I 

111TH CONGRESS 

2D SESSION H. R. 5486 

To amend the Internal Revenue Code of 1986 to provide tax incentives 

for small business job creation, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 9, 2010 

Mr. LEVIN introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax incentives for small business job creation, and for 

other purposes. 

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

3 TITLE V—TAX PROVISIONS 

4 SEC. 500. SHORT TITLE; ETC. 

5 (a) SHORT TITLE.—This title may be cited as the 

6 ‘‘Small Business Jobs Tax Relief Act of 2010’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this title an amend9 ment or repeal is expressed in terms of an amendment 

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


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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

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

4 this title is as follows: 

Sec. 500. Short title; etc. 

Subtitle A—Small Business Tax Incentives 

PART 1—GENERAL PROVISIONS

Sec. 501. Temporary exclusion of 100 percent of gain on certain small business 

stock. 

PART 2—LIMITATIONS AND REPORTING ON CERTAIN PENALTIES

Sec. 511. Limitation on penalty for failure to disclose certain information. 

Sec. 512. Annual reports on penalties and certain other enforcement actions. 

PART 3—OTHER PROVISIONS

Sec. 521. Increase in amount allowed as deduction for start-up expenditures. 

Sec. 522. Nonrecourse small business investment company loans from the Small 

Business Administration treated as amounts at risk. 

Sec. 523. Benefits under the Small Business Borrower Assistance Program excluded from gross income. 

Subtitle B—Revenue Provisions 

Sec. 531. Required minimum 10-year term, etc., for grantor retained annuity 

trusts. 

Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer credit. 

Sec. 533. Time for payment of corporate estimated taxes. 

5 Subtitle A—Small Business Tax 

6 Incentives 

7 PART 1—GENERAL PROVISIONS 

8 SEC. 501. TEMPORARY EXCLUSION OF 100 PERCENT OF 

9 GAIN ON CERTAIN SMALL BUSINESS STOCK. 

10 (a) IN GENERAL.—Subsection (a) of section 1202 is 

11 amended by adding at the end the following new para12 graph: 


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1 ‘‘(4) SPECIAL 100 PERCENT EXCLUSION.—In 

2 the case of qualified small business stock acquired 

3 after March 15, 2010, and before January 1, 

4 2012— 

5 ‘‘(A) paragraph (1) shall be applied by 

6 substituting ‘100 percent’ for ‘50 percent’, 

7 ‘‘(B) paragraph (2) shall not apply, and 

8 ‘‘(C) paragraph (7) of section 57(a) shall 

9 not apply.’’. 

10 (b) CONFORMING AMENDMENTS.—Paragraph (3) of 

11 section 1202(a) is amended— 

12 (1) by striking ‘‘after the date of the enactment 

13 of this paragraph and before January 1, 2011’’ and 

14 inserting ‘‘after February 17, 2009, and before 

15 March 16, 2010’’; and 

16 (2) by striking ‘‘SPECIAL RULES FOR 2009 AND

17 2010’’ in the heading and inserting ‘‘SPECIAL 75

18 PERCENT EXCLUSION’’. 

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

20 this section shall apply to stock acquired after March 15, 

21 2010. 


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1 PART 2—LIMITATIONS AND REPORTING ON 

2 CERTAIN PENALTIES 

3 SEC. 511. LIMITATION ON PENALTY FOR FAILURE TO DIS4 CLOSE CERTAIN INFORMATION. 

5 (a) IN GENERAL.—Subsection (b) of section 6707A 

6 is amended to read as follows: 

7 ‘‘(b) AMOUNT OF PENALTY.— 

8 ‘‘(1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the amount of the penalty 

10 under subsection (a) with respect to any reportable 

11 transaction shall be 75 percent of the decrease in 

12 tax shown on the return as a result of such trans13 action (or which would have resulted from such 

14 transaction if such transaction were respected for 

15 Federal tax purposes). 

16 ‘‘(2) MAXIMUM PENALTY.—The amount of the 

17 penalty under subsection (a) with respect to any re18 portable transaction for any taxable year shall not 

19 exceed— 

20 ‘‘(A) in the case of a listed transaction, 

21 $200,000 ($100,000 in the case of a natural 

22 person), or 

23 ‘‘(B) in the case of any other reportable 

24 transaction, $50,000 ($10,000 in the case of a 

25 natural person). 


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1 ‘‘(3) MINIMUM PENALTY.—The amount of the 

2 penalty under subsection (a) with respect to any 

3 transaction for any taxable year shall not be less 

4 than $10,000 ($5,000 in the case of a natural per5 son).’’. 

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

7 this section shall apply to penalties assessed after Decem8 ber 31, 2006. 

9 SEC. 512. ANNUAL REPORTS ON PENALTIES AND CERTAIN 

10 OTHER ENFORCEMENT ACTIONS. 

11 (a) IN GENERAL.—The Commissioner of Internal 

12 Revenue, in consultation with the Secretary of the Treas13 ury, shall submit to the Committee on Ways and Means 

14 of the House of Representatives and the Committee on 

15 Finance of the Senate an annual report on the penalties 

16 assessed by the Internal Revenue Service during the pre17 ceding year under each of the following provisions of the 

18 Internal Revenue Code of 1986: 

19 (1) Section 6662A (relating to accuracy-related 

20 penalty on understatements with respect to report21 able transactions). 

22 (2) Section 6700(a) (relating to promoting abu23 sive tax shelters). 

24 (3) Section 6707 (relating to failure to furnish 

25 information regarding reportable transactions). 


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1 (4) Section 6707A (relating to failure to include 

2 reportable transaction information with return). 

3 (5) Section 6708 (relating to failure to main4 tain lists of advisees with respect to reportable 

5 transactions). 

6 (b) ADDITIONAL INFORMATION.—The report re7 quired under subsection (a) shall also include information 

8 on the following with respect to each year: 

9 (1) Any action taken under section 330(b) of 

10 title 31, United States Code, with respect to any re11 portable transaction (as defined in section 6707A(c) 

12 of the Internal Revenue Code of 1986). 

13 (2) Any extension of the time for assessment of 

14 tax enforced, or assessment of any amount under 

15 such an extension, under paragraph (10) of section 

16 6501(c) of the Internal Revenue Code of 1986. 

17 (c) DATE OF REPORT.—The first report required 

18 under subsection (a) shall be submitted not later than De19 cember 31, 2010. 

20 PART 3—OTHER PROVISIONS 

21 SEC. 521. INCREASE IN AMOUNT ALLOWED AS DEDUCTION 

22 FOR START-UP EXPENDITURES. 

23 (a) IN GENERAL.—Subsection (b) of section 195 is 

24 amended by adding at the end the following new para25 graph: 


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1 ‘‘(3) INCREASED LIMITATION FOR TAXABLE

2 YEARS BEGINNING IN 2010 OR 2011.—In the case of 

3 any taxable year beginning in 2010 or 2011, para4 graph (1)(A)(ii) shall be applied— 

5 ‘‘(A) by substituting ‘$20,000’ for 

6 ‘$5,000’, and 

7 ‘‘(B) by substituting ‘$75,000’ for 

8 ‘$50,000’.’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2009. 

12 SEC. 522. NONRECOURSE SMALL BUSINESS INVESTMENT 

13 COMPANY LOANS FROM THE SMALL BUSI14 NESS ADMINISTRATION TREATED AS 

15 AMOUNTS AT RISK. 

16 (a) IN GENERAL.—Subparagraph (B) of section 

17 465(b)(6) is amended to read as follows: 

18 ‘‘(B) QUALIFIED NONRECOURSE FINANC19 ING.—For purposes of this paragraph— 

20 ‘‘(i) IN GENERAL.—The term ‘quali21 fied nonrecourse financing’ means any fi22 nancing— 

23 ‘‘(I) which is qualified real prop24 erty financing or qualified SBIC fi25 nancing, 


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1 ‘‘(II) except to the extent pro2 vided in regulations, with respect to 

3 which no person is personally liable 

4 for repayment, and 

5 ‘‘(III) which is not convertible 

6 debt. 

7 ‘‘(ii) QUALIFIED REAL PROPERTY FI8 NANCING.—The term ‘qualified real prop9 erty financing’ means any financing 

10 which— 

11 ‘‘(I) is borrowed by the taxpayer 

12 with respect to the activity of holding 

13 real property, 

14 ‘‘(II) is secured by real property 

15 used in such activity, and 

16 ‘‘(III) is borrowed by the tax17 payer from a qualified person or rep18 resents a loan from any Federal, 

19 State, or local government or instru20 mentality thereof, or is guaranteed by 

21 any Federal, State, or local govern22 ment. 

23 ‘‘(iii) QUALIFIED SBIC FINANCING.— 

24 The term ‘qualified SBIC financing’ means 

25 any financing which— 


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1 ‘‘(I) is borrowed by a small busi2 ness investment company (within the 

3 meaning of section 301 of the Small 

4 Business Investment Act of 1958), 

5 and 

6 ‘‘(II) is borrowed from, or guar7 anteed by, the Small Business Admin8 istration under the authority of sec9 tion 303(b) of such Act.’’. 

10 (b) CONFORMING AMENDMENTS.—Subparagraph (A) 

11 of section 465(b)(6) is amended— 

12 (1) by striking ‘‘in the case of an activity of 

13 holding real property,’’; and 

14 (2) by striking ‘‘which is secured by real prop15 erty used in such activity’’. 

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

17 this section shall apply to loans and guarantees made after 

18 the date of the enactment of this Act. 

19 SEC. 523. BENEFITS UNDER THE SMALL BUSINESS BOR20 ROWER ASSISTANCE PROGRAM EXCLUDED 

21 FROM GROSS INCOME. 

22 (a) IN GENERAL.—Part III of subchapter B of chap23 ter 1 is amended by adding at the end the following new 

24 section: 


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1 ‘‘SEC. 139F. BENEFITS UNDER THE SMALL BUSINESS BOR2 ROWER ASSISTANCE PROGRAM. 

3 ‘‘(a) IN GENERAL.—Gross income shall not include 

4 any amount paid on behalf of a borrower by the Adminis5 trator of the Small Business Administration under the 

6 Small Business Borrower Assistance program established 

7 under section 402 of the Small Business Assistance Fund 

8 Act of 2010 (as in effect immediately after the date of 

9 the enactment of such Act). 

10 ‘‘(b) DENIAL OF DOUBLE BENEFIT.—Notwith11 standing any other provision of this subtitle, with respect 

12 to the person for whose benefit a payment described in 

13 subsection (a) is made— 

14 ‘‘(1) INTEREST.—No deduction shall be allowed 

15 for interest to the extent the liability for such inter16 est is covered by such payment. 

17 ‘‘(2) PAYMENTS OF PRINCIPAL.—If any pay18 ment is applied to reduce the principal of the loan 

19 to which such payment relates— 

20 ‘‘(A) ALLOCATION AMONG FINANCED EX21 PENDITURES.—Such payment shall be allocated 

22 pro rata among the expenditures financed with 

23 such loan. 

24 ‘‘(B) CREDITS AND DEDUCTIBLE EX25 PENSES.—No deduction or credit shall be al26 lowed for, or by reason of, any such expenditure 


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1 to the extent of the amount of the payment al2 located to such expenditure under subparagraph 

3 (A). 

4 ‘‘(C) ADJUSTMENT OF BASIS.—The ad5 justed basis of any property acquired with such 

6 expenditure shall be reduced to the extent of 

7 the amount of the payment allocated to such 

8 expenditure under subparagraph (A).’’. 

9 (b) CLERICAL AMENDMENTS.—The table of sections 

10 for part III of subchapter B of chapter 1 is amended by 

11 adding at the end the following new item: 

‘‘Sec. 139F. Benefits under the Small Business Borrower Assistance Program.’’. 

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

13 this section shall apply to payments made after the date 

14 of the enactment of this Act. 

15 Subtitle B—Revenue Provisions 

16 SEC. 531. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 

17 GRANTOR RETAINED ANNUITY TRUSTS. 

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

19 amended— 

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

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

22 and by moving such subparagraphs (as so redesig23 nated) 2 ems to the right; 


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

2 the following: 

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

4 (3) by striking ‘‘paragraph (1) or (2)’’ in para5 graph (1)(C) (as so redesignated) and inserting 

6 ‘‘subparagraph (A) or (B)’’; and 

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

8 paragraph: 

9 ‘‘(2) ADDITIONAL REQUIREMENTS WITH RE10 SPECT TO GRANTOR RETAINED ANNUITIES.—For 

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

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

13 regard to this paragraph) which is retained by the 

14 transferor, such interest shall be treated as de15 scribed in such paragraph only if— 

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

17 referred to in such paragraph is for a term of 

18 not less than 10 years, 

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

20 on an annual basis, do not decrease relative to 

21 any prior year during the first 10 years of the 

22 term referred to in subparagraph (A), and 

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

24 greater than zero determined as of the time of 

25 the transfer.’’. 


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

2 this section shall apply to transfers made after the date 

3 of the enactment of this Act. 

4 SEC. 532. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC 

5 BIOFUEL PRODUCER CREDIT. 

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

7 is amended— 

8 (1) by striking ‘‘or’’ at the end of subclause (I), 

9 (2) by striking the period at the end of sub10 clause (II) and inserting ‘‘, or’’, 

11 (3) by adding at the end the following new sub12 clause: 

13 ‘‘(III) such fuel has an acid num14 ber greater than 25.’’, and 

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

16 and inserting ‘‘CERTAIN’’. 

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

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

19 January 1, 2010. 

20 SEC. 533. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

21 TAXES. 

22 The percentage under paragraph (2) of section 561 

23 of the Hiring Incentives to Restore Employment Act in 


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1 effect on the date of the enactment of this Act is increased 

2 by 7.75 percentage points. 

Æ 


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