I 

111TH CONGRESS 

2D SESSION H. R. 5982 

To amend the Internal Revenue Code of 1986 to repeal the expansion of 

certain information reporting requirements to corporations and to payments for property, to eliminate loopholes which encourage companies 

to move operations offshore, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 30, 2010 

Mr. LEVIN (for himself, Mr. OWENS, Mr. MURPHY of New York, Mr. STARK, 

Mr. LEWIS of Georgia, Mr. BLUMENAUER, Mr. PASCRELL, Ms. BERKLEY, Mr. CROWLEY, Mr. VAN HOLLEN, Mr. DAVIS of Illinois, Mr. 

ARCURI, Mr. BARROW, Mr. GARAMENDI, Ms. GIFFORDS, Mr. HILL, Mr. 

KRATOVIL, Mr. PERRIELLO, Mr. KIND, Mr. ISRAEL, Ms. CHU, and Ms. 

KOSMAS) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the 

Budget, 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; which was considered and failed of passage 

A BILL 

To amend the Internal Revenue Code of 1986 to repeal 

the expansion of certain information reporting requirements to corporations and to payments for property, 

to eliminate loopholes which encourage companies to 

move operations offshore, 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; AMENDMENT OF 1986 CODE; 

2 TABLE OF CONTENTS. 

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

4 ‘‘Small Business Tax Relief Act of 2010’’. 

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 for 

12 this Act is as follows: 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

TITLE I—REPEAL OF CERTAIN INFORMATION REPORTING 

REQUIREMENTS 

Sec. 101. Repeal of expansion of certain information reporting requirements to 

corporations and to payments for property. 

TITLE II—REVENUE PROVISIONS 

Subtitle A—Foreign Provisions 

Sec. 201. Rules to prevent splitting foreign tax credits from the income to 

which they relate. 

Sec. 202. Denial of foreign tax credit with respect to foreign income not subject 

to United States taxation by reason of covered asset acquisitions. 

Sec. 203. Separate application of foreign tax credit limitation, etc., to items 

resourced under treaties. 

Sec. 204. Limitation on the amount of foreign taxes deemed paid with respect 

to section 956 inclusions. 

Sec. 205. Special rule with respect to certain redemptions by foreign subsidiaries. 

Sec. 206. Modification of affiliation rules for purposes of rules allocating interest expense. 

Sec. 207. Termination of special rules for interest and dividends received from 

persons meeting the 80-percent foreign business requirements. 

Sec. 208. Source rules for income on guarantees. 

Sec. 209. Limitation on extension of statute of limitations for failure to notify 

Secretary of certain foreign transfers. 


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Subtitle B—Other Revenue Provisions 

Sec. 211. Required minimum 10-year term, etc., for grantor retained annuity 

trusts. 

Sec. 212. Crude tall oil ineligible for cellulosic biofuel producer credit. 

Sec. 213. Increase in information return penalties. 

Sec. 214. Treatment of securities of a controlled corporation exchanged for assets in certain reorganizations. 

TITLE III—PAYGO COMPLIANCE 

Sec. 301. Paygo compliance. 

1 TITLE I—REPEAL OF CERTAIN 

2 INFORMATION REPORTING 

3 REQUIREMENTS 

4 SEC. 101. REPEAL OF EXPANSION OF CERTAIN INFORMA5 TION REPORTING REQUIREMENTS TO COR6 PORATIONS AND TO PAYMENTS FOR PROP7 ERTY. 

8 Section 9006 of the Patient Protection and Afford9 able Care Act is repealed. Each provision of law amended 

10 by such section is amended to read as such provision 

11 would read if such section had never been enacted. 

12 TITLE II—REVENUE PROVISIONS 

13 Subtitle A—Foreign Provisions 

14 SEC. 201. RULES TO PREVENT SPLITTING FOREIGN TAX 

15 CREDITS FROM THE INCOME TO WHICH THEY 

16 RELATE. 

17 (a) IN GENERAL.—Subpart A of part III of sub18 chapter N of chapter 1 is amended by adding at the end 

19 the following new section: 


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1 ‘‘SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RE2 LATED INCOME TAKEN INTO ACCOUNT. 

3 ‘‘(a) IN GENERAL.—If there is a foreign tax credit 

4 splitting event with respect to a foreign income tax paid 

5 or accrued by the taxpayer, such tax shall not be taken 

6 into account for purposes of this title before the taxable 

7 year in which the related income is taken into account 

8 under this chapter by the taxpayer. 

9 ‘‘(b) SPECIAL RULES WITH RESPECT TO SECTION

10 902 CORPORATIONS.—If there is a foreign tax credit split11 ting event with respect to a foreign income tax paid or 

12 accrued by a section 902 corporation, such tax shall not 

13 be taken into account— 

14 ‘‘(1) for purposes of section 902 or 960, or 

15 ‘‘(2) for purposes of determining earnings and 

16 profits under section 964(a), 

17 before the taxable year in which the related income is 

18 taken into account under this chapter by such section 902 

19 corporation or a domestic corporation which meets the 

20 ownership requirements of subsection (a) or (b) of section 

21 902 with respect to such section 902 corporation. 

22 ‘‘(c) SPECIAL RULES.—For purposes of this sec23 tion— 

24 ‘‘(1) APPLICATION TO PARTNERSHIPS, ETC.—In 

25 the case of a partnership, subsections (a) and (b) 

26 shall be applied at the partner level. Except as othVerDate Mar 15 2010 00:48 Aug 10, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5982.IH H5982

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1 erwise provided by the Secretary, a rule similar to 

2 the rule of the preceding sentence shall apply in the 

3 case of any S corporation or trust. 

4 ‘‘(2) TREATMENT OF FOREIGN TAXES AFTER

5 SUSPENSION.—In the case of any foreign income tax 

6 not taken into account by reason of subsection (a) 

7 or (b), except as otherwise provided by the Sec8 retary, such tax shall be so taken into account in the 

9 taxable year referred to in such subsection (other 

10 than for purposes of section 986(a)) as a foreign in11 come tax paid or accrued in such taxable year. 

12 ‘‘(d) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) FOREIGN TAX CREDIT SPLITTING

14 EVENT.—There is a foreign tax credit splitting event 

15 with respect to a foreign income tax if the related 

16 income is (or will be) taken into account under this 

17 chapter by a covered person. 

18 ‘‘(2) FOREIGN INCOME TAX.—The term ‘foreign 

19 income tax’ means any income, war profits, or excess 

20 profits tax paid or accrued to any foreign country or 

21 to any possession of the United States. 

22 ‘‘(3) RELATED INCOME.—The term ‘related in23 come’ means, with respect to any portion of any for24 eign income tax, the income (or, as appropriate, 


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1 earnings and profits) to which such portion of for2 eign income tax relates. 

3 ‘‘(4) COVERED PERSON.—The term ‘covered 

4 person’ means, with respect to any person who pays 

5 or accrues a foreign income tax (hereafter in this 

6 paragraph referred to as the ‘payor’)— 

7 ‘‘(A) any entity in which the payor holds, 

8 directly or indirectly, at least a 10 percent own9 ership interest (determined by vote or value), 

10 ‘‘(B) any person which holds, directly or 

11 indirectly, at least a 10 percent ownership in12 terest (determined by vote or value) in the 

13 payor, 

14 ‘‘(C) any person which bears a relationship 

15 to the payor described in section 267(b) or 

16 707(b), and 

17 ‘‘(D) any other person specified by the 

18 Secretary for purposes of this paragraph. 

19 ‘‘(5) SECTION 902 CORPORATION.—The term 

20 ‘section 902 corporation’ means any foreign corpora21 tion with respect to which one or more domestic cor22 porations meets the ownership requirements of sub23 section (a) or (b) of section 902. 

24 ‘‘(e) REGULATIONS.—The Secretary may issue such 

25 regulations or other guidance as is necessary or approVerDate Mar 15 2010 00:48 Aug 10, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5982.IH H5982

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1 priate to carry out the purposes of this section, including 

2 regulations or other guidance which provides— 

3 ‘‘(1) appropriate exceptions from the provisions 

4 of this section, and 

5 ‘‘(2) for the proper application of this section 

6 with respect to hybrid instruments.’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 for subpart A of part III of subchapter N of chapter 1 

9 is amended by adding at the end the following new item: 

‘‘Sec. 909. Suspension of taxes and credits until related income taken into account.’’. 

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

11 this section shall apply to— 

12 (1) foreign income taxes (as defined in section 

13 909(d) of the Internal Revenue Code of 1986, as 

14 added by this section) paid or accrued after Decem15 ber 31, 2010; and 

16 (2) foreign income taxes (as so defined) paid or 

17 accrued by a section 902 corporation (as so defined) 

18 on or before such date (and not deemed paid under 

19 section 902(a) or 960 of such Code on or before 

20 such date), but only for purposes of applying sec21 tions 902 and 960 with respect to periods after such 

22 date. 


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1 Section 909(b)(2) of the Internal Revenue Code of 1986, 

2 as added by this section, shall not apply to foreign income 

3 taxes described in paragraph (2). 

4 SEC. 202. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT 

5 TO FOREIGN INCOME NOT SUBJECT TO 

6 UNITED STATES TAXATION BY REASON OF 

7 COVERED ASSET ACQUISITIONS. 

8 (a) IN GENERAL.—Section 901 is amended by redes9 ignating subsection (m) as subsection (n) and by inserting 

10 after subsection (l) the following new subsection: 

11 ‘‘(m) DENIAL OF FOREIGN TAX CREDIT WITH RE12 SPECT TO FOREIGN INCOME NOT SUBJECT TO UNITED

13 STATES TAXATION BY REASON OF COVERED ASSET AC14 QUISITIONS.— 

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

16 asset acquisition, the disqualified portion of any for17 eign income tax determined with respect to the in18 come or gain attributable to the relevant foreign as19 sets— 

20 ‘‘(A) shall not be taken into account in de21 termining the credit allowed under subsection 

22 (a), and 

23 ‘‘(B) in the case of a foreign income tax 

24 paid by a section 902 corporation (as defined in 


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1 section 909(d)(5)), shall not be taken into ac2 count for purposes of section 902 or 960. 

3 ‘‘(2) COVERED ASSET ACQUISITION.—For pur4 poses of this section, the term ‘covered asset acquisi5 tion’ means— 

6 ‘‘(A) a qualified stock purchase (as defined 

7 in section 338(d)(3)) to which section 338(a) 

8 applies, 

9 ‘‘(B) any transaction which— 

10 ‘‘(i) is treated as an acquisition of as11 sets for purposes of this chapter, and 

12 ‘‘(ii) is treated as the acquisition of 

13 stock of a corporation (or is disregarded) 

14 for purposes of the foreign income taxes of 

15 the relevant jurisdiction, 

16 ‘‘(C) any acquisition of an interest in a 

17 partnership which has an election in effect 

18 under section 754, and 

19 ‘‘(D) to the extent provided by the Sec20 retary, any other similar transaction. 

21 ‘‘(3) DISQUALIFIED PORTION.—For purposes of 

22 this section— 

23 ‘‘(A) IN GENERAL.—The term ‘disqualified 

24 portion’ means, with respect to any covered 


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1 asset acquisition, for any taxable year, the ratio 

2 (expressed as a percentage) of— 

3 ‘‘(i) the aggregate basis differences 

4 (but not below zero) allocable to such tax5 able year under subparagraph (B) with re6 spect to all relevant foreign assets, divided 

7 by 

8 ‘‘(ii) the income on which the foreign 

9 income tax referred to in paragraph (1) is 

10 determined (or, if the taxpayer fails to sub11 stantiate such income to the satisfaction of 

12 the Secretary, such income shall be deter13 mined by dividing the amount of such for14 eign income tax by the highest marginal 

15 tax rate applicable to such income in the 

16 relevant jurisdiction). 

17 ‘‘(B) ALLOCATION OF BASIS DIF18 FERENCE.—For purposes of subparagraph 

19 (A)(i)— 

20 ‘‘(i) IN GENERAL.—The basis dif21 ference with respect to any relevant foreign 

22 asset shall be allocated to taxable years 

23 using the applicable cost recovery method 

24 under this chapter. 


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1 ‘‘(ii) SPECIAL RULE FOR DISPOSITION

2 OF ASSETS.—Except as otherwise provided 

3 by the Secretary, in the case of the disposi4 tion of any relevant foreign asset— 

5 ‘‘(I) the basis difference allocated 

6 to the taxable year which includes the 

7 date of such disposition shall be the 

8 excess of the basis difference with re9 spect to such asset over the aggregate 

10 basis difference with respect to such 

11 asset which has been allocated under 

12 clause (i) to all prior taxable years, 

13 and 

14 ‘‘(II) no basis difference with re15 spect to such asset shall be allocated 

16 under clause (i) to any taxable year 

17 thereafter. 

18 ‘‘(C) BASIS DIFFERENCE.— 

19 ‘‘(i) IN GENERAL.—The term ‘basis 

20 difference’ means, with respect to any rel21 evant foreign asset, the excess of— 

22 ‘‘(I) the adjusted basis of such 

23 asset immediately after the covered 

24 asset acquisition, over 


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1 ‘‘(II) the adjusted basis of such 

2 asset immediately before the covered 

3 asset acquisition. 

4 ‘‘(ii) BUILT-IN LOSS ASSETS.—In the 

5 case of a relevant foreign asset with re6 spect to which the amount described in 

7 clause (i)(II) exceeds the amount described 

8 in clause (i)(I), such excess shall be taken 

9 into account under this subsection as a 

10 basis difference of a negative amount. 

11 ‘‘(iii) SPECIAL RULE FOR SECTION 338

12 ELECTIONS.—In the case of a covered 

13 asset acquisition described in paragraph 

14 (2)(A), the covered asset acquisition shall 

15 be treated for purposes of this subpara16 graph as occurring at the close of the ac17 quisition date (as defined in section 

18 338(h)(2)). 

19 ‘‘(4) RELEVANT FOREIGN ASSETS.—For pur20 poses of this section, the term ‘relevant foreign 

21 asset’ means, with respect to any covered asset ac22 quisition, any asset (including any goodwill, going 

23 concern value, or other intangible) with respect to 

24 such acquisition if income, deduction, gain, or loss 

25 attributable to such asset is taken into account in 


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1 determining the foreign income tax referred to in 

2 paragraph (1). 

3 ‘‘(5) FOREIGN INCOME TAX.—For purposes of 

4 this section, the term ‘foreign income tax’ means 

5 any income, war profits, or excess profits tax paid 

6 or accrued to any foreign country or to any posses7 sion of the United States. 

8 ‘‘(6) TAXES ALLOWED AS A DEDUCTION, ETC.— 

9 Sections 275 and 78 shall not apply to any tax 

10 which is not allowable as a credit under subsection 

11 (a) by reason of this subsection. 

12 ‘‘(7) REGULATIONS.—The Secretary may issue 

13 such regulations or other guidance as is necessary or 

14 appropriate to carry out the purposes of this sub15 section, including to exempt from the application of 

16 this subsection certain covered asset acquisitions, 

17 and relevant foreign assets with respect to which the 

18 basis difference is de minimis.’’. 

19 (b) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendments made by this section 

22 shall apply to covered asset acquisitions (as defined 

23 in section 901(m)(2) of the Internal Revenue Code 

24 of 1986, as added by this section) after December 

25 31, 2010. 


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1 (2) TRANSITION RULE.—The amendments 

2 made by this section shall not apply to any covered 

3 asset acquisition (as so defined) with respect to 

4 which the transferor and the transferee are not re5 lated if such acquisition is— 

6 (A) made pursuant to a written agreement 

7 which was binding on May 20, 2010, and at all 

8 times thereafter; 

9 (B) described in a ruling request submitted 

10 to the Internal Revenue Service on or before 

11 such date; or 

12 (C) described on or before such date in a 

13 public announcement or in a filing with the Se14 curities and Exchange Commission. 

15 (3) RELATED PERSONS.—For purposes of this 

16 subsection, a person shall be treated as related to 

17 another person if the relationship between such per18 sons is described in section 267 or 707(b) of the In19 ternal Revenue Code of 1986. 

20 SEC. 203. SEPARATE APPLICATION OF FOREIGN TAX CRED21 IT LIMITATION, ETC., TO ITEMS RESOURCED 

22 UNDER TREATIES. 

23 (a) IN GENERAL.—Subsection (d) of section 904 is 

24 amended by redesignating paragraph (6) as paragraph (7) 


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1 and by inserting after paragraph (5) the following new 

2 paragraph: 

3 ‘‘(6) SEPARATE APPLICATION TO ITEMS

4 RESOURCED UNDER TREATIES.— 

5 ‘‘(A) IN GENERAL.—If— 

6 ‘‘(i) without regard to any treaty obli7 gation of the United States, any item of 

8 income would be treated as derived from 

9 sources within the United States, 

10 ‘‘(ii) under a treaty obligation of the 

11 United States, such item would be treated 

12 as arising from sources outside the United 

13 States, and 

14 ‘‘(iii) the taxpayer chooses the bene15 fits of such treaty obligation, 

16 subsections (a), (b), and (c) of this section and 

17 sections 902, 907, and 960 shall be applied sep18 arately with respect to each such item. 

19 ‘‘(B) COORDINATION WITH OTHER PROVI20 SIONS.—This paragraph shall not apply to any 

21 item of income to which subsection (h)(10) or 

22 section 865(h) applies. 

23 ‘‘(C) REGULATIONS.—The Secretary may 

24 issue such regulations or other guidance as is 

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1 poses of this paragraph, including regulations 

2 or other guidance which provides that related 

3 items of income may be aggregated for pur4 poses of this paragraph.’’. 

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

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 204. LIMITATION ON THE AMOUNT OF FOREIGN TAXES 

9 DEEMED PAID WITH RESPECT TO SECTION 

10 956 INCLUSIONS. 

11 (a) IN GENERAL.—Section 960 is amended by adding 

12 at the end the following new subsection: 

13 ‘‘(c) LIMITATION WITH RESPECT TO SECTION 956 

14 INCLUSIONS.— 

15 ‘‘(1) IN GENERAL.—If there is included under 

16 section 951(a)(1)(B) in the gross income of a do17 mestic corporation any amount attributable to the 

18 earnings and profits of a foreign corporation which 

19 is a member of a qualified group (as defined in sec20 tion 902(b)) with respect to the domestic corpora21 tion, the amount of any foreign income taxes deemed 

22 to have been paid during the taxable year by such 

23 domestic corporation under section 902 by reason of 

24 subsection (a) with respect to such inclusion in gross 

25 income shall not exceed the amount of the foreign 


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1 income taxes which would have been deemed to have 

2 been paid during the taxable year by such domestic 

3 corporation if cash in an amount equal to the 

4 amount of such inclusion in gross income were dis5 tributed as a series of distributions (determined 

6 without regard to any foreign taxes which would be 

7 imposed on an actual distribution) through the chain 

8 of ownership which begins with such foreign cor9 poration and ends with such domestic corporation. 

10 ‘‘(2) AUTHORITY TO PREVENT ABUSE.—The 

11 Secretary shall issue such regulations or other guid12 ance as is necessary or appropriate to carry out the 

13 purposes of this subsection, including regulations or 

14 other guidance which prevent the inappropriate use 

15 of the foreign corporation’s foreign income taxes not 

16 deemed paid by reason of paragraph (1).’’. 

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

18 this section shall apply to acquisitions of United States 

19 property (as defined in section 956(c) of the Internal Rev20 enue Code of 1986) after December 31, 2010. 

21 SEC. 205. SPECIAL RULE WITH RESPECT TO CERTAIN RE22 DEMPTIONS BY FOREIGN SUBSIDIARIES. 

23 (a) IN GENERAL.—Paragraph (5) of section 304(b) 

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1 paragraph (C) and by inserting after subparagraph (A) 

2 the following new subparagraph: 

3 ‘‘(B) SPECIAL RULE IN CASE OF FOREIGN

4 ACQUIRING CORPORATION.—In the case of any 

5 acquisition to which subsection (a) applies in 

6 which the acquiring corporation is a foreign 

7 corporation, no earnings and profits shall be 

8 taken into account under paragraph (2)(A) 

9 (and subparagraph (A) shall not apply) if more 

10 than 50 percent of the dividends arising from 

11 such acquisition (determined without regard to 

12 this subparagraph) would neither— 

13 ‘‘(i) be subject to tax under this chap14 ter for the taxable year in which the divi15 dends arise, nor 

16 ‘‘(ii) be includible in the earnings and 

17 profits of a controlled foreign corporation 

18 (as defined in section 957 and without re19 gard to section 953(c)).’’. 

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

21 this section shall apply to acquisitions after December 31, 

22 2010. 


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1 SEC. 206. MODIFICATION OF AFFILIATION RULES FOR PUR2 POSES OF RULES ALLOCATING INTEREST EX3 PENSE. 

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

5 864(e)(5) is amended by adding at the end the following: 

6 ‘‘Notwithstanding the preceding sentence, a foreign cor7 poration shall be treated as a member of the affiliated 

8 group if— 

9 ‘‘(i) more than 50 percent of the gross 

10 income of such foreign corporation for the 

11 taxable year is effectively connected with 

12 the conduct of a trade or business within 

13 the United States, and 

14 ‘‘(ii) at least 80 percent of either the 

15 vote or value of all outstanding stock of 

16 such foreign corporation is owned directly 

17 or indirectly by members of the affiliated 

18 group (determined with regard to this sen19 tence).’’. 

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

21 this section shall apply to taxable years beginning after 

22 the date of the enactment of this Act. 


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1 SEC. 207. TERMINATION OF SPECIAL RULES FOR INTEREST 

2 AND DIVIDENDS RECEIVED FROM PERSONS 

3 MEETING THE 80-PERCENT FOREIGN BUSI4 NESS REQUIREMENTS. 

5 (a) IN GENERAL.—Paragraph (1) of section 861(a) 

6 is amended by striking subparagraph (A) and by redesig7 nating subparagraphs (B) and (C) as subparagraphs (A) 

8 and (B), respectively. 

9 (b) GRANDFATHER RULE WITH RESPECT TO WITH10 HOLDING ON INTEREST AND DIVIDENDS RECEIVED FROM

11 PERSONS MEETING THE 80-PERCENT FOREIGN BUSI12 NESS REQUIREMENTS.— 

13 (1) IN GENERAL.—Subparagraph (B) of section 

14 871(i)(2) is amended to read as follows: 

15 ‘‘(B) The active foreign business percent16 age of— 

17 ‘‘(i) any dividend paid by an existing 

18 80/20 company, and 

19 ‘‘(ii) any interest paid by an existing 

20 80/20 company.’’. 

21 (2) DEFINITIONS AND SPECIAL RULES.—Sec22 tion 871 is amended by redesignating subsections (l) 

23 and (m) as subsections (m) and (n), respectively, 

24 and by inserting after subsection (k) the following 

25 new subsection: 


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1 ‘‘(l) RULES RELATING TO EXISTING 80/20 COMPA2 NIES.—For purposes of this subsection and subsection 

3 (i)(2)(B)— 

4 ‘‘(1) EXISTING 80/20 COMPANY.— 

5 ‘‘(A) IN GENERAL.—The term ‘existing 80/ 

6 20 company’ means any corporation if— 

7 ‘‘(i) such corporation met the 80-per8 cent foreign business requirements of sec9 tion 861(c)(1) (as in effect before the date 

10 of the enactment of this subsection) for 

11 such corporation’s last taxable year begin12 ning before January 1, 2011, 

13 ‘‘(ii) such corporation meets the 80- 

14 percent foreign business requirements of 

15 subparagraph (B) with respect to each tax16 able year after the taxable year referred to 

17 in clause (i), and 

18 ‘‘(iii) there has not been an addition 

19 of a substantial line of business with re20 spect to such corporation after the date of 

21 the enactment of this subsection. 

22 ‘‘(B) FOREIGN BUSINESS REQUIRE23 MENTS.— 

24 ‘‘(i) IN GENERAL.—Except as pro25 vided in clause (iv), a corporation meets 


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1 the 80-percent foreign business require2 ments of this subparagraph if it is shown 

3 to the satisfaction of the Secretary that at 

4 least 80 percent of the gross income from 

5 all sources of such corporation for the test6 ing period is active foreign business in7 come. 

8 ‘‘(ii) ACTIVE FOREIGN BUSINESS IN9 COME.—For purposes of clause (i), the 

10 term ‘active foreign business income’ 

11 means gross income which— 

12 ‘‘(I) is derived from sources out13 side the United States (as determined 

14 under this subchapter), and 

15 ‘‘(II) is attributable to the active 

16 conduct of a trade or business in a 

17 foreign country or possession of the 

18 United States. 

19 ‘‘(iii) TESTING PERIOD.—For pur20 poses of this subsection, the term ‘testing 

21 period’ means the 3-year period ending 

22 with the close of the taxable year of the 

23 corporation preceding the payment (or 

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1 come for such 3-year period (or part there2 of), the testing period shall be the taxable 

3 year in which the payment is made. 

4 ‘‘(iv) TRANSITION RULE.—In the case 

5 of a taxable year for which the testing pe6 riod includes 1 or more taxable years be7 ginning before January 1, 2011— 

8 ‘‘(I) a corporation meets the 80- 

9 percent foreign business requirements 

10 of this subparagraph if and only if the 

11 weighted average of— 

12 ‘‘(aa) the percentage of the 

13 corporation’s gross income from 

14 all sources that is active foreign 

15 business income (as defined in 

16 subparagraph (B) of section 

17 861(c)(1) (as in effect before the 

18 date of the enactment of this 

19 subsection)) for the portion of 

20 the testing period that includes 

21 taxable years beginning before 

22 January 1, 2011, and 

23 ‘‘(bb) the percentage of the 

24 corporation’s gross income from 

25 all sources that is active foreign 


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1 business income (as defined in 

2 clause (ii) of this subparagraph) 

3 for the portion of the testing pe4 riod, if any, that includes taxable 

5 years beginning on or after Janu6 ary 1, 2011, 

7 is at least 80 percent, and 

8 ‘‘(II) the active foreign business 

9 percentage for such taxable year shall 

10 equal the weighted average percentage 

11 determined under subclause (I). 

12 ‘‘(2) ACTIVE FOREIGN BUSINESS PERCENT13 AGE.—Except as provided in paragraph (1)(B)(iv), 

14 the term ‘active foreign business percentage’ means, 

15 with respect to any existing 80/20 company, the per16 centage which— 

17 ‘‘(A) the active foreign business income of 

18 such company for the testing period, is of 

19 ‘‘(B) the gross income of such company for 

20 the testing period from all sources. 

21 ‘‘(3) AGGREGATION RULES.—For purposes of 

22 applying paragraph (1) (other than subparagraphs 

23 (A)(i) and (B)(iv) thereof) and paragraph (2)— 

24 ‘‘(A) IN GENERAL.—The corporation re25 ferred to in paragraph (1)(A) and all of such 


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1 corporation’s subsidiaries shall be treated as 

2 one corporation. 

3 ‘‘(B) SUBSIDIARIES.—For purposes of sub4 paragraph (A), the term ‘subsidiary’ means any 

5 corporation in which the corporation referred to 

6 in subparagraph (A) owns (directly or indi7 rectly) stock meeting the requirements of sec8 tion 1504(a)(2) (determined by substituting ‘50 

9 percent’ for ‘80 percent’ each place it appears 

10 and without regard to section 1504(b)(3)). 

11 ‘‘(4) REGULATIONS.—The Secretary may issue 

12 such regulations or other guidance as is necessary or 

13 appropriate to carry out the purposes of this section, 

14 including regulations or other guidance which pro15 vide for the proper application of the aggregation 

16 rules described in paragraph (3).’’. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 861 is amended by striking sub19 section (c) and by redesignating subsections (d), (e), 

20 and (f) as subsections (c), (d), and (e), respectively. 

21 (2) Paragraph (9) of section 904(h) is amended 

22 to read as follows: 

23 ‘‘(9) TREATMENT OF CERTAIN DOMESTIC COR24 PORATIONS.—In the case of any dividend treated as 

25 not from sources within the United States under 


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1 section 861(a)(2)(A), the corporation paying such 

2 dividend shall be treated for purposes of this sub3 section as a United States-owned foreign corpora4 tion.’’. 

5 (3) Subsection (c) of section 2104 is amended 

6 in the last sentence by striking ‘‘or to a debt obliga7 tion of a domestic corporation’’ and all that follows 

8 and inserting a period. 

9 (d) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), the amendments made by this section 

12 shall apply to taxable years beginning after Decem13 ber 31, 2010. 

14 (2) GRANDFATHER RULE FOR OUTSTANDING

15 DEBT OBLIGATIONS.— 

16 (A) IN GENERAL.—The amendments made 

17 by this section shall not apply to payments of 

18 interest on obligations issued before the date of 

19 the enactment of this Act. 

20 (B) EXCEPTION FOR RELATED PARTY

21 DEBT.—Subparagraph (A) shall not apply to 

22 any interest which is payable to a related per23 son (determined under rules similar to the rules 

24 of section 954(d)(3)). 


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1 (C) SIGNIFICANT MODIFICATIONS TREAT2 ED AS NEW ISSUES.—For purposes of subpara3 graph (A), a significant modification of the 

4 terms of any obligation (including any extension 

5 of the term of such obligation) shall be treated 

6 as a new issue. 

7 SEC. 208. SOURCE RULES FOR INCOME ON GUARANTEES. 

8 (a) AMOUNTS SOURCED WITHIN THE UNITED

9 STATES.—Subsection (a) of section 861 is amended by 

10 adding at the end the following new paragraph: 

11 ‘‘(9) GUARANTEES.—Amounts received, directly 

12 or indirectly, from— 

13 ‘‘(A) a noncorporate resident or domestic 

14 corporation for the provision of a guarantee of 

15 any indebtedness of such resident or corpora16 tion, or 

17 ‘‘(B) any foreign person for the provision 

18 of a guarantee of any indebtedness of such per19 son, if such amount is connected with income 

20 which is effectively connected (or treated as ef21 fectively connected) with the conduct of a trade 

22 or business in the United States.’’. 

23 (b) AMOUNTS SOURCED WITHOUT THE UNITED

24 STATES.—Subsection (a) of section 862 is amended by 

25 striking ‘‘and’’ at the end of paragraph (7), by striking 


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1 the period at the end of paragraph (8) and inserting ‘‘; 

2 and’’, and by adding at the end the following new para3 graph: 

4 ‘‘(9) amounts received, directly or indirectly, 

5 from a foreign person for the provision of a guar6 antee of indebtedness of such person other than 

7 amounts which are derived from sources within the 

8 United States as provided in section 861(a)(9).’’. 

9 (c) CONFORMING AMENDMENT.—Clause (ii) of sec10 tion 864(c)(4)(B) is amended by striking ‘‘dividends or in11 terest’’ and inserting ‘‘dividends, interest, or amounts re12 ceived for the provision of guarantees of indebtedness’’. 

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

14 this section shall apply to guarantees issued after the date 

15 of the enactment of this Act. 

16 SEC. 209. LIMITATION ON EXTENSION OF STATUTE OF LIMI17 TATIONS FOR FAILURE TO NOTIFY SEC18 RETARY OF CERTAIN FOREIGN TRANSFERS. 

19 (a) IN GENERAL.—Paragraph (8) of section 6501(c) 

20 is amended— 

21 (1) by striking ‘‘In the case of any information’’ 

22 and inserting the following: 

23 ‘‘(A) IN GENERAL.—In the case of any in24 formation’’; and 

25 (2) by adding at the end the following: 


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1 ‘‘(B) APPLICATION TO FAILURES DUE TO

2 REASONABLE CAUSE.—If the failure to furnish 

3 the information referred to in subparagraph (A) 

4 is due to reasonable cause and not willful ne5 glect, subparagraph (A) shall apply only to the 

6 item or items related to such failure.’’. 

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

8 this section shall take effect as if included in section 513 

9 of the Hiring Incentives to Restore Employment Act. 

10 Subtitle B—Other Revenue 

11 Provisions 

12 SEC. 211. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 

13 GRANTOR RETAINED ANNUITY TRUSTS. 

14 (a) IN GENERAL.—Subsection (b) of section 2702 is 

15 amended— 

16 (1) by redesignating paragraphs (1), (2) and 

17 (3) as subparagraphs (A), (B), and (C), respectively, 

18 and by moving such subparagraphs (as so redesig19 nated) 2 ems to the right; 

20 (2) by striking ‘‘For purposes of’’ and inserting 

21 the following: 

22 ‘‘(1) IN GENERAL.—For purposes of’’; 

23 (3) by striking ‘‘paragraph (1) or (2)’’ in para24 graph (1)(C) (as so redesignated) and inserting 

25 ‘‘subparagraph (A) or (B)’’; and 


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1 (4) by adding at the end the following new 

2 paragraph: 

3 ‘‘(2) ADDITIONAL REQUIREMENTS WITH RE4 SPECT TO GRANTOR RETAINED ANNUITIES.—For 

5 purposes of subsection (a), in the case of an interest 

6 described in paragraph (1)(A) (determined without 

7 regard to this paragraph) which is retained by the 

8 transferor, such interest shall be treated as de9 scribed in such paragraph only if— 

10 ‘‘(A) the right to receive the fixed amounts 

11 referred to in such paragraph is for a term of 

12 not less than 10 years, 

13 ‘‘(B) such fixed amounts, when determined 

14 on an annual basis, do not decrease relative to 

15 any prior year during the first 10 years of the 

16 term referred to in subparagraph (A), and 

17 ‘‘(C) the remainder interest has a value 

18 greater than zero determined as of the time of 

19 the transfer.’’. 

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

21 this section shall apply to transfers made after the date 

22 of the enactment of this Act. 


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1 SEC. 212. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC 

2 BIOFUEL PRODUCER CREDIT. 

3 (a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) 

4 is amended— 

5 (1) by striking ‘‘or’’ at the end of subclause (I); 

6 (2) by striking the period at the end of sub7 clause (II) and inserting ‘‘, or’’; 

8 (3) by adding at the end the following new sub9 clause: 

10 ‘‘(III) such fuel has an acid num11 ber greater than 25.’’; and 

12 (4) by striking ‘‘UNPROCESSED’’ in the heading 

13 and inserting ‘‘CERTAIN’’. 

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

15 this section shall apply to fuels sold or used on or after 

16 January 1, 2010. 

17 SEC. 213. INCREASE IN INFORMATION RETURN PENALTIES. 

18 (a) FAILURE TO FILE CORRECT INFORMATION RE19 TURNS.— 

20 (1) IN GENERAL.—Subsections (a)(1), 

21 (b)(1)(A), and (b)(2)(A) of section 6721 are each 

22 amended by striking ‘‘$50’’ and inserting ‘‘$100’’. 

23 (2) AGGREGATE ANNUAL LIMITATION.—Sub24 sections (a)(1), (d)(1)(A), and (e)(3)(A) of section 

25 6721 are each amended by striking ‘‘$250,000’’ and 

26 inserting ‘‘$1,500,000’’. 


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1 (b) REDUCTION WHERE CORRECTION WITHIN 30 

2 DAYS.— 

3 (1) IN GENERAL.—Subparagraph (A) of section 

4 6721(b)(1) is amended by striking ‘‘$15’’ and insert5 ing ‘‘$30’’. 

6 (2) AGGREGATE ANNUAL LIMITATION.—Sub7 sections (b)(1)(B) and (d)(1)(B) of section 6721 are 

8 each amended by striking ‘‘$75,000’’ and inserting 

9 ‘‘$250,000’’. 

10 (c) REDUCTION WHERE CORRECTION ON OR BE11 FORE AUGUST 1.— 

12 (1) IN GENERAL.—Subparagraph (A) of section 

13 6721(b)(2) is amended by striking ‘‘$30’’ and insert14 ing ‘‘$60’’. 

15 (2) AGGREGATE ANNUAL LIMITATION.—Sub16 sections (b)(2)(B) and (d)(1)(C) of section 6721 are 

17 each amended by striking ‘‘$150,000’’ and inserting 

18 ‘‘$500,000’’. 

19 (d) AGGREGATE ANNUAL LIMITATIONS FOR PER20 SONS WITH GROSS RECEIPTS OF NOT MORE THAN

21 $5,000,000.— 

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

23 6721(d) is amended— 

24 (A) by striking ‘‘$100,000’’ in subpara25 graph (A) and inserting ‘‘$500,000’’; 


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1 (B) by striking ‘‘$25,000’’ in subpara2 graph (B) and inserting ‘‘$75,000’’; and 

3 (C) by striking ‘‘$50,000’’ in subparagraph 

4 (C) and inserting ‘‘$200,000’’. 

5 (2) TECHNICAL AMENDMENT.—Paragraph (1) 

6 of section 6721(d) is amended by striking ‘‘such tax7 able year’’ and inserting ‘‘such calendar year’’. 

8 (e) PENALTY IN CASE OF INTENTIONAL DIS9 REGARD.—Paragraph (2) of section 6721(e) is amended 

10 by striking ‘‘$100’’ and inserting ‘‘$250’’. 

11 (f) ADJUSTMENT FOR INFLATION.—Section 6721 is 

12 amended by adding at the end the following new sub13 section: 

14 ‘‘(f) ADJUSTMENT FOR INFLATION.— 

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

16 year beginning after 2014, each of the dollar 

17 amounts under subsections (a), (b), (d) (other than 

18 paragraph (2)(A) thereof), and (e) shall be increased 

19 by such dollar amount multiplied by the cost-of-liv20 ing adjustment determined under section 1(f)(3) de21 termined by substituting ‘calendar year 2011’ for 

22 ‘calendar year 1992’ in subparagraph (B) thereof. 

23 ‘‘(2) ADDITIONAL ADJUSTMENTS MADE ONLY

24 EVERY FIFTH YEAR.—Notwithstanding paragraph 

25 (1), in the case of any calendar year beginning after 


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1 2015 (other than every fifth calendar after 2015), 

2 each increase determined under paragraph (1) shall 

3 not exceed the amount of such increase determined 

4 for the preceding year. 

5 ‘‘(3) ROUNDING.—If any amount adjusted 

6 under paragraph (1)— 

7 ‘‘(A) is not less than $75,000 and is not 

8 a multiple of $500, such amount shall be 

9 rounded to the next lowest multiple of $500, 

10 and 

11 ‘‘(B) is not described in subparagraph (A) 

12 and is not a multiple of $10, such amount shall 

13 be rounded to the next lowest multiple of $10.’’. 

14 (g) FAILURE TO FURNISH CORRECT PAYEE STATE15 MENTS.—Section 6722 is amended to read as follows: 

16 ‘‘SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATE17 MENTS. 

18 ‘‘(a) IMPOSITION OF PENALTY.— 

19 ‘‘(1) GENERAL RULE.—In the case of each fail20 ure described in paragraph (2) by any person with 

21 respect to a payee statement, such person shall pay 

22 a penalty of $100 for each statement with respect to 

23 which such a failure occurs, but the total amount 

24 imposed on such person for all such failures during 

25 any calendar year shall not exceed $1,500,000. 


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1 ‘‘(2) FAILURES SUBJECT TO PENALTY.—For 

2 purposes of paragraph (1), the failures described in 

3 this paragraph are— 

4 ‘‘(A) any failure to furnish a payee state5 ment on or before the date prescribed therefor 

6 to the person to whom such statement is re7 quired to be furnished, and 

8 ‘‘(B) any failure to include all of the infor9 mation required to be shown on a payee state10 ment or the inclusion of incorrect information. 

11 ‘‘(b) REDUCTION WHERE CORRECTION IN SPECIFIED

12 PERIOD.— 

13 ‘‘(1) CORRECTION WITHIN 30 DAYS.—If any 

14 failure described in subsection (a)(2) is corrected on 

15 or before the day 30 days after the required filing 

16 date— 

17 ‘‘(A) the penalty imposed by subsection (a) 

18 shall be $30 in lieu of $100, and 

19 ‘‘(B) the total amount imposed on the per20 son for all such failures during any calendar 

21 year which are so corrected shall not exceed 

22 $250,000. 

23 ‘‘(2) FAILURES CORRECTED ON OR BEFORE AU24 GUST 1.—If any failure described in subsection 

25 (a)(2) is corrected after the 30th day referred to in 


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1 paragraph (1) but on or before August 1 of the cal2 endar year in which the required filing date occurs— 

3 ‘‘(A) the penalty imposed by subsection (a) 

4 shall be $60 in lieu of $100, and 

5 ‘‘(B) the total amount imposed on the per6 son for all such failures during the calendar 

7 year which are so corrected shall not exceed 

8 $500,000. 

9 ‘‘(c) EXCEPTION FOR DE MINIMIS FAILURES.— 

10 ‘‘(1) IN GENERAL.—If— 

11 ‘‘(A) a payee statement is furnished to the 

12 person to whom such statement is required to 

13 be furnished, 

14 ‘‘(B) there is a failure described in sub15 section (a)(2)(B) (determined after the applica16 tion of section 6724(a)) with respect to such 

17 statement, and 

18 ‘‘(C) such failure is corrected on or before 

19 August 1 of the calendar year in which the re20 quired filing date occurs, 

21 for purposes of this section, such statement shall be 

22 treated as having been furnished with all of the cor23 rect required information. 


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1 ‘‘(2) LIMITATION.—The number of payee state2 ments to which paragraph (1) applies for any cal3 endar year shall not exceed the greater of— 

4 ‘‘(A) 10, or 

5 ‘‘(B) one-half of 1 percent of the total 

6 number of payee statements required to be filed 

7 by the person during the calendar year. 

8 ‘‘(d) LOWER LIMITATIONS FOR PERSONS WITH

9 GROSS RECEIPTS OF NOT MORE THAN $5,000,000.— 

10 ‘‘(1) IN GENERAL.—If any person meets the 

11 gross receipts test of paragraph (2) with respect to 

12 any calendar year, with respect to failures during 

13 such calendar year— 

14 ‘‘(A) subsection (a)(1) shall be applied by 

15 substituting ‘$500,000’ for ‘$1,500,000’, 

16 ‘‘(B) subsection (b)(1)(B) shall be applied 

17 by substituting ‘$75,000’ for ‘$250,000’, and 

18 ‘‘(C) subsection (b)(2)(B) shall be applied 

19 by substituting ‘$200,000’ for ‘$500,000’. 

20 ‘‘(2) GROSS RECEIPTS TEST.—A person meets 

21 the gross receipts test of this paragraph if such per22 son meets the gross receipts test of section 

23 6721(d)(2). 

24 ‘‘(e) PENALTY IN CASE OF INTENTIONAL DIS25 REGARD.—If 1 or more failures to which subsection (a) 


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1 applies are due to intentional disregard of the requirement 

2 to furnish a payee statement (or the correct information 

3 reporting requirement), then, with respect to each such 

4 failure— 

5 ‘‘(1) subsections (b), (c), and (d) shall not 

6 apply, 

7 ‘‘(2) the penalty imposed under subsection 

8 (a)(1) shall be $250, or, if greater— 

9 ‘‘(A) in the case of a payee statement 

10 other than a statement required under section 

11 6045(b), 6041A(e) (in respect of a return re12 quired under section 6041A(b)), 6050H(d), 

13 6050J(e), 6050K(b), or 6050L(c), 10 percent 

14 of the aggregate amount of the items required 

15 to be reported correctly, or 

16 ‘‘(B) in the case of a payee statement re17 quired under section 6045(b), 6050K(b), or 

18 6050L(c), 5 percent of the aggregate amount of 

19 the items required to be reported correctly, and 

20 ‘‘(3) in the case of any penalty determined 

21 under paragraph (2)— 

22 ‘‘(A) the $1,500,000 limitation under sub23 section (a) shall not apply, and 


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1 ‘‘(B) such penalty shall not be taken into 

2 account in applying such limitation to penalties 

3 not determined under paragraph (2). 

4 ‘‘(f) ADJUSTMENT FOR INFLATION.— 

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

6 year beginning after 2014, each of the dollar 

7 amounts under subsections (a), (b), (d)(1), and (e) 

8 shall be increased by such dollar amount multiplied 

9 by the cost-of-living adjustment determined under 

10 section 1(f)(3) determined by substituting ‘calendar 

11 year 2011’ for ‘calendar year 1992’ in subparagraph 

12 (B) thereof. 

13 ‘‘(2) ADDITIONAL ADJUSTMENTS MADE ONLY

14 EVERY FIFTH YEAR.—Notwithstanding paragraph 

15 (1), in the case of any calendar year beginning after 

16 2015 (other than every fifth calendar after 2015), 

17 each increase determined under paragraph (1) shall 

18 not exceed the amount of such increase determined 

19 for the preceding year. 

20 ‘‘(3) ROUNDING.—If any amount adjusted 

21 under paragraph (1)— 

22 ‘‘(A) is not less than $75,000 and is not 

23 a multiple of $500, such amount shall be 

24 rounded to the next lowest multiple of $500, 

25 and 


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1 ‘‘(B) is not described in subparagraph (A) 

2 and is not a multiple of $10, such amount shall 

3 be rounded to the next lowest multiple of $10.’’. 

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

5 this section shall apply with respect to information returns 

6 required to be filed on or after January 1, 2011. 

7 SEC. 214. TREATMENT OF SECURITIES OF A CONTROLLED 

8 CORPORATION EXCHANGED FOR ASSETS IN 

9 CERTAIN REORGANIZATIONS. 

10 (a) IN GENERAL.—Section 361 is amended by adding 

11 at the end the following new subsection: 

12 ‘‘(d) SPECIAL RULES FOR TRANSACTIONS INVOLVING

13 SECTION 355 DISTRIBUTIONS.—In the case of a reorga14 nization described in section 368(a)(1)(D) with respect to 

15 which stock or securities of the corporation to which the 

16 assets are transferred are distributed in a transaction 

17 which qualifies under section 355— 

18 ‘‘(1) this section shall be applied by substituting 

19 ‘stock other than nonqualified preferred stock (as 

20 defined in section 351(g)(2))’ for ‘stock or securities’ 

21 in subsections (a) and (b)(1), and 

22 ‘‘(2) the first sentence of subsection (b)(3) shall 

23 apply only to the extent that the sum of the money 

24 and the fair market value of the other property 

25 transferred to such creditors does not exceed the adVerDate Mar 15 2010 00:48 Aug 10, 2010 Jkt 089200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H5982.IH H5982

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1 justed bases of such assets transferred (reduced by 

2 the amount of the liabilities assumed (within the 

3 meaning of section 357(c))).’’. 

4 (b) CONFORMING AMENDMENT.—Paragraph (3) of 

5 section 361(b) is amended by striking the last sentence. 

6 (c) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section 

9 shall apply to exchanges after the date of the enact10 ment of this Act. 

11 (2) TRANSITION RULE.—The amendments 

12 made by this section shall not apply to any exchange 

13 pursuant to a transaction which is— 

14 (A) made pursuant to an agreement which 

15 was binding on March 15, 2010, and at all 

16 times thereafter; 

17 (B) described in a ruling request submitted 

18 to the Internal Revenue Service on or before 

19 such date; or 

20 (C) described on or before such date in a 

21 public announcement or in a filing with the Se22 curities and Exchange Commission. 


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1 TITLE III—PAYGO COMPLIANCE 

2 SEC. 301. PAYGO COMPLIANCE. 

3 The budgetary effects of this Act, for the purpose of 

4 complying with the Statutory Pay-As-You-Go Act of 2010, 

5 shall be determined by reference to the latest statement 

6 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

7 Act, submitted for printing in the Congressional Record 

8 by the Chairman of the House Budget Committee, pro9 vided that such statement has been submitted prior to the 

10 vote on passage. 

Æ 


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