I 

108TH CONGRESS 

2D SESSION H. R. 4840

To amend the Internal Revenue Code of 1986 to simplify the taxation of 

businesses. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 15, 2004

Mr. CRANE (for himself, Mr. BOEHNER, Mr. DOOLITTLE, Mr. SHAW, Mr. 

CANTOR, Mr. ROGERS of Michigan, Mr. AKIN, Mr. HERGER, Mr. WILSON

of South Carolina, Mrs. BIGGERT, and Mr. ENGLISH) 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 simplify 

the taxation of businesses.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax Simplification for 

5 America’s Job Creators Act of 2004’’. 

6 SEC. 2. 2-YEAR EXTENSION OF INCREASED EXPENSING FOR 

7 SMALL BUSINESS. 

8 Subsections (b), (c), and (d) of section 179 of the 

9 Internal Revenue Code of 1986 are each amended by 
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1 striking ‘‘2006’’ each place it appears and inserting 

2 ‘‘2008’’. 

3 SEC. 3. INDEXING OF GROSS RECEIPTS TEST FOR CASH 

4 METHOD OF ACCOUNTING. 

5 (a) IN GENERAL.—Section 448(c) of the Internal 

6 Revenue Code of 1986 is amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(4) INFLATION ADJUSTMENT OF GROSS RE9 CEIPTS TEST.—In the case of any taxable year be10 ginning in a calendar year after 2003, the 

11 $5,000,000 dollar amount in paragraph (1) shall be 

12 increased by an amount equal to—

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

14 ‘‘(B) the cost-of-living adjustment deter15 mined under section 1(f)(3) for such calendar 

16 year by substituting ‘calendar year 2002’ for 

17 ‘calendar year 1992’ in subparagraph (B) 

18 thereof. 

19 If any amount as adjusted under the preceding sentence 

20 is not a multiple of $100,000, such amount shall be round21 ed to the nearest multiple of $100,000.’’. 

22 (b) CONFORMING AMENDMENTS.—

23 (1) Section 448(b)(3) of such Code is amended 

24 by striking ‘‘$5,000,000’’ both places it appears in 

25 the heading and text. 
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1 (2) Section 448(c) of such Code is amended by 

2 striking ‘‘$5,000,000’’ in the heading and the first 

3 place it appears in paragraph (1) thereof. 

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

5 this section shall apply to taxable years beginning after 

6 December 31, 2003.

7 SEC. 4. SIMPLIFICATION THROUGH ELIMINATION OF INOP8 ERATIVE PROVISIONS. 

9 (a) IN GENERAL.—

10 (1) GENERAL BUSINESS CREDITS.—Subsection 

11 (d) of section 38 of the Internal Revenue Code of 

12 1986 is amended by striking paragraph (3). 

13 (2) CARRYBACK AND CARRYFORWARD OF UN14 USED CREDITS.—Subsection (d) of section 39 of 

15 such Code is amended by striking paragraphs (1) 

16 through (8) and by redesignating paragraphs (9) 

17 and (10) as paragraphs (1) and (2), respectively. 

18 (3) ADJUSTMENTS BASED ON ADJUSTED CUR19 RENT EARNINGS.—Clause (ii) of section 56(g)(4)(F) 

20 of such Code is amended by striking ‘‘In the case of 

21 any taxable year beginning after December 31, 

22 1992, clause’’ and inserting ‘‘Clause’’. 

23 (4) ITEMS OF TAX PREFERENCE; DEPLETION.—

24 Paragraph (1) of section 57(a) of such Code is 

25 amended by striking ‘‘Effective with respect to tax-
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1 able years beginning after December 31, 1992, this’’ 

2 and inserting ‘‘This’’. 

3 (5) INTANGIBLE DRILLING COSTS.—

4 (A) Clause (i) of section 57(a)(2)(E) of 

5 such Code is amended by striking ‘‘In the case 

6 of any taxable year beginning after December 

7 31, 1992, this’’ and inserting ‘‘This’’. 

8 (B) Clause (ii) of section 57(a)(2)(E) of 

9 such Code is amended by striking ‘‘(30 percent 

10 in the case of taxable years beginning in 

11 1993)’’. 

12 (6) GREAT PLAINS CONSERVATION PROGRAM.—

13 Section 126(a) of such Code is amended by striking 

14 paragraph (6) and by redesignating paragraphs (7), 

15 (8), (9), and (10) as paragraphs (6), (7), (8), and 

16 (9), respectively. 

17 (7) TREBLE DAMAGE PAYMENTS UNDER THE

18 ANTITRUST LAW.—Section 162(g) of such Code is 

19 amended by striking the last sentence. 

20 (8) CHARITABLE, ETC., CONTRIBUTIONS AND

21 GIFTS.—Section 170 of such Code is amended by 

22 striking subsection (k). 

23 (9) NET OPERATING LOSS CARRYBACKS AND

24 CARRYOVERS.—
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1 (A) Section 172 of such Code is amend2 ed—

3 (i) by striking subparagraph (D) of 

4 subsection (b)(1) and by redesignating 

5 subparagraphs (E), (F), (G), and (H) as 

6 subparagraphs (D), (E), (F), and (G), re7 spectively, 

8 (ii) by striking ‘‘ending after August 

9 2, 1989’’ in subsection (b)(1)(D)(i)(II) (as 

10 redesignated by clause (i)), 

11 (iii) by striking ‘‘subparagraph (F)’’ 

12 in subsection (b)(1)(G) (as redesignated by 

13 clause (i)) and inserting ‘‘subparagraph 

14 (E)’’, 

15 (iv) by striking subsection (g), and 

16 (v) by striking subparagraph (F) of 

17 subsection (h)(2). 

18 (B) Section 172(h)(4) of such Code is 

19 amended by striking ‘‘subsection (b)(1)(E)’’ 

20 each place it appears and inserting ‘‘subsection 

21 (b)(1)(D)’’. 

22 (C) Section 172(i)(3) of such Code is 

23 amended by striking ‘‘subsection (b)(1)(G)’’

24 each place it appears and inserting ‘‘subsection 

25 (b)(1)(F)’’. 
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1 (D) Section 172(j) of such Code is amend2 ed by striking ‘‘subsection (b)(1)(H)’’ each 

3 place it appears and inserting ‘‘subsection 

4 (b)(1)(G)’’. 

5 (E) Section 172 of such Code, as amended 

6 by subparagraphs (A) through (D) of this para7 graph, is amended—

8 (i) by redesignating subsections (h), 

9 (i), and (j) as subsections (g), (h), and (i), 

10 respectively, 

11 (ii) by striking ‘‘subsection (h)’’ each 

12 place it appears and inserting ‘‘subsection 

13 (g)’’, and 

14 (iii) by striking ‘‘subsection (i)’’ each 

15 place it appears and inserting ‘‘subsection 

16 (h)’’. 

17 (10) RESEARCH AND EXPERIMENTAL EXPENDI18 TURES.—Subparagraph (A) of section 174(a)(2) of 

19 such Code is amended to read as follows: 

20 ‘‘(A) WITHOUT CONSENT.—A taxpayer 

21 may, without the consent of the Secretary, 

22 adopt the method provided in this subsection 

23 for his first taxable year for which expenditures 

24 described in paragraph (1) are paid or in25 curred.’’. 
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1 (11) AMORTIZATION OF CERTAIN RESEARCH

2 AND EXPERIMENTAL EXPENDITURES.—Paragraph 

3 (2) of section 174(b) of such Code is amended by 

4 striking ‘‘beginning after December 31, 1953’’. 

5 (12) SOIL AND WATER CONSERVATION EXPEND6 ITURES.—Paragraph (1) of section 175(d) of such 

7 Code is amended to read as follows: 

8 ‘‘(1) WITHOUT CONSENT.—A taxpayer may, 

9 without the consent of the Secretary, adopt the 

10 method provided in this section for the taxpayer’s 

11 first taxable year for which expenditures described in 

12 subsection (a) are paid or incurred.’’. 

13 (13) ACTIVITIES NOT ENGAGED IN FOR PROF14 IT.—Section 183(e)(1) of such Code is amended by 

15 striking the last sentence. 

16 (14) DIVIDENDS RECEIVED ON CERTAIN PRE17 FERRED STOCK; AND DIVIDENDS PAID ON CERTAIN

18 PREFERRED STOCK OF PUBLIC UTILITIES.—

19 (A) Sections 244 and 247 of such Code are 

20 hereby repealed, and the table of sections for 

21 part VIII of subchapter B of chapter 1 of such 

22 Code is amended by striking the items relating 

23 to sections 244 and 247. 

24 (B) Paragraph (5) of section 172(d) of 

25 such Code is amended to read as follows: 
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1 ‘‘(5) COMPUTATION OF DEDUCTION FOR DIVI2 DENDS RECEIVED.—The deductions allowed by sec3 tion 243 (relating to dividends received by corpora4 tions) and 245 (relating to dividends received from 

5 certain foreign corporations) shall be computed with6 out regard to section 246(b) (relating to limitation 

7 on aggregate amount of deductions).’’. 

8 (C) Paragraph (1) of section 243(c) of 

9 such Code is amended to read as follows: 

10 ‘‘(1) IN GENERAL.—In the case of any dividend 

11 received from a 20-percent owned corporation, sub12 section (a)(1) shall be applied by substituting ‘80 

13 percent’ for ‘70 percent’.’’. 

14 (D) Section 243(d) of such Code is amend15 ed by striking paragraph (4). 

16 (E) Section 246 of such Code is amend17 ed—

18 (i) by striking ‘‘, 244,’’ in subsection 

19 (a)(1), 

20 (ii) in subsection (b)(1)—

21 (I) by striking ‘‘sections 

22 243(a)(1), and 244(a),’’ the first 

23 place it appears and inserting ‘‘section 

24 243(a)(1)’’, 
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1 (II) by striking ‘‘244(a),’’ the 

2 second place it appears, and 

3 (III) by striking ‘‘subsection (a) 

4 or (b) of section 245, and 247,’’ and 

5 inserting ‘‘and subsection (a) or (b) of 

6 section 245,’’, and 

7 (iii) by striking ‘‘, 244,’’ in subsection 

8 (c)(1). 

9 (F) Section 246A of such Code is amended 

10 by striking ‘‘, 244,’’ both places it appears in 

11 subsections (a) and (e). 

12 (G) Sections 263(g)(2)(B)(iii), 277(a), 

13 301(e)(2), 469(e)(4), 512(a)(3)(A), subpara14 graphs (A), (C), and (D) of section 805(a)(4), 

15 805(b)(5), 812(e)(2)(A), 815(c)(2)(A)(iii), 

16 832(b)(5), 833(b)(3)(E), and 1059(b)(2)(B) of 

17 such Code are each amended by striking ‘‘, 

18 244,’’ each place it appears. 

19 (H) Section 1244(c)(2)(C) of such Code is 

20 amended by striking ‘‘244,’’. 

21 (I) Section 805(a)(4)(B) of such Code is 

22 amended by striking ‘‘, 244(a),’’ each place it 

23 appears. 
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1 (J) Section 810(c)(2)(B) of such Code is 

2 amended by striking ‘‘244 (relating to dividends 

3 on certain preferred stock of public utilities),’’. 

4 (15) ORGANIZATION EXPENSES.—Section 

5 248(c) of such Code is amended by striking ‘‘begin6 ning after December 31, 1953,’’ and by striking the 

7 last sentence. 

8 (16) AMOUNT OF GAIN WHERE LOSS PRE9 VIOUSLY DISALLOWED.—Section 267(d) of such 

10 Code is amended by striking ‘‘(or by reason of sec11 tion 24(b) of the Internal Revenue Code of 1939)’’ 

12 in paragraph (1), by striking ‘‘after December 31, 

13 1953,’’ in paragraph (2), by striking the second sen14 tence, and by striking ‘‘or by reason of section 118 

15 of the Internal Revenue Code of 1939’’ in the last 

16 sentence. 

17 (17) ACQUISITIONS MADE TO EVADE OR AVOID

18 INCOME TAX.—Paragraphs (1) and (2) of section 

19 269(a) of such Code are each amended by striking 

20 ‘‘or acquired on or after October 8, 1940,’’. 

21 (18) INTEREST ON INDEBTEDNESS INCURRED

22 BY CORPORATIONS TO ACQUIRE STOCK OR ASSETS

23 OF ANOTHER CORPORATION.—Section 279 of such 

24 Code is amended—
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1 (A) by striking ‘‘after December 31, 

2 1967,’’ in subsection (a)(2), 

3 (B) by striking ‘‘after October 9, 1969,’’ in 

4 subsection (b), and 

5 (C) by striking ‘‘after October 9, 1969, 

6 and’’ in subsection (d)(5). 

7 (19) SPECIAL RULES RELATING TO CORPORATE

8 PREFERENCE ITEMS.—Paragraph (4) of section 

9 291(a) of such Code is amended by striking ‘‘In the 

10 case of taxable years beginning after December 31, 

11 1984, section’’ and inserting ‘‘Section’’. 

12 (20) TAX CREDIT EMPLOYEE STOCK OWNER13 SHIP PLANS.—Section 409 of such Code is amended 

14 by striking subsection (q). 

15 (21) FUNDING STANDARDS.—Section 

16 412(m)(4) of such Code is amended—

17 (A) by striking ‘‘the applicable percentage’’ 

18 in subparagraph (A) and inserting ‘‘25 per19 cent’’, and 

20 (B) by striking subparagraph (C) and by 

21 redesignating subparagraph (D) as subpara22 graph (C). 

23 (22) RETIREE HEALTH ACCOUNTS.—Section 

24 420 of such Code is amended—
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1 (A) by striking paragraph (4) of subsection 

2 (b) and by redesignating paragraph (5) as para3 graph (4), and 

4 (B) by amending paragraph (2) of sub5 section (c) to read as follows: 

6 ‘‘(2) REQUIREMENTS RELATING TO PENSION

7 BENEFITS ACCRUING BEFORE TRANSFER.—The re8 quirements of this paragraph are met if the plan 

9 provides that the accrued pension benefits of any 

10 participant or beneficiary under the plan become 

11 nonforfeitable in the same manner which would be 

12 required if the plan had terminated immediately be13 fore the qualified transfer (or in the case of a partic14 ipant who separated during the 1-year period ending 

15 on the date of the transfer, immediately before such 

16 separation).’’. 

17 (23) EMPLOYEE STOCK PURCHASE PLANS.—

18 Section 423(a) of such Code is amended by striking 

19 ‘‘after December 31, 1963,’’. 

20 (24) LIMITATION ON DEDUCTIONS FOR CER21 TAIN FARMING.—

22 (A) Section 464 of such Code is amended 

23 by striking ‘‘any farming syndicate (as defined 

24 in subsection (c))’’ both places it appears in 
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1 subsections (a) and (b) and inserting ‘‘any tax2 payer to whom subsection (d) applies’’. 

3 (B)(i) Subsection (c) of section 464 of 

4 such Code is hereby moved to the end of section 

5 461 and redesignated as subsection (j). 

6 (ii) Such subsection (j) of such Code is 

7 amended—

8 (I) by striking ‘‘For purposes of this 

9 section’’ in paragraph (1) and inserting 

10 ‘‘For purposes of subsection (i)(4)’’, and 

11 (II) by adding at the end the fol12 lowing new paragraphs: 

13 ‘‘(3) FARMING.—For purposes of this sub14 section, the term ‘farming’ has the meaning given to 

15 such term by section 464(e). 

16 ‘‘(4) LIMITED ENTREPRENEUR.—For purposes 

17 of this subsection, the term ‘limited entrepreneur’ 

18 means a person who—

19 ‘‘(A) has an interest in an enterprise other 

20 than as a limited partner, and 

21 ‘‘(B) does not actively participate in the 

22 management of such enterprise.’’

23 (iii) Paragraph (4) of section 461(i) of 

24 such Code is amended by striking ‘‘section 

25 464(c)’’ and inserting ‘‘subsection (j)’’. 
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1 (C) Section 464 of such Code is amend2 ed—

3 (i) by striking subsections (e) and (g) 

4 and redesignating subsections (d) and (f) 

5 as subsections (c) and (d), respectively, 

6 and 

7 (ii) by adding at the end the following 

8 new subsection: 

9 ‘‘(e) FARMING.—For purposes of this section, the 

10 term ‘farming’ means the cultivation of land or the raising 

11 or harvesting of any agricultural or horticultural com12 modity including the raising, shearing, feeding, caring for, 

13 training, and management of animals. For purposes of the 

14 preceding sentence, trees (other than trees bearing fruit 

15 or nuts) shall not be treated as an agricultural or horti16 cultural commodity.’’

17 (D) Subsection (d) of section 464 of such 

18 Code, as redesignated by subparagraph (C), is 

19 amended—

20 (i) by striking paragraph (1) and re21 designating paragraphs (2), (3), and (4) as 

22 paragraphs (1), (2), and (3), respectively, 

23 and 
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1 (ii) by striking ‘‘SUBSECTIONS (a) 

2 AND (b) TO APPLY TO’’ in the subsection 

3 heading. 

4 (E) Subparagraph (A) of section 58(a)(2) 

5 of such Code is amended by striking ‘‘section 

6 464(c)’’ and inserting ‘‘section 461(j)’’. 

7 (25) DEDUCTIONS LIMITED TO AMOUNT AT

8 RISK.—Paragraph (3) of section 465(c) of such 

9 Code is amended by striking ‘‘In the case of taxable 

10 years beginning after December 31, 1978, this’’ and 

11 inserting ‘‘This’’. 

12 (26) NUCLEAR DECOMMISSIONING COSTS.—Sec13 tion 468A(e)(2) of such Code is amended—

14 (A) by striking ‘‘at the rate set forth in 

15 subparagraph (B)’’ in subparagraph (A) and in16 serting ‘‘at the rate of 20 percent’’, and 

17 (B) by striking subparagraph (B) and by 

18 redesignating subparagraphs (C) and (D) as 

19 subparagraphs (B) and (C), respectively. 

20 (27) PASSIVE ACTIVITY LOSSES AND CREDITS

21 LIMITED.—

22 (A) Section 469 of such Code is amended 

23 by striking subsection (m). 

24 (B) Subsection (b) of section 58 of such 

25 Code is amended by adding ‘‘and’’ at the end
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1 of paragraph (1), by striking paragraph (2), 

2 and by redesignating paragraph (3) as para3 graph (2). 

4 (28) ADJUSTMENTS REQUIRED BY CHANGES IN

5 METHOD OF ACCOUNTING.—Section 481(b)(3) of 

6 such Code is amended by striking subparagraph (C). 

7 (29) EXEMPTION FROM TAX ON CORPORATIONS, 

8 CERTAIN TRUSTS, ETC.—Section 501 of such Code 

9 is amended by striking subsection (q). 

10 (30) REQUIREMENTS FOR EXEMPTION.—

11 (A) Section 503(a)(1) of such Code is 

12 amended to read as follows: 

13 ‘‘(1) GENERAL RULE.—An organization de14 scribed in paragraph (17) or (18) of section 501(c) 

15 or described in section 401(a) and referred to in sec16 tion 4975(g)(2) or (3) shall not be exempt from tax17 ation under section 501(a) if it has engaged in a 

18 prohibited transaction.’’. 

19 (B) Paragraph (2) of section 503(a) of 

20 such Code is amended by striking ‘‘described in 

21 section 501(c)(17) or (18) or paragraph 

22 (a)(1)(B)’’ and inserting ‘‘described in para23 graph (1)’’. 

24 (C) Subsection (c) of section 503 of such 

25 Code is amended by striking ‘‘described in sec-
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1 tion 501(c)(17) or (18) or subsection 

2 (a)(1)(B)’’ and inserting ‘‘described in sub3 section (a)(1)’’. 

4 (31) INSURANCE COMPANY TAXABLE INCOME.—

5 (A) Section 832(e) of such Code is amend6 ed by striking ‘‘of taxable years beginning after 

7 December 31, 1966,’’. 

8 (B) Section 832(e)(6) of such Code is 

9 amended by striking ‘‘In the case of any taxable 

10 year beginning after December 31, 1970, the’’ 

11 and inserting ‘‘The’’. 

12 (32) PROPERTY ON WHICH LESSEE HAS MADE

13 IMPROVEMENTS.—Section 1019 of such Code is 

14 amended by striking the last sentence. 

15 (33) INVOLUNTARY CONVERSION.—Section 

16 1033 of such Code is amended by striking sub17 section (j) and by redesignating subsection (k) as 

18 subsection (j). 

19 (34) PROPERTY ACQUIRED DURING AFFILI20 ATION.—Section 1051 of such Code is hereby re21 pealed, and the table of sections for part IV of sub22 chapter O of chapter 1 is amended by striking the 

23 item relating to section 1051. 

24 (35) HOLDING PERIOD OF PROPERTY.—
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1 (A) Paragraph (5) of section 1223 of such 

2 Code is amended by striking ‘‘(or under so 

3 much of section 1052(c) as refers to section 

4 113(a)(23) of the Internal Revenue Code of 

5 1939)’’. 

6 (B) Paragraph (7) of section 1223 of such 

7 Code is amended by striking the last sentence. 

8 (C) Paragraph (9) of section 1223 of such 

9 Code is repealed. 

10 (36) PROPERTY USED IN THE TRADE OR BUSI11 NESS AND INVOLUNTARY CONVERSIONS.—Subpara12 graph (A) of section 1231(c)(2) of such Code is 

13 amended by striking ‘‘beginning after December 31, 

14 1981’’. 

15 (37) SALE OR EXCHANGE OF PATENTS.—Sec16 tion 1235 of such Code is amended—

17 (A) by striking subsection (c) and by re18 designating subsections (d) and (e) as sub19 sections (c) and (d), respectively, and 

20 (B) by striking ‘‘subsection (d)’’ in sub21 section (b) and inserting ‘‘subsection (c)’’. 

22 (38) DEALERS IN SECURITIES.—Subsection (b) 

23 of section 1236 of such Code is amended by striking 

24 ‘‘after November 19, 1951,’’. 
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1 (39) SALE OF PATENTS.—Subsection (a) of sec2 tion 1249 of such Code is amended by striking 

3 ‘‘after December 31, 1962,’’. 

4 (40) GAIN FROM DISPOSITION OF FARM

5 LAND.—Paragraph (1) of section 1252(a) of such 

6 Code is amended by striking ‘‘after December 31, 

7 1969,’’ both places it appears. 

8 (41) TREATMENT OF AMOUNTS RECEIVED ON

9 RETIREMENT OR SALE OR EXCHANGE OF DEBT IN10 STRUMENTS.—Subsection (c) of section 1271 of 

11 such Code is amended to read as follows: 

12 ‘‘(c) SPECIAL RULE FOR CERTAIN OBLIGATIONS

13 WITH RESPECT TO WHICH ORIGINAL ISSUE DISCOUNT

14 NOT CURRENTLY INCLUDIBLE.—

15 ‘‘(1) IN GENERAL.—On the sale or exchange of 

16 debt instruments issued by a government or political 

17 subdivision thereof after December 31, 1954, and 

18 before July 2, 1982, or by a corporation after De19 cember 31, 1954, and on or before May 27, 1969, 

20 any gain realized which does not exceed—

21 ‘‘(A) an amount equal to the original issue 

22 discount, or 

23 ‘‘(B) if at the time of original issue there 

24 was no intention to call the debt instrument be25 fore maturity, an amount which bears the same 
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1 ratio to the original issue discount as the num2 ber of complete months that the debt instru3 ment was held by the taxpayer bears to the 

4 number of complete months from the date of 

5 original issue to the date of maturity, 

6 shall be considered as ordinary income. 

7 ‘‘(2) SUBSECTION (a)(2)(A) NOT TO APPLY.— 

8 Subsection (a)(2)(A) shall not apply to any debt in9 strument referred to in subparagraph (A) of this 

10 paragraph. 

11 ‘‘(3) CROSS REFERENCE.— 

‘‘For current inclusion of original issue discount, 

see section 1272.’’. 

12 (42) AMOUNT AND METHOD OF ADJUST13 MENT.—Section 1314 of such Code is amended by 

14 striking subsection (d) and by redesignating sub15 section (e) as subsection (d). 

16 (43) ELECTION; REVOCATION; TERMINATION.— 

17 Clause (iii) of section 1362(d)(3) of such Code is 

18 amended by striking ‘‘unless’’ and all that follows 

19 and inserting ‘‘unless the corporation was an S cor20 poration for such taxable year.’’. 

21 (44) AFFILIATED GROUP DEFINED.—Subpara22 graph (A) of section 1504(a)(3) of such Code is 

23 amended by striking ‘‘for a taxable year which in24 cludes any period after December 31, 1984’’ in 
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1 clause (i) and by striking ‘‘in a taxable year begin2 ning after December 31, 1984’’ in clause (ii). 

3 (45) DISALLOWANCE OF THE BENEFITS OF

4 THE GRADUATED CORPORATE RATES AND ACCUMU5 LATED EARNINGS CREDIT.—

6 (A) Subsection (a) of section 1551 of such 

7 Code is amended—

8 (i) by striking paragraph (1) and by 

9 redesignating paragraphs (2) and (3) as 

10 paragraphs (1) and (2), respectively, and 

11 (ii) by striking ‘‘after June 12, 1963,’’ 

12 each place it appears. 

13 (B) Section 1551(b) of such Code is 

14 amended—

15 (i) by striking ‘‘or (2)’’ in paragraph 

16 (1), and 

17 (ii) by striking ‘‘(a)(3)’’ in paragraph 

18 (2) and inserting ‘‘(a)(2)’’. 

19 (46) DEFINITION OF WAGES.—

20 (A) Section 3121(b) of such Code is 

21 amended by striking paragraph (17). 

22 (B) Section 210(a) of the Social Security 

23 Act is amended by striking paragraph (17). 

24 (47) CREDITS AGAINST TAX.—
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1 (A) Paragraph (4) of section 3302(f) of 

2 such Code is amended—

3 (i) by striking ‘‘subsection—’’ and all 

4 that follows through ‘‘(A) IN GENERAL.—

5 The’’ and inserting ‘‘subsection, the, 

6 (ii) by striking subparagraph (B), 

7 (iii) by redesignating clauses (i) and 

8 (ii) as subparagraphs (A) and (B), respec9 tively, and 

10 (iv) by moving the text of such sub11 paragraphs (as so redesignated) 2 ems to 

12 the left. 

13 (B) Paragraph (5) of section 3302(f) of 

14 such Code is amended by striking subparagraph 

15 (D) and by redesignating subparagraph (E) as 

16 subparagraph (D). 

17 (48) DOMESTIC SERVICE EMPLOYMENT

18 TAXES.—Section 3510(b) of such Code is amended 

19 by striking paragraph (4). 

20 (49) TAX ON FUEL USED IN COMMERCIAL

21 TRANSPORTATION ON INLAND WATERWAYS.—Section 

22 4042(b)(2)(A) of such Code is amended to read as 

23 follows: 

24 ‘‘(A) The Inland Waterways Trust Fund 

25 financing rate is 20 cents per gallon.’’. 
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1 (50) TRANSPORTATION BY AIR.—Section 

2 4261(e) of such Code is amended—

3 (A) in paragraph (1) by striking subpara4 graph (C), and 

5 (B) by striking paragraph (5). 

6 (51) TAXES ON FAILURE TO DISTRIBUTE IN7 COME.—

8 (A) Paragraph (2) of section 4942(f) of 

9 such Code is amended by striking the semicolon 

10 at the end of subparagraph (B) and inserting ‘‘, 

11 and’’, by striking ‘‘; and’’ at the end of sub12 paragraph (C) and inserting a period, and by 

13 striking subparagraph (D). 

14 (B) Subsection (g) of section 4942 of such 

15 Code is amended—

16 (i) by striking ‘‘For all taxable years 

17 beginning on or after January 1, 1975, 

18 subject’’ in paragraph (2)(A) and inserting 

19 ‘‘Subject’’, and 

20 (ii) by striking paragraph (4). 

21 (C) Section 4942(i)(2) of such Code is 

22 amended by striking ‘‘beginning after December 

23 31, 1969, and’’. 

24 (52) TAXES ON TAXABLE EXPENDITURES.—

25 Section 4945(f) of such Code is amended by striking 
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1 ‘‘(excluding therefrom any preceding taxable year 

2 which begins before January 1, 1970)’’. 

3 (53) RETURNS.—Subsection (a) of section 

4 6039D of such Code is amended by striking ‘‘begin5 ning after December 31, 1984,’’. 

6 (54) INFORMATION RETURNS.—Subsection (c) 

7 of section 6060 of such Code is amended by striking 

8 ‘‘year’’ and all that follows and inserting ‘‘year.’’. 

9 (55) CANAL ZONE.—Subparagraph (A) of sec10 tion 6103(b)(5) of such Code is amended by striking 

11 ‘‘the Canal Zone,’’. 

12 (56) ABATEMENTS.—Section 6404(f) of such 

13 Code is amended by striking paragraph (3). 

14 (57) FAILURE BY CORPORATION TO PAY ESTI15 MATED INCOME TAX.—Clause (i) of section 

16 6655(g)(4)(A) of such Code is amended by striking 

17 ‘‘(or the corresponding provisions of prior law)’’. 

18 (58) MERCHANT MARINE CAPITAL CONSTRUC19 TION FUNDS.—Paragraph (4) of section 7518(g) of 

20 such Code is amended by striking ‘‘any nonqualified 

21 withdrawal’’ and all that follows through ‘‘shall be 

22 determined’’ and inserting ‘‘any nonqualified with23 drawal shall be determined’’. 

24 (59) VALUATION TABLES.—
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1 (A) Subsection (c) of section 7520 of such 

2 Code is amended by striking paragraph (2) and 

3 by redesignating paragraph (3) as paragraph 

4 (2). 

5 (B) Paragraph (2) of section 7520(c) of 

6 such Code, as so redesignated, is amended—

7 (i) by striking ‘‘Not later than Decem8 ber 31, 1989, the’’ and inserting ‘‘The’’, 

9 and 

10 (ii) by striking ‘‘thereafter’’ in the last 

11 sentence thereof. 

12 (60) ADMINISTRATION AND COLLECTION OF

13 TAXES IN POSSESSIONS.—Section 7651 of such Code 

14 is amended by striking paragraph (4) and by redes15 ignating paragraph (5) as paragraph (4). 

16 (61) DEFINITION OF EMPLOYEE.—Section 

17 7701(a)(20) of such Code is amended by striking 

18 ‘‘chapter 21’’ and all that follows and inserting 

19 ‘‘chapter 21.’’. 

20 (b) EFFECTIVE DATE.—

21 (1) GENERAL RULE.—Except as otherwise pro22 vided in paragraph (2), the amendments made by 

23 subsection (a) shall take effect on the date of enact24 ment of this Act. 

25 (2) SAVINGS PROVISION.—If—
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1 (A) any provision amended or repealed by 

2 subsection (a) applied to—

3 (i) any transaction occurring before 

4 the date of the enactment of this Act, 

5 (ii) any property acquired before such 

6 date of enactment, or 

7 (iii) any item of income, loss, deduc8 tion, or credit taken into account before 

9 such date of enactment, and 

10 (B) the treatment of such transaction, 

11 property, or item under such provision would 

12 (without regard to the amendments made by 

13 subsection (a)) affect the liability for tax for pe14 riods ending after such date of enactment, 

15 nothing in the amendments made by subsection (a) 

16 shall be construed to affect the treatment of such 

17 transaction, property, or item for purposes of deter18 mining liability for tax for periods ending after such 

19 date of enactment.

Æ