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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4256 Introduced in House (IH)]

104th CONGRESS
  2d Session
                                H. R. 4256

To amend the Internal Revenue Code of 1986 to provide for the abatement 
 of interest on deficiencies attributable to certain partnership items.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 1996

 Mr. Laughlin 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 for the abatement 
 of interest on deficiencies attributable to certain partnership items.

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

SECTION 1. ABATEMENT OF INTEREST ON DEFICIENCIES ATTRIBUTABLE TO 
              CERTAIN PARTNERSHIP ITEMS.

    (a) In General.--Section 6404 of the Internal Revenue Code of 1986 
is amended by redesignating subsections (f) and (g) as subsections (g) 
and (h), respectively, and by inserting after subsection (e) the 
following new subsection:
    ``(f) Abatement of Interest Attributable to Certain Partnership 
Items.--
            ``(1) In general.--In the case of any assessment of 
        interest on any deficiency in income tax attributable to a 
        partnership item, the Secretary shall abate such portion, if 
        any, of such interest which constitutes suspended partnership 
        item interest.
            ``(2) Suspended partnership item interest.--For purposes of 
        this subsection, the term `suspended partnership item interest' 
        means interest accruing for the period during which a judicial 
        proceeding is pending pursuant to section 6226 with respect to 
        the deficiency referred to in paragraph (1), but only to the 
        extent that, during the pendency of such proceeding, a non-
        indictable criminal investigation is also pending.
            ``(3) Non-indictable criminal investigation.--For purposes 
        of this subsection, the term `non-indictable criminal 
        investigation' means an investigation by the Internal Revenue 
        Service, the Department of Justice, or a grand jury, of any 
        potential criminal violation of United States tax laws 
        involving matters related to the partnership which is the 
        subject of the judicial proceeding referred to in paragraph 
        (2), if such investigation does not result in the indictment of 
        any partner in such partnership.
            ``(4) Pendency of non-indictable criminal investigation.--
        For purposes of this subsection, a non-indictable criminal 
        investigation shall be deemed pending--
                    ``(A) from the date of the Internal Revenue Service 
                or the Department of Justice authorizes such 
                investigation,
                    ``(B) to the last date on which each person under 
                investigation either has been indicted or has been 
                notified in writing that such investigation of him or 
                her has terminated.
            ``(5) Converted partnership items.--A partnership item 
        subsequently converted to or otherwise treated as a 
        nonpartnership item shall nonetheless be deemed a partnership 
        item for purposes of paragraph (1).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to interest on deficiencies in income tax attributable to--
            (1) partnership items, and
            (2) partnership items subsequently converted to or 
        otherwise treated as nonpartnership items,
with respect to a partnership which is the subject of a judicial 
proceeding under section 6226 of the Internal Revenue Code of 1986 
pending on or commencing after the date of the enactment of this Act.
                                 <all>
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