IIB 

110TH CONGRESS 

2D SESSION H. R. 5719 

IN THE SENATE OF THE UNITED STATES 

APRIL 16, 2008 

Received; read twice and referred to the Committee on Finance 

AN ACT 

To amend the Internal Revenue Code of 1986 to conform 

return preparer penalty standards, delay implementation 

of withholding taxes on government contractors, enhance 

taxpayer protections, assist low-income taxpayers, 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, ETC. 

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

3 ‘‘Taxpayer Assistance and Simplification Act of 2008’’. 

4 (b) AMENDMENT OF 1986 CODE.—Except as other5 wise expressly provided, whenever in this Act an amend6 ment or repeal is expressed in terms of an amendment 

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

8 shall be considered to be made to a section or other provi9 sion of the Internal Revenue Code of 1986. 

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

11 this Act is as follows: 

Sec. 1. Short title, etc. 

Sec. 2. Modification of penalty on understatement of taxpayer’s liability by tax 

return preparer. 

Sec. 3. Removal of cellular telephones (or similar telecommunications equipment) from listed property. 

Sec. 4. Delay of application of withholding requirement on certain governmental 

payments for goods and services. 

Sec. 5. Elderly and disabled individuals receiving in-home care under certain 

government programs not subject to employment tax provisions. 

Sec. 6. Referrals to low income taxpayer clinics permitted. 

Sec. 7. Programs for the benefit of low-income taxpayers. 

Sec. 8. EITC outreach. 

Sec. 9. Prohibition on IRS debt indicators for predatory refund anticipation 

loans. 

Sec. 10. Study on delivery of tax refunds. 

Sec. 11. Extension of time for return of property for wrongful levy. 

Sec. 12. Individuals held harmless on wrongful levy, etc., on individual retirement plan. 

Sec. 13. Taxpayer notification of suspected identity theft. 

Sec. 14. Repeal of authority to enter into private debt collection contracts. 

Sec. 15. Clarification of IRS unclaimed refund authority. 

Sec. 16. Prohibition on misuse of Department of the Treasury names and symbols. 

Sec. 17. Substantiation of amounts paid or distributed out of health savings account. 

Sec. 18. Certain domestically controlled foreign persons performing services 

under contract with United States Government treated as 

American employers. 

Sec. 19. Time for payment of corporate estimated tax. 

Sec. 20 GAO study on health savings accounts. 


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1 SEC. 2. MODIFICATION OF PENALTY ON UNDERSTATEMENT 

2 OF TAXPAYER’S LIABILITY BY TAX RETURN 

3 PREPARER. 

4 (a) IN GENERAL.—Subsection (a) of section 6694 

5 (relating to understatement due to unreasonable positions) 

6 is amended to read as follows: 

7 ‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE

8 POSITIONS.— 

9 ‘‘(1) IN GENERAL.—If a tax return preparer— 

10 ‘‘(A) prepares any return or claim of re11 fund with respect to which any part of an un12 derstatement of liability is due to a position de13 scribed in paragraph (2), and 

14 ‘‘(B) knew (or reasonably should have 

15 known) of the position, 

16 such tax return preparer shall pay a penalty with re17 spect to each such return or claim in an amount 

18 equal to the greater of $1,000 or 50 percent of the 

19 income derived (or to be derived) by the tax return 

20 preparer with respect to the return or claim. 

21 ‘‘(2) UNREASONABLE POSITION.— 

22 ‘‘(A) IN GENERAL.—Except as otherwise 

23 provided in this paragraph, a position is de24 scribed in this paragraph unless there is or was 

25 substantial authority for the position. 


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1 ‘‘(B) DISCLOSED POSITIONS.—If the posi2 tion was disclosed as provided in section 

3 6662(d)(2)(B)(ii)(I) and is not a position to 

4 which subparagraph (C) applies, the position is 

5 described in this paragraph unless there is a 

6 reasonable basis for the position. 

7 ‘‘(C) TAX SHELTERS AND REPORTABLE

8 TRANSACTIONS.—If the position is with respect 

9 to a tax shelter (as defined in section 

10 6662(d)(2)(C)(ii)) or a reportable transaction 

11 to which section 6662A applies, the position is 

12 described in this paragraph unless it is reason13 able to believe that the position would more 

14 likely than not be sustained on its merits. 

15 ‘‘(3) REASONABLE CAUSE EXCEPTION.—No 

16 penalty shall be imposed under this subsection if it 

17 is shown that there is reasonable cause for the un18 derstatement and the tax return preparer acted in 

19 good faith.’’. 

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

21 this section shall apply— 

22 (1) in the case of a position described in sub23 paragraph (A) or (B) of section 6694(a)(2) of the 

24 Internal Revenue Code of 1986 (as amended by this 


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1 section), to returns prepared after May 25, 2007, 

2 and 

3 (2) in the case of a position described in sub4 paragraph (C) of such section (as amended by this 

5 section), to returns prepared for taxable years end6 ing after the date of the enactment of this Act. 

7 SEC. 3. REMOVAL OF CELLULAR TELEPHONES (OR SIMILAR 

8 TELECOMMUNICATIONS EQUIPMENT) FROM 

9 LISTED PROPERTY. 

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

11 280F(d)(4) (defining listed property) is amended by in12 serting ‘‘and’’ at the end of clause (iv), by striking clause 

13 (v), and by redesignating clause (vi) as clause (v). 

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

15 subsection (a) shall apply to taxable years beginning after 

16 December 31, 2008. 

17 SEC. 4. DELAY OF APPLICATION OF WITHHOLDING RE18 QUIREMENT ON CERTAIN GOVERNMENTAL 

19 PAYMENTS FOR GOODS AND SERVICES. 

20 (a) IN GENERAL.—Subsection (b) of section 511 of 

21 the Tax Increase Prevention and Reconciliation Act of 

22 2005 is amended by striking ‘‘December 31, 2010’’ and 

23 inserting ‘‘December 31, 2011’’. 

24 (b) REPORT TO CONGRESS.—Not later than 6 

25 months after the date of the enactment of this Act, the 


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1 Secretary of the Treasury shall submit to the Committee 

2 on Ways and Means of the House of Representatives and 

3 the Committee on Finance of the Senate a report with 

4 respect to the withholding requirements of section 3402(t) 

5 of the Internal Revenue Code of 1986, including a detailed 

6 analysis of— 

7 (1) the problems, if any, which are anticipated 

8 in administering and complying with such require9 ments, 

10 (2) the burdens, if any, that such requirements 

11 will place on governments and businesses (taking 

12 into account such mechanisms as may be necessary 

13 to administer such requirements), and 

14 (3) the application of such requirements to 

15 small expenditures for services and goods by govern16 ments. 

17 SEC. 5. ELDERLY AND DISABLED INDIVIDUALS RECEIVING 

18 IN-HOME CARE UNDER CERTAIN GOVERN19 MENT PROGRAMS NOT SUBJECT TO EMPLOY20 MENT TAX PROVISIONS. 

21 (a) IN GENERAL.—Chapter 25 (relating to general 

22 provisions relating to employment taxes) is amended by 

23 adding at the end the following new section: 


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1 ‘‘SEC. 3511. ELDERLY AND DISABLED INDIVIDUALS RECEIV2 ING IN-HOME CARE UNDER CERTAIN GOV3 ERNMENT PROGRAMS. 

4 ‘‘(a) IN GENERAL.—In the case of amounts paid 

5 under a home care service program to a home care service 

6 provider by the fiscal administrator of such program— 

7 ‘‘(1) the home care service recipient shall not be 

8 liable for the payment of any taxes imposed under 

9 this subtitle with respect to amounts paid for the 

10 provision of services under such program, and 

11 ‘‘(2) the fiscal administrator shall be so liable. 

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

13 ‘‘(1) HOME CARE SERVICE PROGRAM.—The 

14 term ‘home care service program’ means a State or 

15 local government program— 

16 ‘‘(A) any portion of which is funded with 

17 Federal funds, and 

18 ‘‘(B) under which domestic services are 

19 provided to elderly or disabled individuals in 

20 their homes. 

21 Such term shall not include any program to the ex22 tent home care service recipients make payments to 

23 the home care service providers for such in-home do24 mestic services. 

25 ‘‘(2) HOME CARE SERVICE PROVIDER.—The 

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1 vidual who provides domestic services to a home care 

2 service recipient under a home care service program. 

3 ‘‘(3) HOME CARE SERVICE RECIPIENT.—The 

4 term ‘home care service recipient’ means any indi5 vidual receiving domestic services under a home care 

6 service program. 

7 ‘‘(4) FISCAL ADMINISTRATOR.—The term ‘fiscal 

8 administrator’ means any person or governmental 

9 entity who pays amounts under a home care service 

10 program to home care service providers for the pro11 vision of domestic services under such program. 

12 ‘‘(c) RETURNS BY FISCAL ADMINISTRATOR.—For 

13 purposes of this section— 

14 ‘‘(1) IN GENERAL.—Returns relating to taxes 

15 imposed or amounts required to be withheld under 

16 this subtitle shall be made under the identifying 

17 number of the fiscal administrator. 

18 ‘‘(2) IDENTIFICATION OF SERVICE RECIPI19 ENT.—The fiscal administrator shall, to the extent 

20 required under regulations prescribed by the Sec21 retary, make a return setting forth— 

22 ‘‘(A) the name, address, and identifying 

23 number of each home care service recipient for 

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1 trator under the home care services program, 

2 and 

3 ‘‘(B) such other information as the Sec4 retary may require. 

5 ‘‘(d) REGULATIONS.—The Secretary may prescribe 

6 such regulations or other guidance as may be necessary 

7 to carry out the purposes of this section, including requir8 ing deposits of any tax imposed under this subtitle.’’. 

9 (b) SERVICE RECIPIENT IDENTIFICATION RETURN

10 TREATED AS INFORMATION RETURN.—Paragraph (3) of 

11 section 6724(d) is amended by striking ‘‘and’’ at the end 

12 of subparagraph (C)(ii), by striking the period at the end 

13 of subparagraph (D)(ii) and inserting ‘‘, and’’, and by 

14 adding at the end the following new subparagraph: 

15 ‘‘(E) any requirement under section 

16 3511(c)(2).’’. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for chapter 25 is amended by adding at the end the fol19 lowing new item: 

‘‘Sec. 3511. Elderly and disabled individuals receiving in-home care under certain government programs.’’. 

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

21 this section shall apply to amounts paid after December 

22 31, 2008. 


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1 SEC. 6. REFERRALS TO LOW INCOME TAXPAYER CLINICS 

2 PERMITTED. 

3 (a) IN GENERAL.—Subsection (c) of section 7526 of 

4 the Internal Revenue Code of 1986 is amended by adding 

5 at the end the following new paragraph: 

6 ‘‘(6) TREASURY EMPLOYEES PERMITTED TO

7 REFER TAXPAYERS TO QUALIFIED LOW-INCOME TAX8 PAYER CLINICS.—Notwithstanding any other provi9 sion of law, officers and employees of the Depart10 ment of the Treasury may refer taxpayers for advice 

11 and assistance to qualified low-income taxpayer clin12 ics receiving funding under this section.’’. 

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

14 this section shall apply to referrals made after the date 

15 of the enactment of this Act. 

16 SEC. 7. PROGRAMS FOR THE BENEFIT OF LOW-INCOME 

17 TAXPAYERS. 

18 (a) VOLUNTEER INCOME TAX ASSISTANCE PRO19 GRAMS.—Chapter 77 (relating to miscellaneous provi20 sions) is amended by inserting after section 7526 the fol21 lowing new section: 

22 ‘‘SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PRO23 GRAMS. 

24 ‘‘(a) IN GENERAL.—The Secretary may, subject to 

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1 vide matching funds for the development, expansion, or 

2 continuation of volunteer income tax assistance programs. 

3 ‘‘(b) VOLUNTEER INCOME TAX ASSISTANCE PRO4 GRAM.—For purposes of this section, the term ‘volunteer 

5 income tax assistance program’ means a program— 

6 ‘‘(1) which does not charge taxpayers for its re7 turn preparation services, 

8 ‘‘(2) which operates programs to assist low and 

9 moderate-income (as determined by the Secretary) 

10 taxpayers in preparing and filing their Federal in11 come tax returns, and 

12 ‘‘(3) in which all of the volunteers who assist in 

13 the preparation of Federal income tax returns meet 

14 the requirements prescribed by the Secretary. 

15 ‘‘(c) SPECIAL RULES AND LIMITATIONS.— 

16 ‘‘(1) AGGREGATE LIMITATION.—Unless other17 wise provided by specific appropriation, the Sec18 retary shall not allocate more than $10,000,000 per 

19 year (exclusive of costs of administering the pro20 gram) to grants under this section. 

21 ‘‘(2) OTHER APPLICABLE RULES.—Rules simi22 lar to the rules under paragraphs (2) through (6) of 

23 section 7526(c) shall apply with respect to the 

24 awarding of grants to volunteer income tax assist25 ance programs.’’. 


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1 (b) INCREASE IN AUTHORIZED GRANTS FOR LOW-IN2 COME TAXPAYER CLINICS.—Paragraph (1) of section 

3 7526(c) (relating to aggregate limitation) is amended by 

4 striking ‘‘$6,000,000’’ and inserting ‘‘$10,000,000’’. 

5 (c) CLERICAL AMENDMENTS.— 

6 (1) Section 7526(c)(5) is amended by inserting 

7 ‘‘qualified’’ before ‘‘low-income’’. 

8 (2) The table of sections for chapter 77 is 

9 amended by inserting after the item relating to sec10 tion 7526 the following new item: 

‘‘Sec. 7526A. Volunteer income tax assistance programs.’’. 

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

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

13 of this Act. 

14 SEC. 8. EITC OUTREACH. 

15 (a) IN GENERAL.—Section 32 (relating to earned in16 come) is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(n) NOTIFICATION OF POTENTIAL ELIGIBILITY FOR

19 CREDIT AND REFUND.— 

20 ‘‘(1) IN GENERAL.—To the extent possible and 

21 on an annual basis, the Secretary shall provide to 

22 each taxpayer who— 

23 ‘‘(A) for any preceding taxable year for 

24 which credit or refund is not precluded by sec25 tion 6511, and 


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1 ‘‘(B) did not claim the credit under sub2 section (a) but may be allowed such credit for 

3 any such taxable year based on return or return 

4 information (as defined in section 6103(b)) 

5 available to the Secretary, 

6 notice that such taxpayer may be eligible to claim 

7 such credit and a refund for such taxable year. 

8 ‘‘(2) NOTICE.—Notice provided under para9 graph (1) shall be in writing and sent to the last 

10 known address of the taxpayer.’’. 

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

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

13 of this Act. 

14 SEC. 9. PROHIBITION ON IRS DEBT INDICATORS FOR PRED15 ATORY REFUND ANTICIPATION LOANS. 

16 (a) IN GENERAL.—Subsection (f) of section 6011 (re17 lating to promotion of electronic filing) is amended by add18 ing at the end the following new paragraph: 

19 ‘‘(3) PROHIBITION ON IRS DEBT INDICATORS

20 FOR PREDATORY REFUND ANTICIPATION LOANS.— 

21 ‘‘(A) IN GENERAL.—In carrying out any 

22 program under this subsection, the Secretary 

23 shall not provide a debt indicator to any person 

24 with respect to any refund anticipation loan if 

25 the Secretary determines that the business 


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1 practices of such person involve refund anticipa2 tion loans and related charges and fees that are 

3 predatory. 

4 ‘‘(B) REFUND ANTICIPATION LOAN.—For 

5 purposes of this paragraph, the term ‘refund 

6 anticipation loan’ means a loan of money or of 

7 any other thing of value to a taxpayer secured 

8 by the taxpayer’s anticipated receipt of a Fed9 eral tax refund. 

10 ‘‘(C) IRS DEBT INDICATOR.—For purposes 

11 of this paragraph, the term ‘debt indicator’ 

12 means a notification provided through a tax re13 turn’s acknowledgment file that a refund will be 

14 offset to repay debts for delinquent Federal or 

15 State taxes, student loans, child support, or 

16 other Federal agency debt.’’. 

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

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

19 of this Act. 

20 SEC. 10. STUDY ON DELIVERY OF TAX REFUNDS. 

21 (a) IN GENERAL.—The Secretary of the Treasury, in 

22 consultation with the National Taxpayer Advocate, shall 

23 conduct a study on the feasibility of delivering tax refunds 

24 on debit cards, prepaid cards, and other electronic means 


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1 to assist individuals that do not have access to financial 

2 accounts or institutions. 

3 (b) REPORT.—Not later than 1 year after the date 

4 of the enactment of this Act, the Secretary of the Treasury 

5 shall submit a report to Congress containing the results 

6 of the study conducted under subsection (a). 

7 SEC. 11. EXTENSION OF TIME FOR RETURN OF PROPERTY 

8 FOR WRONGFUL LEVY. 

9 (a) EXTENSION OF TIME FOR RETURN OF PROPERTY

10 SUBJECT TO LEVY.—Subsection (b) of section 6343 (re11 lating to return of property) is amended by striking ‘‘9 

12 months’’ and inserting ‘‘2 years’’. 

13 (b) PERIOD OF LIMITATION ON SUITS.—Subsection 

14 (c) of section 6532 (relating to suits by persons other than 

15 taxpayers) is amended— 

16 (1) in paragraph (1) by striking ‘‘9 months’’ 

17 and inserting ‘‘2 years’’, and 

18 (2) in paragraph (2) by striking ‘‘9-month’’ and 

19 inserting ‘‘2-year’’. 

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

21 this section shall apply to— 

22 (1) levies made after the date of the enactment 

23 of this Act, and 

24 (2) levies made on or before such date if the 9- 

25 month period has not expired under section 6343(b) 


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1 of the Internal Revenue Code of 1986 (without re2 gard to this section) as of such date. 

3 SEC. 12. INDIVIDUALS HELD HARMLESS ON WRONGFUL 

4 LEVY, ETC., ON INDIVIDUAL RETIREMENT 

5 PLAN. 

6 (a) IN GENERAL.—Section 6343 (relating to author7 ity to release levy and return property) is amended by add8 ing at the end the following new subsection: 

9 ‘‘(f) INDIVIDUALS HELD HARMLESS ON WRONGFUL

10 LEVY, ETC. ON INDIVIDUAL RETIREMENT PLAN.— 

11 ‘‘(1) IN GENERAL.—If the Secretary determines 

12 that an individual retirement plan has been levied 

13 upon in a case to which subsection (b) or (d)(2)(A) 

14 applies, an amount equal to the sum of— 

15 ‘‘(A) the amount of money returned by the 

16 Secretary on account of such levy, and 

17 ‘‘(B) interest paid under subsection (c) on 

18 such amount of money, 

19 may be deposited into such individual retirement 

20 plan or any other individual retirement plan (other 

21 than an endowment contract) to which a rollover 

22 from the plan levied upon is permitted. An amount 

23 may not be deposited into a Roth IRA under the 

24 preceding sentence unless the individual retirement 


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1 plan levied upon was a Roth IRA at the time of such 

2 levy. 

3 ‘‘(2) TREATMENT AS ROLLOVER.—If amounts 

4 are deposited into an individual retirement plan 

5 under paragraph (1) not later than the 60th day 

6 after the date on which the individual receives the 

7 amounts under paragraph (1)— 

8 ‘‘(A) such deposit shall be treated as a 

9 rollover described in section 408(d)(3)(A)(i), 

10 ‘‘(B) to the extent the deposit includes in11 terest paid under subsection (c), such interest 

12 shall not be includible in gross income, and 

13 ‘‘(C) such deposit shall not be taken into 

14 account under section 408(d)(3)(B). 

15 For purposes of subparagraph (B), an amount shall 

16 be treated as interest only to the extent that the 

17 amount deposited exceeds the amount of the levy. 

18 ‘‘(3) REFUND, ETC., OF INCOME TAX ON

19 LEVY.—If any amount is includible in gross income 

20 for a taxable year by reason of a levy referred to in 

21 paragraph (1) and any portion of such amount is 

22 treated as a rollover under paragraph (2), any tax 

23 imposed by chapter 1 on such portion shall not be 

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1 ment made on the due date for filing the return of 

2 tax for such taxable year. 

3 ‘‘(4) INTEREST.—Notwithstanding subsection 

4 (d), interest shall be allowed under subsection (c) in 

5 a case in which the Secretary makes a determination 

6 described in subsection (d)(2)(A) with respect to a 

7 levy upon an individual retirement plan.’’. 

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

9 this section shall apply to amounts paid under subsections 

10 (b), (c), and (d)(2)(A) of section 6343 of the Internal Rev11 enue Code of 1986 after the date of the enactment of this 

12 Act. 

13 SEC. 13. TAXPAYER NOTIFICATION OF SUSPECTED IDEN14 TITY THEFT. 

15 (a) IN GENERAL.—Chapter 77 (relating to miscella16 neous provisions) is amended by adding at the end the 

17 following new section: 

18 ‘‘SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY 

19 THEFT. 

20 ‘‘If, in the course of an investigation under the inter21 nal revenue laws, the Secretary determines that there was 

22 or may have been an unauthorized use of the identity of 

23 the taxpayer or a dependent of the taxpayer, the Secretary 

24 shall, to the extent permitted by law— 


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1 ‘‘(1) as soon as practicable and without jeop2 ardizing such investigation, notify the taxpayer of 

3 such determination, and 

4 ‘‘(2) if any person is criminally charged by in5 dictment or information with respect to such unau6 thorized use, notify such taxpayer as soon as prac7 ticable of such charge.’’. 

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

9 for chapter 77 is amended by adding at the end the fol10 lowing new item: 

‘‘Sec. 7529. Notification of suspected identity theft.’’. 

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

12 this section shall apply to determinations made after the 

13 date of the enactment of this Act. 

14 SEC. 14. REPEAL OF AUTHORITY TO ENTER INTO PRIVATE 

15 DEBT COLLECTION CONTRACTS. 

16 (a) IN GENERAL.—Subchapter A of chapter 64 is 

17 amended by striking section 6306. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Subchapter B of chapter 76 is amended by 

20 striking section 7433A. 

21 (2) Section 7811 is amended by striking sub22 section (g). 

23 (3) Section 1203 of the Internal Revenue Serv24 ice Restructuring Act of 1998 is amended by strik25 ing subsection (e). 


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1 (4) The table of sections for subchapter A of 

2 chapter 64 is amended by striking the item relating 

3 to section 6306. 

4 (5) The table of sections for subchapter B of 

5 chapter 76 is amended by striking the item relating 

6 to section 7433A. 

7 (c) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the amendments made by 

10 this section shall take effect on the date of the en11 actment of this Act. 

12 (2) EXCEPTION FOR EXISTING CONTRACTS, 

13 ETC.—The amendments made by this section shall 

14 not apply to any contract which was entered into be15 fore March 1, 2008, and is not renewed or extended 

16 on or after such date. 

17 (3) UNAUTHORIZED CONTRACTS AND EXTEN18 SIONS TREATED AS VOID.—Any qualified tax collec19 tion contract (as defined in section 6306 of the In20 ternal Revenue Code of 1986, as in effect before its 

21 repeal) which is entered into on or after March 1, 

22 2008, and any extension or renewal on or after such 

23 date of any qualified tax collection contract (as so 

24 defined), shall be void. 


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1 SEC. 15. CLARIFICATION OF IRS UNCLAIMED REFUND AU2 THORITY. 

3 Paragraph (1) of section 6103(m) (relating to tax re4 funds) is amended by inserting ‘‘, and through any other 

5 means of mass communication,’’ after ‘‘media’’. 

6 SEC. 16. PROHIBITION ON MISUSE OF DEPARTMENT OF 

7 THE TREASURY NAMES AND SYMBOLS. 

8 (a) IN GENERAL.—Subsection (a) of section 333 of 

9 title 31, United States Code, is amended by inserting 

10 ‘‘Internet domain address,’’ after ‘‘solicitation,’’ both 

11 places it appears. 

12 (b) PENALTY FOR MISUSE BY ELECTRONIC

13 MEANS.—Subsections (c)(2) and (d)(1) of section 333 of 

14 such Code are each amended by inserting ‘‘or any other 

15 mass communications by electronic means,’’ after ‘‘tele16 cast,’’. 

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

18 this section shall apply with respect to violations occurring 

19 after the date of the enactment of this Act. 

20 SEC. 17. SUBSTANTIATION OF AMOUNTS PAID OR DISTRIB21 UTED OUT OF HEALTH SAVINGS ACCOUNT. 

22 (a) IN GENERAL.—Paragraph (1) of section 223(f) 

23 (relating to amounts used for qualified medical expenses) 

24 is amended by inserting ‘‘(and, in the case of amounts 

25 paid or distributed after December 31, 2010, substan26 tiated in a manner similar to the substantiation required 


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1 for flexible spending arrangements as related to account 

2 beneficiary substantiation requirements)’’ after ‘‘account 

3 beneficiary’’. 

4 (b) REPORTS.—Subsection (h) of section 223 (relat5 ing to reports) is amended— 

6 (1) by redesignating paragraphs (1) and (2) as 

7 subparagraphs (A) and (B), respectively, 

8 (2) by moving the text of subparagraphs (A) 

9 and (B) (as so redesignated) and the last sentence 

10 2 ems to the right, 

11 (3) by striking ‘‘(h) REPORTS.—The Secretary 

12 may require—’’ and inserting the following: 

13 ‘‘(h) REPORTS.— 

14 ‘‘(1) IN GENERAL.—The Secretary may re15 quire—’’, and 

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

17 paragraph: 

18 ‘‘(2) RELATING TO SUBSTANTIATION.—Not 

19 later than January 15 of each calendar year after 

20 2011, the trustee of a health savings account shall 

21 make a report regarding such account to the Sec22 retary and the account beneficiary setting forth— 

23 ‘‘(A) the name, address, and identifying 

24 number of the account beneficiary, and 


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1 ‘‘(B) the amount paid or distributed out of 

2 such account for the preceding calendar year 

3 not substantiated in accordance with subsection 

4 (f)(1).’’. 

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

6 this section shall apply with respect to amounts paid or 

7 distributed out of health savings accounts after December 

8 31, 2010. 

9 SEC. 18. CERTAIN DOMESTICALLY CONTROLLED FOREIGN 

10 PERSONS PERFORMING SERVICES UNDER 

11 CONTRACT WITH UNITED STATES GOVERN12 MENT TREATED AS AMERICAN EMPLOYERS. 

13 (a) FICA TAXES.—Section 3121 (relating to defini14 tions) is amended by adding at the end the following new 

15 subsection: 

16 ‘‘(z) TREATMENT OF CERTAIN FOREIGN PERSONS AS

17 AMERICAN EMPLOYERS.— 

18 ‘‘(1) IN GENERAL.—If any employee of a for19 eign person is performing services in connection with 

20 a contract between the United States Government 

21 (or any instrumentality thereof) and any member of 

22 any domestically controlled group of entities which 

23 includes such foreign person, such foreign person 

24 shall be treated for purposes of this chapter as an 


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1 American employer with respect to such services per2 formed by such employee. 

3 ‘‘(2) DOMESTICALLY CONTROLLED GROUP OF

4 ENTITIES.—For purposes of this subsection— 

5 ‘‘(A) IN GENERAL.—The term ‘domesti6 cally controlled group of entities’ means a con7 trolled group of entities the common parent of 

8 which is a domestic corporation. 

9 ‘‘(B) CONTROLLED GROUP OF ENTITIES.— 

10 The term ‘controlled group of entities’ means a 

11 controlled group of corporations as defined in 

12 section 1563(a)(1), except that— 

13 ‘‘(i) ‘more than 50 percent’ shall be 

14 substituted for ‘at least 80 percent’ each 

15 place it appears therein, and 

16 ‘‘(ii) the determination shall be made 

17 without regard to subsections (a)(4) and 

18 (b)(2) of section 1563. 

19 A partnership or any other entity (other than a 

20 corporation) shall be treated as a member of a 

21 controlled group of entities if such entity is con22 trolled (within the meaning of section 

23 954(d)(3)) by members of such group (includ24 ing any entity treated as a member of such 

25 group by reason of this sentence). 


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1 ‘‘(3) LIABILITY OF COMMON PARENT.—In the 

2 case of a foreign person who is a member of any do3 mestically controlled group of entities, the common 

4 parent of such group shall be jointly and severally 

5 liable for any tax under this chapter for which such 

6 foreign person is liable by reason of this subsection, 

7 and for any penalty imposed on such person by this 

8 title with respect to any failure to pay such tax or 

9 to file any return or statement with respect to such 

10 tax or wages subject to such tax. No deduction shall 

11 be allowed under this title for any liability imposed 

12 by the preceding sentence. 

13 ‘‘(4) COORDINATION.—Paragraph (1) shall not 

14 apply to any services which are covered by an agree15 ment under subsection (l). 

16 ‘‘(5) CROSS REFERENCE.—For relief from taxes 

17 in cases covered by certain international agreements, 

18 see sections 3101(c) and 3111(c).’’. 

19 (b) SOCIAL SECURITY BENEFITS.—Subsection (e) of 

20 section 210 of the Social Security Act (42 U.S.C. 410(e)) 

21 is amended— 

22 (1) by striking ‘‘(e) The term’’ and inserting 

23 ‘‘(e)(1) The term’’, 

24 (2) by redesignating clauses (1) through (6) as 

25 clauses (A) through (F), respectively, and 


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

2 paragraph: 

3 ‘‘(2)(A) If any employee of a foreign person is per4 forming services in connection with a contract between the 

5 United States Government (or any instrumentality there6 of) and any member of any domestically controlled group 

7 of entities which includes such foreign person, such foreign 

8 person shall be treated as an American employer with re9 spect to such services performed by such employee. 

10 ‘‘(B) For purposes of this paragraph— 

11 ‘‘(i) The term ‘domestically controlled group of 

12 entities’ means a controlled group of entities the 

13 common parent of which is a domestic corporation. 

14 ‘‘(ii) The term ‘controlled group of entities’ 

15 means a controlled group of corporations as defined 

16 in section 1563(a)(1) of the Internal Revenue Code 

17 of 1986, except that— 

18 ‘‘(I) ‘more than 50 percent’ shall be sub19 stituted for ‘at least 80 percent’ each place it 

20 appears therein, and 

21 ‘‘(II) the determination shall be made 

22 without regard to subsections (a)(4) and (b)(2) 

23 of section 1563 of such Code. 

24 A partnership or any other entity (other than a cor25 poration) shall be treated as a member of a conVerDate Aug 31 2005 23:31 Apr 16, 2008 Jkt 069200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H5719.RFS H5719

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1 trolled group of entities if such entity is controlled 

2 (within the meaning of section 954(d)(3) of such 

3 Code) by members of such group (including any en4 tity treated as a member of such group by reason of 

5 this sentence).’’. 

6 (c) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to services performed after the 

8 date of the enactment of this Act. 

9 SEC. 19. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

10 TAX. 

11 The percentage under subparagraph (C) of section 

12 401(1) of the Tax Increase Prevention and Reconciliation 

13 Act of 2005 in effect on the date of the enactment of this 

14 Act is increased by 0.25 percentage points. 

15 SEC. 20 GAO STUDY ON HEALTH SAVINGS ACCOUNTS. 

16 (a) IN GENERAL.—The Comptroller General of the 

17 United States shall conduct a study of the use of distribu18 tions from health savings accounts. 

19 (b) SUBMISSION OF REPORT.—Not later than 1 year 

20 after the date of the enactment of this Act, the Comp21 troller General shall submit a report on the findings of 

22 the study conducted under subsection (a) and shall include 

23 therein recommendations (if any) relating to such find24 ings. The report shall be submitted to the Committee on 


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HR 5719 RFS 

1 Ways and Means of the House of Representatives and the 

2 Committee on Finance of the Senate. 

Passed the House of Representatives April 15, 2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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