I 

114TH CONGRESS 

2D SESSION H. R. 4936 

To provide assistance to small businesses. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 14, 2016 

Mr. WALBERG introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Government Reform, Small Business, Education and the Workforce, and the Judiciary, 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 provide assistance to small businesses. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Main Street Jobs and Opportunity Act of 2016’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—DEATH TAX REPEAL 

Sec. 101. Repeal of estate and generation-skipping transfer taxes. 

Sec. 102. Modifications of gift tax. 


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TITLE II—SMALL BUSINESS PAPERWORK RELIEF 

Sec. 201. Suspension of fines for first-time paperwork violations by small business concerns. 

TITLE III—OCCUPATIONAL LICENSING 

Sec. 301. Sense of Congress regarding occupational licensing. 

Sec. 302. Study on effects of certain occupational licensing requirements. 

TITLE IV—RESTORE TRADITIONAL DEFINITION OF FULL-TIME 

EMPLOYMENT 

Sec. 401. Repeal of 30-hour threshold for classification as full-time employee 

for purposes of the employer mandate in the Patient Protection 

and Affordable Care Act and replacement with 40 hours. 

TITLE V—SMALL BUSINESS START-UP SAVINGS ACCOUNTS 

Sec. 501. Establishment of Small Business Start-Up Savings Accounts. 

TITLE VI—LIMIT FRIVOLOUS LAWSUITS 

Sec. 601. Attorney accountability. 

TITLE VII—INCREASE IRS ACCOUNTABILITY 

Sec. 701. Modification of standards for awarding of costs and certain fees. 

Sec. 702. Civil damages allowed for reckless or intentional disregard of internal 

revenue laws. 

Sec. 703. Modifications relating to certain offenses by officers and employees 

in connection with revenue laws. 

Sec. 704. Modifications relating to civil damages for unauthorized inspection or 

disclosure of returns and return information. 

Sec. 705. Increase in monetary penalties for certain unauthorized disclosures of 

information. 

1 TITLE I—DEATH TAX REPEAL 

2 SEC. 101. REPEAL OF ESTATE AND GENERATION-SKIPPING 

3 TRANSFER TAXES. 

4 (a) ESTATE TAX REPEAL.—Subchapter C of chapter 

5 11 of subtitle B of the Internal Revenue Code of 1986 

6 is amended by adding at the end the following new section: 

7 ‘‘SEC. 2210. TERMINATION. 

8 ‘‘(a) IN GENERAL.—Except as provided in subsection 

9 (b), this chapter shall not apply to the estates of decedents 


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1 dying on or after the date of the enactment of the Main 

2 Street Jobs and Opportunity Act of 2016. 

3 ‘‘(b) CERTAIN DISTRIBUTIONS FROM QUALIFIED

4 DOMESTIC TRUSTS.—In applying section 2056A with re5 spect to the surviving spouse of a decedent dying before 

6 the date of the enactment of the Main Street Jobs and 

7 Opportunity Act of 2016— 

8 ‘‘(1) section 2056A(b)(1)(A) shall not apply to 

9 distributions made after the 10-year period begin10 ning on such date, and 

11 ‘‘(2) section 2056A(b)(1)(B) shall not apply on 

12 or after such date.’’. 

13 (b) GENERATION-SKIPPING TRANSFER TAX RE14 PEAL.—Subchapter G of chapter 13 of subtitle B of such 

15 Code is amended by adding at the end the following new 

16 section: 

17 ‘‘SEC. 2664. TERMINATION. 

18 ‘‘This chapter shall not apply to generation-skipping 

19 transfers on or after the date of the enactment of the Main 

20 Street Jobs and Opportunity Act of 2016.’’. 

21 (c) CONFORMING AMENDMENTS.— 

22 (1) The table of sections for subchapter C of 

23 chapter 11 of the Internal Revenue Code of 1986 is 

24 amended by adding at the end the following new 

25 item: 

‘‘Sec. 2210. Termination.’’. 


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1 (2) The table of sections for subchapter G of 

2 chapter 13 of such Code is amended by adding at 

3 the end the following new item: 

‘‘Sec. 2664. Termination.’’. 

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

5 this section shall apply to the estates of decedents dying, 

6 and generation-skipping transfers, on or after the date of 

7 the enactment of this Act. 

8 SEC. 102. MODIFICATIONS OF GIFT TAX. 

9 (a) COMPUTATION OF GIFT TAX.—Subsection (a) of 

10 section 2502 of the Internal Revenue Code of 1986 is 

11 amended to read as follows: 

12 ‘‘(a) COMPUTATION OF TAX.— 

13 ‘‘(1) IN GENERAL.—The tax imposed by section 

14 2501 for each calendar year shall be an amount 

15 equal to the excess of— 

16 ‘‘(A) a tentative tax, computed under para17 graph (2), on the aggregate sum of the taxable 

18 gifts for such calendar year and for each of the 

19 preceding calendar periods, over 

20 ‘‘(B) a tentative tax, computed under para21 graph (2), on the aggregate sum of the taxable 

22 gifts for each of the preceding calendar periods. 

23 ‘‘(2) RATE SCHEDULE.— 

‘‘If the amount with respect to which the 

tentative tax to be computed is:.

The tentative tax 

is: 

Not over $10,000 ........................................................... 18% of such amount. 


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Over $10,000 but not over $20,000 .............................. $1,800, plus 20% of 

the excess over 

$10,000. 

Over $20,000 but not over $40,000 .............................. $3,800, plus 22% of 

the excess over 

$20,000. 

Over $40,000 but not over $60,000 .............................. $8,200, plus 24% of 

the excess over 

$40,000. 

Over $60,000 but not over $80,000 .............................. $13,000, plus 26% of 

the excess over 

$60,000. 

Over $80,000 but not over $100,000 ............................ $18,200, plus 28% of 

the excess over 

$80,000. 

Over $100,000 but not over $150,000 .......................... $23,800, plus 30% of 

the excess over 

$100,000. 

Over $150,000 but not over $250,000 .......................... $38,800, plus 32% of 

the excess of 

$150,000. 

Over $250,000 but not over $500,000 .......................... $70,800, plus 34% of 

the excess over 

$250,000. 

Over $500,000 ............................................................... $155,800, plus 35% of 

the excess of 

$500,000.’’. 

1 (b) TREATMENT OF CERTAIN TRANSFERS IN

2 TRUST.—Section 2511 of the Internal Revenue Code of 

3 1986 is amended by adding at the end the following new 

4 subsection: 

5 ‘‘(c) TREATMENT OF CERTAIN TRANSFERS IN

6 TRUST.—Notwithstanding any other provision of this sec7 tion and except as provided in regulations, a transfer in 

8 trust shall be treated as a taxable gift under section 2503, 

9 unless the trust is treated as wholly owned by the donor 

10 or the donor’s spouse under subpart E of part I of sub11 chapter J of chapter 1.’’. 

12 (c) LIFETIME GIFT EXEMPTION.— 


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1 (1) IN GENERAL.—Paragraph (1) of section 

2 2505(a) of the Internal Revenue Code of 1986 is 

3 amended to read as follows: 

4 ‘‘(1) the amount of the tentative tax which 

5 would be determined under the rate schedule set 

6 forth in section 2502(a)(2) if the amount with re7 spect to which such tentative tax is to be computed 

8 were $5,000,000, reduced by’’. 

9 (2) INFLATION ADJUSTMENT.—Section 2505 of 

10 such Code is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(d) INFLATION ADJUSTMENT.— 

13 ‘‘(1) IN GENERAL.—In the case of any calendar 

14 year after 2011, the dollar amount in subsection 

15 (a)(1) shall be increased by an amount equal to— 

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

17 ‘‘(B) the cost-of-living adjustment deter18 mined under section 1(f)(3) for such calendar 

19 year by substituting ‘calendar year 2010’ for 

20 ‘calendar year 1992’ in subparagraph (B) 

21 thereof. 

22 ‘‘(2) ROUNDING.—If any amount as adjusted 

23 under paragraph (1) is not a multiple of $10,000, 

24 such amount shall be rounded to the nearest mul25 tiple of $10,000.’’. 


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1 (d) CONFORMING AMENDMENTS.— 

2 (1) The heading for section 2505 of such Code 

3 is amended by striking ‘‘UNIFIED’’. 

4 (2) The item in the table of sections for sub5 chapter A of chapter 12 of such Code relating to 

6 section 2505 is amended to read as follows: 

‘‘Sec. 2505. Credit against gift tax.’’. 

7 (3) Section 2801(a)(1) of such Code is amended 

8 by striking ‘‘section 2001(c) as in effect on the date 

9 of such receipt’’ and inserting ‘‘section 2502(a)(2)’’. 

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

11 this section shall apply to gifts made on or after the date 

12 of the enactment of this Act. 

13 (f) TRANSITION RULE.— 

14 (1) IN GENERAL.—For purposes of applying 

15 sections 1015(d), 2502, and 2505 of the Internal 

16 Revenue Code of 1986, the calendar year in which 

17 this Act is enacted shall be treated as 2 separate cal18 endar years one of which ends on the day before the 

19 date of the enactment of this Act and the other of 

20 which begins on such date of enactment. 

21 (2) APPLICATION OF SECTION 2504(b).—For 

22 purposes of applying section 2504(b) of the Internal 

23 Revenue Code of 1986, the calendar year in which 

24 this Act is enacted shall be treated as one preceding 

25 calendar period. 


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1 TITLE II—SMALL BUSINESS 

2 PAPERWORK RELIEF 

3 SEC. 201. SUSPENSION OF FINES FOR FIRST-TIME PAPER4 WORK VIOLATIONS BY SMALL BUSINESS CON5 CERNS. 

6 Section 3506 of title 44, United States Code (com7 monly referred to as the ‘‘Paperwork Reduction Act’’), is 

8 amended by adding at the end the following: 

9 ‘‘(j) SMALL BUSINESSES.— 

10 ‘‘(1) SMALL BUSINESS CONCERN.—In this sub11 section, the term ‘small business concern’ has the 

12 meaning given that term under section 3 of the 

13 Small Business Act (15 U.S.C. 632). 

14 ‘‘(2) IN GENERAL.—In the case of a first-time 

15 violation by a small business concern of a require16 ment regarding the collection of information by an 

17 agency, the head of the agency shall not impose a 

18 civil fine on the small business concern unless the 

19 head of the agency determines that— 

20 ‘‘(A) the violation has the potential to 

21 cause serious harm to the public interest; 

22 ‘‘(B) failure to impose a civil fine would 

23 impede or interfere with the detection of crimi24 nal activity; 


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1 ‘‘(C) the violation is a violation of an inter2 nal revenue law or a law concerning the assess3 ment or collection of any tax, debt, revenue, or 

4 receipt; 

5 ‘‘(D) the violation was not corrected on or 

6 before the date that is 6 months after the date 

7 on which the small business concern receives 

8 notification of the violation in writing from the 

9 agency; or 

10 ‘‘(E) except as provided in paragraph (3), 

11 the violation presents a danger to the public 

12 health or safety. 

13 ‘‘(3) DANGER TO PUBLIC HEALTH OR SAFE14 TY.— 

15 ‘‘(A) IN GENERAL.—In any case in which 

16 the head of an agency determines under para17 graph (2)(E) that a violation presents a danger 

18 to the public health or safety, the head of the 

19 agency may, notwithstanding paragraph (2)(E), 

20 determine not to impose a civil fine on the 

21 small business concern if the violation is cor22 rected not later than 24 hours after receipt by 

23 the owner of the small business concern of noti24 fication of the violation in writing. 


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1 ‘‘(B) CONSIDERATIONS.—In determining 

2 whether to allow a small business concern 24 

3 hours to correct a violation under subparagraph 

4 (A), the head of an agency shall take into ac5 count all of the facts and circumstances regard6 ing the violation, including— 

7 ‘‘(i) the nature and seriousness of the 

8 violation, including whether the violation is 

9 technical or inadvertent or involves willful 

10 or criminal conduct; 

11 ‘‘(ii) whether the small business con12 cern has made a good faith effort to com13 ply with applicable laws and to remedy the 

14 violation within the shortest practicable pe15 riod of time; and 

16 ‘‘(iii) whether the small business con17 cern has obtained a significant economic 

18 benefit from the violation. 

19 ‘‘(C) NOTICE TO CONGRESS.—In any case 

20 in which the head of an agency imposes a civil 

21 fine on a small business concern for a violation 

22 that presents a danger to the public health or 

23 safety and does not allow the small business 

24 concern 24 hours to correct the violation under 

25 subparagraph (A), the head of the agency shall 


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1 notify Congress regarding the determination 

2 not later than 60 days after the date on which 

3 the civil fine is imposed by the agency. 

4 ‘‘(4) LIMITED TO FIRST-TIME VIOLATIONS.— 

5 ‘‘(A) IN GENERAL.—This subsection shall 

6 not apply to any violation by a small business 

7 concern of a requirement regarding collection of 

8 information by an agency if the small business 

9 concern previously violated any requirement re10 garding collection of information by the agency. 

11 ‘‘(B) OTHER AGENCIES.—For purposes of 

12 making a determination under subparagraph 

13 (A), the head of an agency shall not take into 

14 account any violation of a requirement regard15 ing collection of information by another agen16 cy.’’. 

17 TITLE III—OCCUPATIONAL 

18 LICENSING 

19 SEC. 301. SENSE OF CONGRESS REGARDING OCCUPA20 TIONAL LICENSING. 

21 It is the sense of Congress that— 

22 (1) the Department of Labor should act within 

23 its existing authority to reduce employment barriers 

24 created by certain occupational licensing require25 ments, including providing technical assistance and 


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1 disseminating guidance and information on best 

2 practices to States interested in increasing economic 

3 opportunity through licensing reciprocity agreements 

4 or other approaches; and 

5 (2) that States should form interstate compacts 

6 to make it easier for licensed workers to practice 

7 and relocate across State lines, while also enabling 

8 State regulators to share practitioners’ performance 

9 histories. 

10 SEC. 302. STUDY ON EFFECTS OF CERTAIN OCCUPATIONAL 

11 LICENSING REQUIREMENTS. 

12 (a) STUDY.—The Secretary of Labor shall conduct 

13 a study on the effects of occupational licensing require14 ments to determine how such requirements may— 

15 (1) affect the service quality of certain occupa16 tions; 

17 (2) affect public safety; and 

18 (3) impose barriers to entry for establishing 

19 small businesses, inhibit competition, increase costs 

20 to consumers, limit hiring, or negatively impact cer21 tain populations. 

22 (b) REPORT.—Not later than 180 days after the date 

23 of enactment of this Act, the Secretary shall transmit a 

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1 quired by subsection (a), including any recommendation 

2 for legislation. 

3 TITLE IV—RESTORE TRADI4 TIONAL DEFINITION OF FULL5 TIME EMPLOYMENT 

6 SEC. 401. REPEAL OF 30-HOUR THRESHOLD FOR CLASSI7 FICATION AS FULL-TIME EMPLOYEE FOR 

8 PURPOSES OF THE EMPLOYER MANDATE IN 

9 THE PATIENT PROTECTION AND AFFORD10 ABLE CARE ACT AND REPLACEMENT WITH 40 

11 HOURS. 

12 (a) FULL-TIME EQUIVALENTS.—Paragraph (2) of 

13 section 4980H(c) of the Internal Revenue Code of 1986 

14 is amended— 

15 (1) by repealing subparagraph (E), and 

16 (2) by inserting after subparagraph (D) the fol17 lowing new subparagraph: 

18 ‘‘(E) FULL-TIME EQUIVALENTS TREATED

19 AS FULL-TIME EMPLOYEES.—Solely for pur20 poses of determining whether an employer is an 

21 applicable large employer under this paragraph, 

22 an employer shall, in addition to the number of 

23 full-time employees for any month otherwise de24 termined, include for such month a number of 

25 full-time employees determined by dividing the 


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1 aggregate number of hours of service of employ2 ees who are not full-time employees for the 

3 month by 174.’’. 

4 (b) FULL-TIME EMPLOYEES.—Paragraph (4) of sec5 tion 4980H(c) of the Internal Revenue Code of 1986 is 

6 amended— 

7 (1) by repealing subparagraph (A), and 

8 (2) by inserting before subparagraph (B) the 

9 following new subparagraph: 

10 ‘‘(A) IN GENERAL.—The term ‘full-time 

11 employee’ means, with respect to any month, an 

12 employee who is employed on average at least 

13 40 hours of service per week.’’. 

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

15 this section shall apply to months beginning after Decem16 ber 31, 2013. 

17 TITLE V—SMALL BUSINESS 

18 START-UP SAVINGS ACCOUNTS 

19 SEC. 501. ESTABLISHMENT OF SMALL BUSINESS START-UP 

20 SAVINGS ACCOUNTS. 

21 (a) IN GENERAL.—Chapter 77 of the Internal Rev22 enue Code of 1986 is amended by adding at the end the 

23 following new section: 


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1 ‘‘SEC. 7529. SMALL BUSINESS START-UP SAVINGS AC2 COUNTS. 

3 ‘‘(a) IN GENERAL.—An individual or an eligible small 

4 business may enter into an agreement with the Secretary 

5 to establish a small business start-up savings account. 

6 ‘‘(b) SMALL BUSINESS START-UP SAVINGS AC7 COUNT.—For purposes of this section, the term ‘small 

8 business start-up savings account’ means a trust created 

9 or organized in the United States for the benefit of the 

10 account beneficiary, but only if the written governing in11 strument creating the trust meets the following require12 ments: 

13 ‘‘(1) Except as provided in subsection (d)(3) in 

14 the case of a rollover contribution, no contribution 

15 will be accepted unless it is in cash, and contribu16 tions will not be accepted for the taxable year on be17 half of any account beneficiary in excess of the 

18 amount in effect for such taxable year under sub19 section (d)(2). 

20 ‘‘(2) The trustee is a bank (as defined in sec21 tion 408(n)) or such other person who demonstrates 

22 to the satisfaction of the Secretary that the manner 

23 in which such other person will administer the trust 

24 will be consistent with the requirements of this sec25 tion. 


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1 ‘‘(3) No part of the trust funds will be invested 

2 in life insurance contracts. 

3 ‘‘(4) The interest of an individual in the bal4 ance of his account is nonforfeitable. 

5 ‘‘(5) The assets of the trust will not be commin6 gled with other property except in a common trust 

7 fund or common investment fund. 

8 ‘‘(c) ELIGIBLE SMALL BUSINESS.—For purposes of 

9 this section, the term ‘eligible small business’ means, with 

10 respect to any taxable year, any person engaged in a trade 

11 or business if the average number of employees employed 

12 by such person on business days during the taxable year 

13 was 500 or fewer. 

14 ‘‘(d) TREATMENT OF CONTRIBUTIONS.— 

15 ‘‘(1) IN GENERAL.—There shall be allowed as a 

16 deduction for the taxable year an amount equal to 

17 so much of the account beneficiary’s contributions 

18 for the taxable year to all small business start-up 

19 savings accounts maintained for the benefit of such 

20 beneficiary as do not exceed the contribution limita21 tions in effect for the taxable year under paragraph 

22 (2). 

23 ‘‘(2) CONTRIBUTION LIMITATION.— 

24 ‘‘(A) IN GENERAL.—The amount allowable 

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1 spect to all small business start-up savings ac2 counts maintained for the benefit of any person 

3 shall not exceed the lesser of— 

4 ‘‘(i) $10,000, or 

5 ‘‘(ii) $150,000, reduced by the aggre6 gate contributions by such person for all 

7 taxable years with respect to all small busi8 ness start-up savings accounts of the tax9 payer. 

10 ‘‘(B) COST OF LIVING ADJUSTMENT.— 

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

12 taxable year beginning after 2016, the 

13 $10,000 amount in subparagraph (A) shall 

14 be increased by an amount equal to— 

15 ‘‘(I) such dollar amount, multi16 plied by 

17 ‘‘(II) the cost-of-living adjust18 ment determined under section 1(f)(3) 

19 for the calendar year in which the tax20 able year begins, determined by sub21 stituting ‘calendar year 2015’ for ‘cal22 endar year 1992’ in subparagraph (B) 

23 thereof. 

24 ‘‘(ii) ROUNDING.—If any amount as 

25 adjusted under clause (i) is not a multiple 


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1 of $500, such amount shall be rounded to 

2 the next lowest multiple of $500. 

3 ‘‘(3) ROLLOVERS FROM RETIREMENT PLANS

4 NOT ALLOWED.—Under regulations prescribed by 

5 the Secretary, a person may make a rollover con6 tribution to a small business start-up savings ac7 count only in the case of a rollover from another 

8 small business start-up savings account. 

9 ‘‘(4) TREATED AS DEDUCTION FOR INDIVID10 UALS AND CORPORATIONS.—For purposes of chapter 

11 1, the deduction allowed under paragraph (1) shall 

12 be treated as a deduction specified in part VI of sub13 chapter B of chapter 1 (relating to itemized deduc14 tions for individuals and corporations). 

15 ‘‘(e) TREATMENT OF DISTRIBUTIONS.— 

16 ‘‘(1) TAX TREATMENT.— 

17 ‘‘(A) EXCLUSION OF QUALIFIED DISTRIBU18 TIONS.—Any qualified distribution from a small 

19 business start-up savings account shall not be 

20 includible in gross income. 

21 ‘‘(B) INCLUSION OF OTHER DISTRIBU22 TIONS.—Any distribution from a small business 

23 start-up savings account which is not a quali24 fied distribution shall be included in gross in25 come. 


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1 ‘‘(2) QUALIFIED DISTRIBUTION.—For purposes 

2 of this subsection, the term ‘qualified distribution’ 

3 means, with respect to any taxable year, any pay4 ment or distribution from a small business start-up 

5 savings account— 

6 ‘‘(A) to the extent the amount of such pay7 ment or distribution does not exceed the sum 

8 of— 

9 ‘‘(i) the aggregate amounts paid or in10 curred by the taxpayer for such taxable 

11 year with respect to the taxpayer’s trade or 

12 business for the purchase of equipment or 

13 facilities, marketing, training, incorpora14 tion, and accounting fees, and 

15 ‘‘(ii) the aggregate capital contribu16 tions of the taxpayer with respect to an eli17 gible small business for the taxable year 

18 (but only to the extent such amounts are 

19 used by such small business for purposes 

20 described in clause (i)), and 

21 ‘‘(B) which, in the case of a payment or 

22 distribution subsequent to the first payment or 

23 distribution from such account (or any prede24 cessor to such account)— 


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1 ‘‘(i) is made not later than the close 

2 of the 5th taxable year beginning after the 

3 date of such first payment or distribution, 

4 and 

5 ‘‘(ii) is made with respect to the same 

6 eligible small business with respect to 

7 which such first payment or distribution 

8 was made. 

9 ‘‘(3) TREATMENT AFTER DEATH OF ACCOUNT

10 BENEFICIARY.— 

11 ‘‘(A) IN GENERAL.—If, by reason of the 

12 death of the account beneficiary, any person ac13 quires the account beneficiary’s interest in a 

14 small business start-up savings account— 

15 ‘‘(i) such account shall cease to be a 

16 small business start-up savings account as 

17 of the date of death, and 

18 ‘‘(ii) an amount equal to the fair mar19 ket value of the assets in such account on 

20 such date shall be includible— 

21 ‘‘(I) in the case of a person who 

22 is not the estate of such beneficiary, 

23 in such person’s gross income for the 

24 taxable year which includes such date, 

25 or 


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1 ‘‘(II) in the case of a person who 

2 is the estate of such beneficiary, in 

3 such beneficiary’s gross income for 

4 the last taxable year of such bene5 ficiary. 

6 ‘‘(B) SPECIAL RULES.— 

7 ‘‘(i) REDUCTION OF INCLUSION FOR

8 PREDEATH EXPENSES.—The amount in9 cludible in gross income under subpara10 graph (A) shall be reduced by the amounts 

11 described in paragraph (2) which were in12 curred by the decedent before the date of 

13 the decedent’s death and paid by such per14 son within 1 year after such date. 

15 ‘‘(ii) DEDUCTION FOR ESTATE

16 TAXES.—An appropriate deduction shall be 

17 allowed under section 691(c) to any person 

18 (other than the decedent) with respect to 

19 amounts included in gross income under 

20 subparagraph (A)(ii)(I) by such person. 

21 ‘‘(4) TREATMENT FOR FAILURE TO BE TREAT22 ED AS ELIGIBLE SMALL BUSINESS.—If for any tax23 able year a taxpayer which holds a small business 

24 start-up savings account as an eligible small busi25 ness ceases to be an eligible small business— 


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1 ‘‘(A) such account shall cease to be a small 

2 business start-up savings account, and 

3 ‘‘(B) the balance of such account shall be 

4 treated as paid out for such taxable year in a 

5 distribution which is not a qualified distribu6 tion. 

7 ‘‘(f) SPECIAL RULES.— 

8 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—Any de9 duction or credit otherwise allowed for the taxable 

10 year with respect to amounts described in subsection 

11 (e)(2)(A) shall be reduced by an amount equal to 

12 the qualified distributions attributable to such 

13 amounts. The adjusted basis of any property placed 

14 in service for the taxable year shall be reduced by 

15 the amount of any qualified distributions attrib16 utable to such property. For purposes of this para17 graph, qualified distributions shall first be treated as 

18 attributable to amounts described in subsection 

19 (e)(2)(A), then to property placed in service for the 

20 taxable year. 

21 ‘‘(2) AGGREGATION RULE.—For purposes of 

22 this section, all persons treated as a single employer 

23 under subsection (a) or (b) of section 52, or sub24 section (m) or (o) of section 414, shall be treated as 

25 one person.’’. 


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1 (b) EXCISE TAX ON EXCESS CONTRIBUTIONS AND

2 NONQUALIFIED DISTRIBUTIONS.—Subtitle D of the Inter3 nal Revenue Code of 1986 is amended by adding at the 

4 end the following new chapter: 

5 ‘‘CHAPTER 50A—SMALL BUSINESS START6 UP SAVINGS ACCOUNTS 

‘‘Sec. 5000D. Tax on excess contributions to small business start-up savings 

accounts. 

‘‘Sec. 5000E. Tax on nonqualified distributions from small business start-up 

savings accounts. 

‘‘Sec. 5000F. Cross reference. 

7 ‘‘SEC. 5000D. TAX ON EXCESS CONTRIBUTIONS TO SMALL 

8 BUSINESS START-UP SAVINGS ACCOUNTS. 

9 ‘‘(a) IN GENERAL.—In the case of a small business 

10 start-up savings account (within the meaning of section 

11 7529) there is imposed for each taxable year a tax in an 

12 amount equal to 6 percent of the amount of the excess 

13 contributions to such taxpayer’s account (determined as 

14 of the close of the taxable year). 

15 ‘‘(b) LIMITATION.—The amount of tax imposed by 

16 subsection (a) shall not exceed 6 percent of the value of 

17 the account (determined as of the close of the taxable 

18 year). 

19 ‘‘(c) EXCESS CONTRIBUTIONS.—For purposes of this 

20 section, in the case of contributions to all small business 

21 start-up savings accounts maintained for the benefit of a 

22 person, the term ‘excess contributions’ means the sum 

23 of— 


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1 ‘‘(1) the excess (if any) of— 

2 ‘‘(A) the amount contributed to such ac3 counts for the taxable year, over 

4 ‘‘(B) the amount allowable as a contribu5 tion under section 7529(d)(2)(A) for such tax6 able year, and 

7 ‘‘(2) the amount determined under this sub8 section for the preceding taxable year, reduced by 

9 the sum of— 

10 ‘‘(A) the distributions out of the accounts 

11 for the taxable year, and 

12 ‘‘(B) the excess (if any) of— 

13 ‘‘(i) the maximum amount allowable 

14 as a contribution under section 

15 7529(d)(2)(A) for such taxable year, over 

16 ‘‘(ii) the amount contributed to such 

17 accounts for such taxable year. 

18 ‘‘SEC. 5000E. TAX ON NONQUALIFIED DISTRIBUTIONS FROM 

19 SMALL BUSINESS START-UP SAVINGS AC20 COUNTS. 

21 ‘‘(a) IN GENERAL.—If for any taxable year an 

22 amount is paid or distributed out of a taxpayer’s small 

23 business start-up savings account, there is imposed for 

24 such taxable year a tax in an amount equal to 10 percent 


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1 of the portion of such amount which is includible in the 

2 gross income of the taxpayer. 

3 ‘‘(b) EXCEPTION FOR DISABILITY OR DEATH.—Sub4 section (a) shall not apply if the payment or distribution 

5 is made after the account beneficiary becomes disabled 

6 within the meaning of section 72(m)(7) (but only if such 

7 beneficiary’s account was created before becoming so dis8 abled) or dies. 

9 ‘‘SEC. 5000F. CROSS REFERENCE. 

10 ‘‘For prohibited transactions, see section 4975.’’. 

11 (c) PROHIBITED TRANSACTIONS.— 

12 (1) IN GENERAL.—Paragraph (1) of section 

13 4975(e) of such Code is amended by striking ‘‘or’’ 

14 at the end of subparagraph (F), by striking the pe15 riod at the end of subparagraph and inserting ‘‘, 

16 or’’, and by adding at the end the following new sub17 paragraph: 

18 ‘‘(H) a small business start-up savings ac19 count (within the meaning of section 7529).’’. 

20 (2) SPECIAL RULE FOR CEASING TO BE A

21 SMALL BUSINESS START-UP SAVINGS ACCOUNT.— 

22 Section 4975(c) of such Code (relating to tax on 

23 prohibited transactions) is amended by adding at the 

24 end the following new paragraph: 


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1 ‘‘(7) SPECIAL RULE FOR SMALL BUSINESS

2 START-UP SAVINGS ACCOUNT.—An individual for 

3 whose benefit a small business start-up savings ac4 count (within the meaning of section 7529) is estab5 lished shall be exempt from the tax imposed by this 

6 section with respect to any transaction concerning 

7 such account (which would otherwise be taxable 

8 under this section) if, with respect to such trans9 action, the account ceases to be a small business 

10 start-up savings account by reason of the application 

11 of paragraph (3) or (4) of section 7529(e) to such 

12 account.’’. 

13 (d) DEDUCTION ALLOWED WHETHER OR NOT INDI14 VIDUAL ITEMIZES.—Subsection (a) of section 62 of such 

15 Code is amended by inserting after paragraph (21) the 

16 following new paragraph: 

17 ‘‘(22) CONTRIBUTIONS TO SMALL BUSINESS

18 START-UP SAVINGS ACCOUNTS.—The deduction al19 lowed by section 7529(d)(1)(A).’’. 

20 (e) CONFORMING AMENDMENTS.— 

21 (1) The table of chapters for subtitle D of such 

22 Code is amended by adding at the end the following 

23 new item: 

‘‘CHAPTER 50A. SMALL BUSINESS START-UP SAVINGS ACCOUNTS’’. 


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1 (2) The table of sections for chapter 77 of such 

2 Code is amended by inserting after the item relating 

3 to section 7528 the following new item: 

‘‘Sec. 7529. Small Business Start-Up Savings Accounts.’’. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2015. 

7 TITLE VI—LIMIT FRIVOLOUS 

8 LAWSUITS 

9 SEC. 601. ATTORNEY ACCOUNTABILITY. 

10 (a) SANCTIONS UNDER RULE 11.—Rule 11(c) of the 

11 Federal Rules of Civil Procedure is amended— 

12 (1) in paragraph (1), by striking ‘‘may’’ and in13 serting ‘‘shall’’; 

14 (2) in paragraph (2), by striking ‘‘Rule 5’’ and 

15 all that follows through ‘‘motion.’’ and inserting 

16 ‘‘Rule 5.’’; and 

17 (3) in paragraph (4), by striking ‘‘situated’’ 

18 and all that follows through the end of the para19 graph and inserting ‘‘situated, and to compensate 

20 the parties that were injured by such conduct. Sub21 ject to the limitations in paragraph (5), the sanction 

22 shall consist of an order to pay to the party or par23 ties the amount of the reasonable expenses incurred 

24 as a direct result of the violation, including reason25 able attorneys’ fees and costs. The court may also 


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1 impose additional appropriate sanctions, such as 

2 striking the pleadings, dismissing the suit, or other 

3 directives of a non-monetary nature, or, if warranted 

4 for effective deterrence, an order directing payment 

5 of a penalty into the court.’’. 

6 (b) RULE OF CONSTRUCTION.—Nothing in this Act 

7 or an amendment made by this Act shall be construed to 

8 bar or impede the assertion or development of new claims, 

9 defenses, or remedies under Federal, State, or local laws, 

10 including civil rights laws, or under the Constitution of 

11 the United States. 

12 TITLE VII—INCREASE IRS 

13 ACCOUNTABILITY 

14 SEC. 701. MODIFICATION OF STANDARDS FOR AWARDING 

15 OF COSTS AND CERTAIN FEES. 

16 (a) SMALL BUSINESSES ELIGIBLE WITHOUT RE17 GARD TO NET WORTH.—Subparagraph (D) of section 

18 7430(c)(4) of the Internal Revenue Code of 1986 is 

19 amended by striking ‘‘and’’ at the end of clause (i)(II), 

20 by striking the period at the end of clause (ii) and insert21 ing ‘‘, and’’, and by adding at the end the following new 

22 clause: 

23 ‘‘(iii) in the case of an eligible small 

24 business, the net worth limitation in clause 

25 (ii) of such section shall not apply.’’. 


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1 (b) ELIGIBLE SMALL BUSINESS.—Paragraph (4) of 

2 section 7430(c) of the Internal Revenue Code of 1986 is 

3 amended by adding at the end the following new subpara4 graph: 

5 ‘‘(F) ELIGIBLE SMALL BUSINESS.—For 

6 purposes of subparagraph (D)(iii), the term ‘eli7 gible small business’ means, with respect to any 

8 proceeding commenced in a taxable year— 

9 ‘‘(i) a corporation the stock of which 

10 is not publicly traded, 

11 ‘‘(ii) a partnership, or 

12 ‘‘(iii) a sole proprietorship, 

13 if the average annual gross receipts of such cor14 poration, partnership, or sole proprietorship for 

15 the 3-taxable-year period preceding such taxable 

16 year does not exceed $50,000,000. For pur17 poses of applying the test under the preceding 

18 sentence, rules similar to the rules of para19 graphs (2) and (3) of section 448(c) shall 

20 apply.’’. 

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

22 this section shall apply to proceedings commenced after 

23 the date of the enactment of this Act. 


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1 SEC. 702. CIVIL DAMAGES ALLOWED FOR RECKLESS OR IN2 TENTIONAL DISREGARD OF INTERNAL REV3 ENUE LAWS. 

4 (a) INCREASE IN AMOUNT OF DAMAGES.—Section 

5 7433(b) of the Internal Revenue Code of 1986 is amended 

6 by striking ‘‘$1,000,000 ($100,000, in the case of neg7 ligence)’’ and inserting ‘‘$3,000,000 ($300,000, in the 

8 case of negligence)’’. 

9 (b) EXTENSION OF TIME TO BRING ACTION.—Sec10 tion 7433(d)(3) of the Internal Revenue Code of 1986 is 

11 amended by striking ‘‘2 years’’ and inserting ‘‘5 years’’. 

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

13 this section shall apply to actions of employees of the In14 ternal Revenue Service after the date of the enactment 

15 of this Act. 

16 SEC. 703. MODIFICATIONS RELATING TO CERTAIN OF17 FENSES BY OFFICERS AND EMPLOYEES IN 

18 CONNECTION WITH REVENUE LAWS. 

19 (a) INCREASE IN PENALTY.—Section 7214 of the In20 ternal Revenue Code of 1986 is amended— 

21 (1) by striking ‘‘$10,000’’ in subsection (a) and 

22 inserting ‘‘$25,000’’, and 

23 (2) by striking ‘‘$5,000’’ in subsection (b) and 

24 inserting ‘‘$10,000’’. 


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

2 this section shall take effect on the date of the enactment 

3 of this Act. 

4 SEC. 704. MODIFICATIONS RELATING TO CIVIL DAMAGES 

5 FOR UNAUTHORIZED INSPECTION OR DIS6 CLOSURE OF RETURNS AND RETURN INFOR7 MATION. 

8 (a) INCREASE IN AMOUNT OF DAMAGES.—Subpara9 graph (A) of section 7431(c)(1) of the Internal Revenue 

10 Code of 1986 is amended by striking ‘‘$1,000’’ and insert11 ing ‘‘$10,000’’. 

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

13 this section shall apply to inspections and disclosure occur14 ring on and after the date of the enactment of this Act. 

15 SEC. 705. INCREASE IN MONETARY PENALTIES FOR CER16 TAIN UNAUTHORIZED DISCLOSURES OF IN17 FORMATION. 

18 (a) IN GENERAL.—Paragraphs (1), (2), (3), and (4) 

19 of section 7213(a) of the Internal Revenue Code of 1986 

20 are each amended by striking ‘‘$5,000’’ and inserting 

21 ‘‘$10,000’’. 

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

23 this section shall apply to disclosures made after the date 

24 of the enactment of this Act. 

Æ 


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