ‘‘(II) is a resident of the United 

2 States (determined without regard to 

3 subparagraph (E)), and 

4 ‘‘(III) would be a qualified resi5 dent of Taiwan but for paragraph 

6 (1)(B). 

7 ‘‘(B) PERMANENT HOME.—An individual 

8 is described in this subparagraph if such indi9 vidual— 

10 ‘‘(i) has a permanent home available 

11 to such individual in Taiwan, and 

12 ‘‘(ii) does not have a permanent home 

13 available to such individual in the United 

14 States. 

15 ‘‘(C) CENTER OF VITAL INTERESTS.—An 

16 individual is described in this subparagraph if— 

17 ‘‘(i) such individual has a permanent 

18 home available to such individual in both 

19 Taiwan and the United States, and 

20 ‘‘(ii) such individual’s personal and 

21 economic relations (center of vital inter22 ests) are closer to Taiwan than to the 

23 United States. 

24 ‘‘(D) HABITUAL ABODE.—An individual is 

25 described in this subparagraph if— 


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1 ‘‘(i) such individual— 

2 ‘‘(I) does not have a permanent 

3 home available to such individual in 

4 either Taiwan or the United States, or 

5 ‘‘(II) has a permanent home 

6 available to such individual in both 

7 Taiwan and the United States but 

8 such individual’s center of vital inter9 ests under subparagraph (C)(ii) can10 not be determined, and 

11 ‘‘(ii) such individual has a habitual 

12 abode in Taiwan and not the United 

13 States. 

14 ‘‘(E) UNITED STATES TAX TREATMENT OF

15 QUALIFIED RESIDENT OF TAIWAN.—Notwith16 standing section 7701, an individual who is 

17 treated as a qualified resident of Taiwan by 

18 reason of this paragraph for all or any portion 

19 of a taxable year shall not be treated as a resi20 dent of the United States for purposes of com21 puting such individual’s United States income 

22 tax liability for such taxable year or portion 

23 thereof. 

24 ‘‘(4) RULES OF SPECIAL APPLICATION.— 


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1 ‘‘(A) DIVIDENDS.—For purposes of apply2 ing this section to any dividend, paragraph 

3 (2)(D) shall be applied without regard to clause 

4 (ii) thereof. 

5 ‘‘(B) ITEMS OF INCOME EMANATING FROM

6 AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 

7 For purposes of this section— 

8 ‘‘(i) IN GENERAL.—Notwithstanding 

9 the preceding paragraphs of this sub10 section, if an entity taxed as a corporation 

11 in Taiwan is not a qualified resident of 

12 Taiwan but meets the requirements of sub13 paragraphs (A) and (B) of paragraph (1), 

14 any qualified item of income such entity 

15 derived from the United States shall be 

16 treated as income of a qualified resident of 

17 Taiwan. 

18 ‘‘(ii) QUALIFIED ITEMS OF INCOME.— 

19 ‘‘(I) IN GENERAL.—The term 

20 ‘qualified item of income’ means any 

21 item of income which emanates from, 

22 or is incidental to, the conduct of an 

23 active trade or business in Taiwan 

24 (other than operating as a holding 

25 company, providing overall supervision 


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1 or administration of a group of com2 panies, providing group financing, or 

3 making or managing investments (un4 less such making or managing invest5 ments is carried on by a bank, insur6 ance company, or registered securities 

7 dealer in the ordinary course of its 

8 business as such)). 

9 ‘‘(II) SUBSTANTIAL ACTIVITY RE10 QUIREMENT.—An item of income 

11 which is derived from a trade or busi12 ness conducted in the United States 

13 or from a connected person shall be a 

14 qualified item of income only if the 

15 trade or business activity conducted in 

16 Taiwan to which the item is related is 

17 substantial in relation to the same or 

18 a complementary trade or business ac19 tivity carried on in the United States. 

20 For purposes of applying this sub21 clause, activities conducted by persons 

22 that are connected to the entity de23 scribed in clause (i) shall be deemed 

24 to be conducted by such entity. 


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1 ‘‘(iii) EXCEPTION.—This subpara2 graph shall not apply to any item of in3 come derived by an entity if at least 50 

4 percent (by vote or value) of such entity is 

5 owned (directly or indirectly) or controlled 

6 by residents of a foreign country of con7 cern. 

8 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

9 For purposes of this section— 

10 ‘‘(1) UNITED STATES PERMANENT ESTABLISH11 MENT.— 

12 ‘‘(A) IN GENERAL.—The term ‘United 

13 States permanent establishment’ means, with 

14 respect to a qualified resident of Taiwan, a per15 manent establishment of such resident which is 

16 within the United States. 

17 ‘‘(B) SPECIAL RULE.—The determination 

18 of whether there is a permanent establishment 

19 of a qualified resident of Taiwan within the 

20 United States shall be made without regard to 

21 whether an entity which is taxed as a corpora22 tion in Taiwan and which is a qualified resident 

23 of Taiwan controls or is controlled by— 

24 ‘‘(i) a domestic corporation, or 


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1 ‘‘(ii) any other person that carries on 

2 business in the United States (whether 

3 through a permanent establishment or oth4 erwise). 

5 ‘‘(2) PERMANENT ESTABLISHMENT.— 

6 ‘‘(A) IN GENERAL.—The term ‘permanent 

7 establishment’ means a fixed place of business 

8 through which a trade or business is wholly or 

9 partly carried on. Such term shall include— 

10 ‘‘(i) a place of management, 

11 ‘‘(ii) a branch, 

12 ‘‘(iii) an office, 

13 ‘‘(iv) a factory, 

14 ‘‘(v) a workshop, and 

15 ‘‘(vi) a mine, an oil or gas well, a 

16 quarry, or any other place of extraction of 

17 natural resources. 

18 ‘‘(B) SPECIAL RULES FOR CERTAIN TEM19 PORARY PROJECTS.— 

20 ‘‘(i) IN GENERAL.—A building site or 

21 construction or installation project, or an 

22 installation or drilling rig or ship used for 

23 the exploration or exploitation of the sea 

24 bed and its subsoil and their natural re25 sources, constitutes a permanent establishVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 ment only if it lasts, or the activities of the 

2 rig or ship lasts, for more than 12 months. 

3 ‘‘(ii) DETERMINATION OF 12-MONTH

4 PERIOD.—For purposes of clause (i), the 

5 period over which a building site or con6 struction or installation project of a person 

7 lasts shall include any period of more than 

8 30 days during which such person does not 

9 carry on activities at such building site or 

10 construction or installation project but 

11 connected activities are carried on at such 

12 building site or construction or installation 

13 project by one or more connected persons. 

14 ‘‘(C) HABITUAL EXERCISE OF CONTRACT

15 AUTHORITY TREATED AS PERMANENT ESTAB16 LISHMENT.—Notwithstanding subparagraphs 

17 (A) and (B), where a person (other than an 

18 agent of an independent status to whom sub19 paragraph (D)(ii) applies) is acting on behalf of 

20 a trade or business of a qualified resident of 

21 Taiwan and has and habitually exercises an au22 thority to conclude contracts that are binding 

23 on the trade or business, that trade or business 

24 shall be deemed to have a permanent establish25 ment in the country in which such authority is 


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1 exercised in respect of any activities that the 

2 person undertakes for the trade or business, un3 less the activities of such person are limited to 

4 those described in subparagraph (D)(i) that, if 

5 exercised through a fixed place of business, 

6 would not make this fixed place of business a 

7 permanent establishment under the provisions 

8 of that subparagraph. 

9 ‘‘(D) EXCLUSIONS.— 

10 ‘‘(i) IN GENERAL.—Notwithstanding 

11 subparagraphs (A) and (B), the term ‘per12 manent establishment’ shall not include— 

13 ‘‘(I) the use of facilities solely for 

14 the purpose of storage, display, or de15 livery of goods or merchandise belong16 ing to the trade or business, 

17 ‘‘(II) the maintenance of a stock 

18 of goods or merchandise belonging to 

19 the trade or business solely for the 

20 purpose of storage, display, or deliv21 ery, 

22 ‘‘(III) the maintenance of a stock 

23 of goods or merchandise belonging to 

24 the trade or business solely for the 


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1 purpose of processing by another 

2 trade or business, 

3 ‘‘(IV) the maintenance of a fixed 

4 place of business solely for the pur5 pose of purchasing goods or merchan6 dise, or of collecting information, for 

7 the trade or business, 

8 ‘‘(V) the maintenance of a fixed 

9 place of business solely for the pur10 pose of carrying on, for the trade or 

11 business, any other activity of a pre12 paratory or auxiliary character, or 

13 ‘‘(VI) the maintenance of a fixed 

14 place of business solely for any com15 bination of the activities mentioned in 

16 subclauses (I) through (V), provided 

17 that the overall activity of the fixed 

18 place of business resulting from this 

19 combination is of a preparatory or 

20 auxiliary character. 

21 ‘‘(ii) BROKERS AND OTHER INDE22 PENDENT AGENTS.—A trade or business 

23 shall not be considered to have a perma24 nent establishment in a country merely be25 cause it carries on business in such counVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 try through a broker, general commission 

2 agent, or any other agent of an inde3 pendent status, provided that such persons 

4 are acting in the ordinary course of their 

5 business as independent agents. 

6 ‘‘(3) TESTED GROUP.—The term ‘tested group’ 

7 includes, with respect to any entity taxed as a cor8 poration in Taiwan, such entity and any other entity 

9 taxed as a corporation in Taiwan that— 

10 ‘‘(A) participates as a member with such 

11 entity in a tax consolidation, fiscal unity, or 

12 similar regime that requires members of the 

13 group to share profits or losses, or 

14 ‘‘(B) shares losses with such entity pursu15 ant to a group relief or other loss sharing re16 gime. 

17 ‘‘(4) CONNECTED PERSON.—Two persons shall 

18 be ‘connected persons’ if one owns, directly or indi19 rectly, at least 50 percent of the interests in the 

20 other (or, in the case of a corporation, at least 50 

21 percent of the aggregate vote and value of the cor22 poration’s shares) or another person owns, directly 

23 or indirectly, at least 50 percent of the interests (or, 

24 in the case of a corporation, at least 50 percent of 

25 the aggregate vote and value of the corporation’s 


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1 shares) in each person. In any case, a person shall 

2 be connected to another if, based on all the relevant 

3 facts and circumstances, one has control of the other 

4 or both are under the control of the same person or 

5 persons. 

6 ‘‘(5) FOREIGN COUNTRY OF CONCERN.—The 

7 term ‘foreign country of concern’ has the meaning 

8 given such term under paragraph (7) of section 

9 9901 of the William M. (Mac) Thornberry National 

10 Defense Authorization Act for Fiscal Year 2021 (15 

11 U.S.C. 4651(7)), as added by section 103(a)(4) of 

12 the CHIPS Act of 2022). 

13 ‘‘(6) PARTNERSHIPS; BENEFICIARIES OF ES14 TATES AND TRUSTS.—For purposes of this section— 

15 ‘‘(A) a qualified resident of Taiwan which 

16 is a partner of a partnership which carries on 

17 a trade or business within the United States 

18 through a United States permanent establish19 ment shall be treated as carrying on such trade 

20 or business through such permanent establish21 ment, and 

22 ‘‘(B) a qualified resident of Taiwan which 

23 is a beneficiary of an estate or trust which car24 ries on a trade or business within the United 

25 States through a United States permanent esVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 tablishment shall be treated as carrying on such 

2 trade or business through such permanent es3 tablishment. 

4 ‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY5 MENTS THROUGH HYBRID ENTITIES.—For purposes 

6 of this section, rules similar to the rules of section 

7 894(c) shall apply. 

8 ‘‘(e) APPLICATION.— 

9 ‘‘(1) IN GENERAL.—This section shall not apply 

10 to any period unless the Secretary has determined 

11 that Taiwan has provided benefits to United States 

12 persons for such period that are reciprocal to the 

13 benefits provided to qualified residents of Taiwan 

14 under this section. 

15 ‘‘(2) PROVISION OF RECIPROCITY.—The Presi16 dent or his designee is authorized to exchange let17 ters, enter into an agreement, or take other nec18 essary and appropriate steps relative to Taiwan for 

19 the reciprocal provision of the benefits described in 

20 this section. 

21 ‘‘(f) REGULATIONS OR OTHER GUIDANCE.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall issue 

23 such regulations or other guidance as may be nec24 essary or appropriate to carry out the provisions of 


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1 this section, including such regulations or guidance 

2 for— 

3 ‘‘(A) determining— 

4 ‘‘(i) what constitutes a United States 

5 permanent establishment of a qualified 

6 resident of Taiwan, and 

7 ‘‘(ii) income that is effectively con8 nected with such a permanent establish9 ment, 

10 ‘‘(B) preventing the abuse of the provisions 

11 of this section by persons who are not (or who 

12 should not be treated as) qualified residents of 

13 Taiwan, 

14 ‘‘(C) requirements for record keeping and 

15 reporting, 

16 ‘‘(D) rules to assist withholding agents or 

17 employers in determining whether a foreign per18 son is a qualified resident of Taiwan for pur19 poses of determining whether withholding or re20 porting is required for a payment (and, if with21 holding is required, whether it should be applied 

22 at a reduced rate), 

23 ‘‘(E) the application of subsection 

24 (a)(1)(D)(i) to stock held by predecessor own25 ers, 


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1 ‘‘(F) determining what amounts are to be 

2 treated as qualified wages for purposes of sub3 section (a)(2), 

4 ‘‘(G) determining the amounts to which 

5 subsection (a)(3) applies, 

6 ‘‘(H) defining established securities market 

7 for purposes of subsection (c), 

8 ‘‘(I) the application of the rules of sub9 section (c)(4)(B), 

10 ‘‘(J) the application of subsection (d)(6) 

11 and section 1446, 

12 ‘‘(K) determining ownership interests held 

13 by residents of a foreign country of concern, 

14 and 

15 ‘‘(L) determining the starting and ending 

16 dates for periods with respect to the application 

17 of this section under subsection (e), which may 

18 be separate dates for taxes withheld at the 

19 source and other taxes. 

20 ‘‘(2) REGULATIONS TO BE CONSISTENT WITH

21 MODEL TREATY.—Any regulations or other guidance 

22 issued under this section shall, to the extent prac23 tical, be consistent with the provisions of the United 

24 States model income tax convention dated February 

25 7, 2016.’’. 


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1 (b) CONFORMING AMENDMENT TO WITHHOLDING

2 TAX.—Subchapter A of chapter 3 is amended by adding 

3 at the end the following new section: 

4 ‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 

5 TAIWAN. 

6 ‘‘For reduced rates of withholding for certain resi7 dents of Taiwan, see section 894A.’’. 

8 (c) CLERICAL AMENDMENTS.— 

9 (1) The table of sections for subpart D of part 

10 II of subchapter N of chapter 1 is amended by in11 serting after the item relating to section 894 the fol12 lowing new item: 

‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 

13 (2) The table of sections for subchapter A of 

14 chapter 3 is amended by adding at the end the fol15 lowing new item: 

‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 

16 Subtitle B—United States-Taiwan 

17 Tax Agreement Authorization Act 

18 SEC. 311. SHORT TITLE. 

19 This subtitle may be cited as the ‘‘United States-Tai20 wan Tax Agreement Authorization Act’’. 

21 SEC. 312. DEFINITIONS. 

22 In this subtitle: 


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1 (1) AGREEMENT.—The term ‘‘Agreement’’ 

2 means the tax agreement authorized by section 

3 313(a). 

4 (2) APPROPRIATE CONGRESSIONAL COMMIT5 TEES.—The term ‘‘appropriate congressional com6 mittees’’ means— 

7 (A) the Committee on Foreign Relations 

8 and the Committee on Finance of the Senate; 

9 and 

10 (B) the Committee on Ways and Means of 

11 the House of Representatives. 

12 (3) APPROVAL LEGISLATION.—The term ‘‘ap13 proval legislation’’ means legislation that approves 

14 the Agreement. 

15 (4) IMPLEMENTING LEGISLATION.—The term 

16 ‘‘implementing legislation’’ means legislation that 

17 makes any changes to the Internal Revenue Code of 

18 1986 necessary to implement the Agreement. 

19 SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER 

20 INTO AGREEMENT. 

21 (a) IN GENERAL.—Subsequent to a determination 

22 under section 894A(e)(1) of the Internal Revenue Code 

23 of 1986 (as added by the United States-Taiwan Expedited 

24 Double-Tax Relief Act), the President is authorized to ne25 gotiate and enter into a tax agreement relative to Taiwan. 


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1 (b) ELEMENTS OF AGREEMENT.— 

2 (1) CONFORMITY WITH BILATERAL INCOME TAX

3 CONVENTIONS.—The President shall ensure that— 

4 (A) any provisions included in the Agree5 ment conform with provisions customarily con6 tained in United States bilateral income tax 

7 conventions, as exemplified by the 2016 United 

8 States Model Income Tax Convention; and 

9 (B) the Agreement does not include ele10 ments outside the scope of the 2016 United 

11 States Model Income Tax Convention. 

12 (2) INCORPORATION OF TAX AGREEMENTS AND

13 LAWS.—Notwithstanding paragraph (1), the Agree14 ment may incorporate and restate provisions of any 

15 agreement, or existing United States law, addressing 

16 double taxation for residents of the United States 

17 and Taiwan. 

18 (3) AUTHORITY.—The Agreement shall include 

19 the following statement: ‘‘The Agreement is entered 

20 into pursuant to the United States-Taiwan Tax 

21 Agreement Authorization Act.’’ 

22 (4) ENTRY INTO FORCE.—The Agreement shall 

23 include a provision conditioning entry into force 

24 upon— 


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1 (A) enactment of approval legislation and 

2 implementing legislation pursuant to section 

3 317; and 

4 (B) confirmation by the Secretary of the 

5 Treasury that the relevant authority in Taiwan 

6 has approved and taken appropriate steps re7 quired to implement the Agreement. 

8 SEC. 314. CONSULTATIONS WITH CONGRESS. 

9 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO10 TIATIONS.—The President shall provide written notifica11 tion to the appropriate congressional committees of the 

12 commencement of negotiations between the United States 

13 and Taiwan on the Agreement at least 15 calendar days 

14 before commencing such negotiations. 

15 (b) CONSULTATIONS DURING NEGOTIATIONS.— 

16 (1) BRIEFINGS.—Not later than 90 days after 

17 commencement of negotiations with respect to the 

18 Agreement, and every 180 days thereafter until the 

19 President enters into the Agreement, the President 

20 shall provide a briefing to the appropriate congres21 sional committees on the status of the negotiations, 

22 including a description of elements under negotia23 tion. 

24 (2) MEETINGS AND OTHER CONSULTATIONS.— 


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1 (A) IN GENERAL.—In the course of nego2 tiations with respect to the Agreement, the Sec3 retary of the Treasury, in coordination with the 

4 Secretary of State, shall— 

5 (i) meet, upon request, with the chair6 man or ranking member of any of the ap7 propriate congressional committees regard8 ing negotiating objectives and the status of 

9 negotiations in progress; and 

10 (ii) consult closely and on a timely 

11 basis with, and keep fully apprised of the 

12 negotiations, the appropriate congressional 

13 committees. 

14 (B) ELEMENTS OF CONSULTATIONS.—The 

15 consultations described in subparagraph (A) 

16 shall include consultations with respect to— 

17 (i) the nature of the contemplated 

18 Agreement; 

19 (ii) how and to what extent the con20 templated Agreement is consistent with the 

21 elements set forth in section 313(b); and 

22 (iii) the implementation of the con23 templated Agreement, including— 

24 (I) the general effect of the con25 templated Agreement on existing laws; 


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1 (II) proposed changes to any ex2 isting laws to implement the con3 templated Agreement; and 

4 (III) proposed administrative ac5 tions to implement the contemplated 

6 Agreement. 

7 SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREE8 MENT. 

9 (a) IN GENERAL.—The Agreement may not enter 

10 into force unless— 

11 (1) the President, at least 60 days before the 

12 day on which the President enters into the Agree13 ment, publishes the text of the contemplated Agree14 ment on a publicly available website of the Depart15 ment of the Treasury; and 

16 (2) there is enacted into law, with respect to 

17 the Agreement, approval legislation and imple18 menting legislation pursuant to section 317. 

19 (b) ENTRY INTO FORCE.—The President may pro20 vide for the Agreement to enter into force upon— 

21 (1) enactment of approval legislation and imple22 menting legislation pursuant to section 317; and 

23 (2) confirmation by the Secretary of the Treas24 ury that the relevant authority in Taiwan has apVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 proved and taken appropriate steps required to im2 plement the Agreement. 

3 SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND 

4 IMPLEMENTATION POLICY. 

5 (a) SUBMISSION OF AGREEMENT.—Not later than 

6 270 days after the President enters into the Agreement, 

7 the President or the President’s designee shall submit to 

8 Congress— 

9 (1) the final text of the Agreement; and 

10 (2) a technical explanation of the Agreement. 

11 (b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 

12 later than 270 days after the President enters into the 

13 Agreement, the Secretary of the Treasury shall submit to 

14 Congress— 

15 (1) a description of those changes to existing 

16 laws that the President considers would be required 

17 in order to ensure that the United States acts in a 

18 manner consistent with the Agreement; and 

19 (2) a statement of anticipated administrative 

20 action proposed to implement the Agreement. 

21 SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION 

22 AND IMPLEMENTING LEGISLATION. 

23 (a) IN GENERAL.—The approval legislation with re24 spect to the Agreement shall include the following: ‘‘Con25 gress approves the Agreement submitted to Congress purVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 suant to section 316 of the United States-Taiwan Tax 

2 Agreement Authorization Act on llll.’’, with the 

3 blank space being filled with the appropriate date. 

4 (b) APPROVAL LEGISLATION COMMITTEE REFER5 RAL.—The approval legislation shall— 

6 (1) in the Senate, be referred to the Committee 

7 on Foreign Relations; and 

8 (2) in the House of Representaives, be referred 

9 to the Committee on Ways and Means. 

10 (c) IMPLEMENTING LEGISLATION COMMITTEE RE11 FERRAL.—The implementing legislation shall— 

12 (1) in the Senate, be referred to the Committee 

13 on Finance; and 

14 (2) in the House of Representatives, be referred 

15 to the Committee on Ways and Means. 

16 SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL 

17 REVENUE CODE OF 1986. 

18 (a) INTERNAL REVENUE CODE OF 1986 TO CON19 TROL.—No provision of the Agreement or approval legisla20 tion, nor the application of any such provision to any per21 son or circumstance, which is inconsistent with any provi22 sion of the Internal Revenue Code of 1986, shall have ef23 fect. 

24 (b) CONSTRUCTION.—Nothing in this subtitle shall 

25 be construed— 


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1 (1) to amend or modify any law of the United 

2 States; or 

3 (2) to limit any authority conferred under any 

4 law of the United States, 

5 unless specifically provided for in this subtitle. 

6 SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREE7 MENTS RELATIVE TO TAIWAN. 

8 (a) IN GENERAL.—Subsequent to the enactment of 

9 approval legislation and implementing legislation pursuant 

10 to section 317— 

11 (1) the term ‘‘tax agreement’’ in section 313(a) 

12 shall be treated as including any tax agreement rel13 ative to Taiwan which supplements or supersedes 

14 the Agreement to which such approval legislation 

15 and implementing legislation relates, and 

16 (2) the term ‘‘Agreement’’ shall be treated as 

17 including such tax agreement. 

18 (b) REQUIREMENTS, ETC., TO APPLY SEPA19 RATELY.—The provisions of this subtitle (including sec20 tion 314) shall be applied separately with respect to each 

21 tax agreement referred to in subsection (a). 

22 SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAX23 ATION MATTERS WITH RESPECT TO TAIWAN. 

24 (a) FINDINGS.—Congress makes the following find25 ings: 


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1 (1) The United States addresses issues with re2 spect to double taxation with foreign countries by 

3 entering into bilateral income tax conventions 

4 (known as tax treaties) with such countries, subject 

5 to the advice and consent of the Senate to ratifica6 tion pursuant to article II of the Constitution. 

7 (2) The United States has entered into more 

8 than sixty such tax treaties, which facilitate eco9 nomic activity, strengthen bilateral cooperation, and 

10 benefit United States workers, businesses, and other 

11 United States taxpayers. 

12 (3) Due to Taiwan’s unique status, the United 

13 States is unable to enter into an article II tax treaty 

14 with Taiwan, necessitating an agreement to address 

15 issues with respect to double taxation. 

16 (b) STATEMENT OF POLICY.—It is the policy of the 

17 United States to— 

18 (1) provide for additional bilateral tax relief 

19 with respect to Taiwan, beyond that provided for in 

20 section 894A of the Internal Revenue Code of 1986 

21 (as added by the United States-Taiwan Expedited 

22 Double-Tax Relief Act), only after entry into force 

23 of an Agreement, as provided for in section 315, and 

24 only in a manner consistent with such Agreement; 

25 and 


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1 (2) continue to provide for bilateral tax relief 

2 with sovereign states to address double taxation and 

3 other related matters through entering into bilateral 

4 income tax conventions, subject to the Senate’s ad5 vice and consent to ratification pursuant to article II 

6 of the Constitution. 

7 TITLE IV—ASSISTANCE FOR DIS8 ASTER-IMPACTED COMMU9 NITIES 

10 SEC. 401. SHORT TITLE. 

11 This title may be cited as the ‘‘Federal Disaster Tax 

12 Relief Act of 2024’’. 

13 SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CER14 TAIN DISASTER-RELATED PERSONAL CAS15 UALTY LOSSES. 

16 For purposes of applying section 304(b) of the Tax17 payer Certainty and Disaster Tax Relief Act of 2020, sec18 tion 301 of such Act shall be applied by substituting ‘‘the 

19 Federal Disaster Tax Relief Act of 2024’’ for ‘‘this Act’’ 

20 each place it appears. 

21 SEC. 403. EXCLUSION FROM GROSS INCOME FOR COM22 PENSATION FOR LOSSES OR DAMAGES RE23 SULTING FROM CERTAIN WILDFIRES. 

24 (a) IN GENERAL.—For purposes of the Internal Rev25 enue Code of 1986, gross income shall not include any 


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1 amount received by an individual as a qualified wildfire 

2 relief payment. 

3 (b) QUALIFIED WILDFIRE RELIEF PAYMENT.—For 

4 purposes of this section— 

5 (1) IN GENERAL.—The term ‘‘qualified wildfire 

6 relief payment’’ means any amount received by or on 

7 behalf of an individual as compensation for losses, 

8 expenses, or damages (including compensation for 

9 additional living expenses, lost wages (other than 

10 compensation for lost wages paid by the employer 

11 which would have otherwise paid such wages), per12 sonal injury, death, or emotional distress) incurred 

13 as a result of a qualified wildfire disaster, but only 

14 to the extent the losses, expenses, or damages com15 pensated by such payment are not compensated for 

16 by insurance or otherwise. 

17 (2) QUALIFIED WILDFIRE DISASTER.—The 

18 term ‘‘qualified wildfire disaster’’ means any feder19 ally declared disaster (as defined in section 

20 165(i)(5)(A) of the Internal Revenue Code of 1986) 

21 declared, after December 31, 2014, as a result of 

22 any forest or range fire. 

23 (c) DENIAL OF DOUBLE BENEFIT.—Notwith24 standing any other provision of the Internal Revenue Code 

25 of 1986— 


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1 (1) no deduction or credit shall be allowed (to 

2 the person for whose benefit a qualified wildfire re3 lief payment is made) for, or by reason of, any ex4 penditure to the extent of the amount excluded 

5 under this section with respect to such expenditure, 

6 and 

7 (2) no increase in the basis or adjusted basis of 

8 any property shall result from any amount excluded 

9 under this subsection with respect to such property. 

10 (d) LIMITATION ON APPLICATION.—This section 

11 shall only apply to qualified wildfire relief payments re12 ceived by the individual during taxable years beginning 

13 after December 31, 2019, and before January 1, 2026. 

14 SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS. 

15 (a) DISASTER RELIEF PAYMENTS TO VICTIMS OF

16 EAST PALESTINE TRAIN DERAILMENT.—East Palestine 

17 train derailment payments shall be treated as qualified 

18 disaster relief payments for purposes of section 139(b) of 

19 the Internal Revenue Code of 1986. 

20 (b) EAST PALESTINE TRAIN DERAILMENT PAY21 MENTS.—For purposes of this section, the term ‘‘East 

22 Palestine train derailment payment’’ means any amount 

23 received by or on behalf of an individual as compensation 

24 for loss, damages, expenses, loss in real property value, 

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1 tor commissions), or inconvenience (including access to 

2 real property) resulting from the East Palestine train de3 railment if such amount was provided by— 

4 (1) a Federal, State, or local government agen5 cy, 

6 (2) Norfolk Southern Railway, or 

7 (3) any subsidiary, insurer, or agent of Norfolk 

8 Southern Railway or any related person. 

9 (c) TRAIN DERAILMENT.—For purposes of this sec10 tion, the term ‘‘East Palestine train derailment’’ means 

11 the derailment of a train in East Palestine, Ohio, on Feb12 ruary 3, 2023. 

13 (d) EFFECTIVE DATE.—This section shall apply to 

14 amounts received on or after February 3, 2023. 

15 TITLE V—MORE AFFORDABLE 

16 HOUSING 

17 SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR 

18 LOW-INCOME HOUSING CREDIT. 

19 (a) IN GENERAL.—Section 42(h)(3)(I) is amended— 

20 (1) by striking ‘‘and 2021,’’ and inserting 

21 ‘‘2021, 2023, 2024, and 2025,’’, and 

22 (2) by striking ‘‘2018, 2019, 2020, AND 2021’’ in 

23 the heading and inserting ‘‘CERTAIN CALENDAR

24 YEARS’’. 


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

2 this section shall apply to calendar years after 2022. 

3 SEC. 502. TAX-EXEMPT BOND FINANCING REQUIREMENT. 

4 (a) IN GENERAL.—Section 42(h)(4) is amended by 

5 striking subparagraph (B) and inserting the following: 

6 ‘‘(B) SPECIAL RULE WHERE MINIMUM

7 PERCENT OF BUILDINGS IS FINANCED WITH

8 TAX-EXEMPT BONDS SUBJECT TO VOLUME

9 CAP.—For purposes of subparagraph (A), para10 graph (1) shall not apply to any portion of the 

11 credit allowable under subsection (a) with re12 spect to a building if— 

13 ‘‘(i) 50 percent or more of the aggre14 gate basis of such building and the land on 

15 which the building is located is financed by 

16 1 or more obligations described in subpara17 graph (A), or 

18 ‘‘(ii)(I) 30 percent or more of the ag19 gregate basis of such building and the land 

20 on which the building is located is financed 

21 by 1 or more qualified obligations, and 

22 ‘‘(II) 1 or more of such qualified obli23 gations— 


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1 ‘‘(aa) are part of an issue the 

2 issue date of which is after December 

3 31, 2023, and 

4 ‘‘(bb) provide the financing for 

5 not less than 5 percent of the aggre6 gate basis of such building and the 

7 land on which the building is located. 

8 ‘‘(C) QUALIFIED OBLIGATION.—For pur9 poses of subparagraph (B)(ii), the term ‘quali10 fied obligation’ means an obligation which is de11 scribed in subparagraph (A) and which is part 

12 of an issue the issue date of which is before 

13 January 1, 2026.’’. 

14 (b) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—The amendment made by 

16 this section shall apply to buildings placed in service 

17 in taxable years beginning after December 31, 2023. 

18 (2) REHABILITATION EXPENDITURES TREATED

19 AS SEPARATE NEW BUILDING.—In the case of any 

20 building with respect to which any expenditures are 

21 treated as a separate new building under section 

22 42(e) of the Internal Revenue Code of 1986, for 

23 purposes of paragraph (1), both the existing building 

24 and the separate new building shall be treated as 

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1 penditures are treated as placed in service under 

2 section 42(e)(4) of such Code. 

3 TITLE VI—TAX ADMINISTRATION 

4 AND ELIMINATING FRAUD 

5 SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING IN6 FORMATION REPORTING WITH RESPECT TO 

7 CERTAIN PAYEES. 

8 (a) IN GENERAL.—Sections 6041(a) is amended by 

9 striking ‘‘$600’’ and inserting ‘‘$1,000’’. 

10 (b) INFLATION ADJUSTMENT.—Section 6041 is 

11 amended by adding at the end the following new sub12 section: 

13 ‘‘(h) INFLATION ADJUSTMENT.—In the case of any 

14 calendar year after 2024, the dollar amount in subsection 

15 (a) shall be increased by an amount equal to— 

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

17 ‘‘(2) the cost-of-living adjustment determined 

18 under section 1(f)(3) for such calendar year, deter19 mined by substituting ‘calendar year 2023’ for ‘cal20 endar year 2016’ in subparagraph (A)(ii) thereof. 

21 If any increase under the preceding sentence is not a mul22 tiple of $100, such increase shall be rounded to the nearest 

23 multiple of $100.’’. 


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1 (c) APPLICATION TO REPORTING ON REMUNERATION

2 FOR SERVICES AND DIRECT SALES.—Section 6041A is 

3 amended— 

4 (1) in subsection (a)(2), by striking ‘‘is $600 or 

5 more’’ and inserting ‘‘equals or exceeds the dollar 

6 amount in effect for such calendar year under sec7 tion 6041(a)’’, and 

8 (2) in subsection (b)(1)(B), by striking ‘‘is 

9 $5,000 or more’’ and inserting ‘‘equals or exceeds 

10 the dollar amount in effect for such calendar year 

11 under section 6041(a)’’. 

12 (d) APPLICATION TO BACKUP WITHHOLDING.—Sec13 tion 3406(b)(6) is amended— 

14 (1) by striking ‘‘$600’’ in subparagraph (A) 

15 and inserting ‘‘the dollar amount in effect for such 

16 calendar year under section 6041(a)’’, and 

17 (2) by striking ‘‘ONLY WHERE AGGREGATE FOR

18 CALENDAR YEAR IS $600 OR MORE’’ in the heading 

19 and inserting ‘‘ONLY IF IN EXCESS OF THRESHOLD’’. 

20 (e) CONFORMING AMENDMENTS.— 

21 (1) The heading of section 6041(a) is amended 

22 by striking ‘‘OF $600 OR MORE’’ and inserting ‘‘EX23 CEEDING THRESHOLD’’. 

24 (2) Section 6041(a) is amended by striking 

25 ‘‘taxable year’’ and inserting ‘‘calendar year’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply with respect to payments made 

3 after December 31, 2023. 

4 SEC. 602. ENFORCEMENT PROVISIONS WITH RESPECT TO 

5 COVID-RELATED EMPLOYEE RETENTION 

6 CREDITS. 

7 (a) INCREASE IN ASSESSABLE PENALTY ON COVID– 

8 ERTC PROMOTERS FOR AIDING AND ABETTING UNDER9 STATEMENTS OF TAX LIABILITY.—If any COVID–ERTC 

10 promoter is subject to penalty under section 6701(a) of 

11 the Internal Revenue Code of 1986 with respect to any 

12 COVID–ERTC document, notwithstanding paragraphs 

13 (1) and (2) of section 6701(b) of such Code, the amount 

14 of the penalty imposed under such section 6701(a) shall 

15 be the greater of— 

16 (1) $200,000 ($10,000, in the case of a natural 

17 person), or 

18 (2) 75 percent of the gross income derived (or 

19 to be derived) by such promoter with respect to the 

20 aid, assistance, or advice referred to in section 

21 6701(a)(1) of such Code with respect to such docu22 ment. 

23 (b) FAILURE TO COMPLY WITH DUE DILIGENCE RE24 QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES

25 OF ASSESSABLE PENALTY FOR AIDING AND ABETTING


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1 UNDERSTATEMENT OF TAX LIABILITY.—In the case of 

2 any COVID–ERTC promoter, the knowledge requirement 

3 of section 6701(a)(3) of the Internal Revenue Code of 

4 1986 shall be treated as satisfied with respect to any 

5 COVID–ERTC document with respect to which such pro6 moter provided aid, assistance, or advice, if such promoter 

7 fails to comply with the due diligence requirements re8 ferred to in subsection (c)(1). 

9 (c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY

10 WITH DUE DILIGENCE REQUIREMENTS.— 

11 (1) IN GENERAL.—Any COVID–ERTC pro12 moter which provides aid, assistance, or advice with 

13 respect to any COVID–ERTC document and which 

14 fails to comply with due diligence requirements im15 posed by the Secretary with respect to determining 

16 eligibility for, or the amount of, any COVID-related 

17 employee retention tax credit, shall pay a penalty of 

18 $1,000 for each such failure. 

19 (2) DUE DILIGENCE REQUIREMENTS.—Except 

20 as otherwise provided by the Secretary, the due dili21 gence requirements referred to in paragraph (1) 

22 shall be similar to the due diligence requirements 

23 imposed under section 6695(g). 

24 (3) RESTRICTION TO DOCUMENTS USED IN

25 CONNECTION WITH RETURNS OR CLAIMS FOR REVerDate Sep 11 2014 23:30 Jan 17, 2024 Jkt 049200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\H7024.IH H7024

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1 FUND.—Paragraph (1) shall not apply with respect 

2 to any COVID–ERTC document unless such docu3 ment constitutes, or relates to, a return or claim for 

4 refund. 

5 (4) TREATMENT AS ASSESSABLE PENALTY, 

6 ETC.—For purposes of the Internal Revenue Code of 

7 1986, the penalty imposed under paragraph (1) shall 

8 be treated in the same manner as a penalty imposed 

9 under section 6695(g). 

10 (5) SECRETARY.—For purposes of this sub11 section, the term ‘‘Secretary’’ means the Secretary 

12 of the Treasury or the Secretary’s delegate. 

13 (d) ASSESSABLE PENALTIES FOR FAILURE TO DIS14 CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.— 

15 For purposes of sections 6111, 6112, 6707 and 6708 of 

16 the Internal Revenue Code of 1986— 

17 (1) any COVID-Related employee retention tax 

18 credit (whether or not the taxpayer claims such 

19 COVID-Related employee retention tax credit) shall 

20 be treated as a listed transaction (and as a report21 able transaction) with respect to any COVID–ERTC 

22 promoter if such promoter provides any aid, assist23 ance, or advice with respect to any COVID–ERTC 

24 document relating to such COVID-related employee 

25 retention tax credit, and 


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1 (2) such COVID–ERTC promoter shall be 

2 treated as a material advisor with respect to such 

3 transaction. 

4 (e) COVID–ERTC PROMOTER.—For purposes of 

5 this section— 

6 (1) IN GENERAL.—The term ‘‘COVID–ERTC 

7 promoter’’ means, with respect to any COVID– 

8 ERTC document, any person which provides aid, as9 sistance, or advice with respect to such document 

10 if— 

11 (A) such person charges or receives a fee 

12 for such aid, assistance, or advice which is 

13 based on the amount of the refund or credit 

14 with respect to such document, or 

15 (B) with respect to such person’s taxable 

16 year in which such person provided such assist17 ance or the preceding taxable year— 

18 (i) the aggregate gross receipts of 

19 such person for aid, assistance, and advice 

20 with respect to all COVID–ERTC docu21 ments exceeds 50 percent of the gross re22 ceipts of such person for such taxable year, 

23 or 

24 (ii) both— 


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1 (I) such aggregate gross receipts 

2 exceeds 20 percent of the gross re3 ceipts of such person for such taxable 

4 year, and 

5 (II) the aggregate gross receipts 

6 of such person for aid, assistance, and 

7 advice with respect to all COVID– 

8 ERTC documents (determined after 

9 application of paragraph (3)) exceeds 

10 $500,000. 

11 (2) EXCEPTION FOR CERTIFIED PROFESSIONAL

12 EMPLOYER ORGANIZATIONS.—The term ‘‘COVID– 

13 ERTC promoter’’ shall not include a certified profes14 sional employer organization (as defined in section 

15 7705). 

16 (3) AGGREGATION RULE.—For purposes of 

17 paragraph (1)(B)(ii)(II), all persons treated as a 

18 single employer under subsection (a) or (b) of sec19 tion 52 of the Internal Revenue Code of 1986, or 

20 subsection (m) or (o) of section 414 of such Code, 

21 shall be treated as 1 person. 

22 (4) SHORT TAXABLE YEARS.—In the case of 

23 any taxable year of less than 12 months, paragraph 

24 (1) shall be applied with respect to the calendar year 


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1 in which such taxable year begins (in addition to ap2 plying to such taxable year). 

3 (f) COVID–ERTC DOCUMENT.—For purposes of 

4 this section, the term ‘‘COVID–ERTC document’’ means 

5 any return, affidavit, claim, or other document related to 

6 any COVID-related employee retention tax credit, includ7 ing any document related to eligibility for, or the calcula8 tion or determination of any amount directly related to 

9 any COVID-related employee retention tax credit. 

10 (g) COVID-RELATED EMPLOYEE RETENTION TAX

11 CREDIT.—For purposes of this section, the term 

12 ‘‘COVID-related employee retention tax credit’’ means— 

13 (1) any credit, or advance payment, under sec14 tion 3134 of the Internal Revenue Code of 1986, 

15 and 

16 (2) any credit, or advance payment, under sec17 tion 2301 of the CARES Act. 

18 (h) LIMITATION ON CREDIT AND REFUND OF

19 COVID-RELATED EMPLOYEE RETENTION TAX CRED20 ITS.—Notwithstanding section 6511 of the Internal Rev21 enue Code of 1986 or any other provision of law, no credit 

22 or refund of any COVID-related employee retention tax 

23 credit shall be allowed or made after January 31, 2024, 

24 unless a claim for such credit or refund is filed by the 

25 taxpayer on or before such date. 


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1 (i) AMENDMENTS TO EXTEND LIMITATION ON AS2 SESSMENT.— 

3 (1) IN GENERAL.—Section 3134(l) of the Inter4 nal Revenue Code of 1986 is amended to read as fol5 lows: 

6 ‘‘(l) EXTENSION OF LIMITATION ON ASSESSMENT.— 

7 ‘‘(1) IN GENERAL.—Notwithstanding section 

8 6501, the limitation on the time period for the as9 sessment of any amount attributable to a credit 

10 claimed under this section shall not expire before the 

11 date that is 6 years after the latest of— 

12 ‘‘(A) the date on which the original return 

13 which includes the calendar quarter with re14 spect to which such credit is determined is filed, 

15 ‘‘(B) the date on which such return is 

16 treated as filed under section 6501(b)(2), or 

17 ‘‘(C) the date on which the claim for credit 

18 or refund with respect to such credit is made. 

19 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC20 COUNT IN DETERMINING IMPROPERLY CLAIMED

21 CREDIT.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding sec23 tion 6511, in the case of an assessment attrib24 utable to a credit claimed under this section, 

25 the limitation on the time period for credit or 


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1 refund of any amount attributable to a deduc2 tion for improperly claimed ERTC wages shall 

3 not expire before the time period for such as4 sessment expires under paragraph (1). 

5 ‘‘(B) IMPROPERLY CLAIMED ERTC

6 WAGES.—For purposes of this paragraph, the 

7 term ‘improperly claimed ERTC wages’ means, 

8 with respect to an assessment attributable to a 

9 credit claimed under this section, the wages 

10 with respect to which a deduction would not 

11 have been allowed if the portion of the credit to 

12 which such assessment relates had been prop13 erly claimed.’’. 

14 (2) APPLICATION TO CARES ACT CREDIT.—Sec15 tion 2301 of the CARES Act is amended by adding 

16 at the end the following new subsection: 

17 ‘‘(o) EXTENSION OF LIMITATION ON ASSESSMENT.— 

18 ‘‘(1) IN GENERAL.—Notwithstanding section 

19 6501 of the Internal Revenue Code of 1986, the lim20 itation on the time period for the assessment of any 

21 amount attributable to a credit claimed under this 

22 section shall not expire before the date that is 6 

23 years after the latest of— 


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1 ‘‘(A) the date on which the original return 

2 which includes the calendar quarter with re3 spect to which such credit is determined is filed, 

4 ‘‘(B) the date on which such return is 

5 treated as filed under section 6501(b)(2) of 

6 such Code, or 

7 ‘‘(C) the date on which the claim for credit 

8 or refund with respect to such credit is made. 

9 ‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC10 COUNT IN DETERMINING IMPROPERLY CLAIMED

11 CREDIT.— 

12 ‘‘(A) IN GENERAL.—Notwithstanding sec13 tion 6511 of such Code, in the case of an as14 sessment attributable to a credit claimed under 

15 this section, the limitation on the time period 

16 for credit or refund of any amount attributable 

17 to a deduction for improperly claimed ERTC 

18 wages shall not expire before the time period 

19 for such assessment expires under paragraph 

20 (1). 

21 ‘‘(B) IMPROPERLY CLAIMED ERTC

22 WAGES.—For purposes of this paragraph, the 

23 term ‘improperly claimed ERTC wages’ means, 

24 with respect to an assessment attributable to a 

25 credit claimed under this section, the wages 


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1 with respect to which a deduction would not 

2 have been allowed if the portion of the credit to 

3 which such assessment relates had been prop4 erly claimed.’’. 

5 (j) EFFECTIVE DATES.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the provisions of this sec8 tion shall apply to aid, assistance, and advice pro9 vided after March 12, 2020. 

10 (2) DUE DILIGENCE REQUIREMENTS.—Sub11 sections (b) and (c) shall apply to aid, assistance, 

12 and advice provided after the date of the enactment 

13 of this Act. 

14 (3) LIMITATION ON CREDIT AND REFUND OF

15 COVID-RELATED EMPLOYEE RETENTION TAX CRED16 ITS.—Subsection (h) shall apply to credits and re17 funds allowed or made after January 31, 2024. 

18 (4) AMENDMENTS TO EXTEND LIMITATION ON

19 ASSESSMENT.—The amendments made by subsection 

20 (i) shall apply to assessments made after the date of 

21 the enactment of this Act. 

22 (k) TRANSITION RULE WITH RESPECT TO REQUIRE23 MENTS TO DISCLOSE INFORMATION, MAINTAIN CLIENT

24 LISTS, ETC.—Any return under section 6111 of the Inter25 nal Revenue Code of 1986, or list under section 6112 of 


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1 such Code, required by reason of subsection (d) of this 

2 section to be filed or maintained, respectively, with respect 

3 to any aid, assistance, or advice provided by a COVID– 

4 ERTC promoter with respect to a COVID–ERTC docu5 ment before the date of the enactment of this Act, shall 

6 not be required to be so filed or maintained (with respect 

7 to such aid, assistance or advice) before the date which 

8 is 90 days after such date. 

9 (l) PROVISIONS NOT TO BE CONSTRUED TO CREATE

10 NEGATIVE INFERENCES.— 

11 (1) KNOWLEDGE REQUIREMENT FOR PURPOSES

12 OF PENALTY FOR AIDING AND ABETTING UNDER13 STATEMENT OF TAX LIABILITY.—Subsection (b) 

14 shall not be construed to create any inference with 

15 respect to the proper application of section 

16 6701(a)(3) of the Internal Revenue Code of 1986 

17 with respect to any aid, assistance, or advice other 

18 than the aid, assistance, or advice to which such 

19 subsection applies. 

20 (2) REQUIREMENTS TO DISCLOSE INFORMA21 TION, MAINTAIN CLIENT LISTS, ETC.—Subsections 

22 (d) and (k) shall not be construed to create any in23 ference with respect to whether any COVID-related 

24 employee retention tax credit is (without regard to 

25 subsection (d)) a listed transaction (or reportable 


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1 transaction) with respect to any COVID–ERTC pro2 moter; and, for purposes of subsection (j), a return 

3 or list shall not be treated as required (with respect 

4 to such aid, assistance, or advice) by reason of sub5 section (d) if such return or list would be so re6 quired without regard to subsection (d). 

7 (m) REGULATIONS.—The Secretary (as defined in 

8 subsection (c)(5)) shall issue such regulations or other 

9 guidance as may be necessary or appropriate to carry out 

10 the purposes of this section (and the amendments made 

11 by this section). 

Æ 


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