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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 252 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 226
114th CONGRESS
  1st Session
S. RES. 252

      Expressing the sense of the Committee on Small Business and 
Entrepreneurship of the Senate relating to easing the burden of Federal 
                  tax compliance on small businesses.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 15, 2015

 Mr. Vitter, from the Committee on Small Business and Entrepreneurship 
 of the Senate, reported the following original resolution; which was 
                         placed on the calendar

_______________________________________________________________________

                               RESOLUTION

 
      Expressing the sense of the Committee on Small Business and 
Entrepreneurship of the Senate relating to easing the burden of Federal 
                  tax compliance on small businesses.

Whereas American small businesses face major obstacles complying with their 
        Federal tax obligations;
Whereas the complexity of the Federal tax code unfairly penalizes small 
        businesses;
Whereas such complexity requires small business owners to spend significant 
        amounts of time, money, and resources complying with their tax 
        obligations and less time operating their business;
Whereas Congress has exacerbated these challenges for America's small businesses 
        by failing to update the tax code in a manner that properly reflects 
        current circumstances;
Whereas tax policy should also promote increased savings by American citizens to 
        be able to afford the costs of living deeper into old age;
Whereas employee stock ownership plans help small businesses offer economic 
        incentives to employees and help employees save more for their 
        retirements via investments in their employing companies;
Whereas tax policy should support small businesses in providing benefit packages 
        to their employees to be competitive with larger employers for the best 
        talent;
Whereas the successful research and development tax credit has been used to 
        incentivize private firms to invest in research and development, and 
        private investment leads to spillover effects that can have a broad 
        public good through the creation of new products, the development of new 
        processes, and the launching of new industries;
Whereas while the research and development tax credit is essential for our 
        innovators, it is not accessible to many small businesses and startups--
        per the Government Accountability Office, over half of the credit goes 
        to firms with $1,000,000,000 or more in receipts;
Whereas, according to the Congressional Research Service, numerous commercially 
        successful innovations originated in small, fledgling firms that could 
        not access the research and development credit;
Whereas, if Congress made the research and development tax credit more available 
        to small businesses and startups, thousands of innovative small firms 
        could claim the credit, boosting their capacity to invest in innovation 
        and job creation; and
Whereas prudent changes to the structure of the Federal tax code would ease the 
        burden of tax compliance, allowing small businesses to put more money 
        back into their business, community, and the economy: Now, therefore, be 
        it
    Resolved, That it is the sense of the Committee on Small Business 
and Entrepreneurship that the Senate should enact the following:

                   TITLE I--SMALL BUSINESS TAX REFORM

SEC. 101. EXPANSION OF CASH ACCOUNTING THRESHOLD.

    (a) In General.--
            (1) In general.--Paragraph (3) of section 448(b) of the 
        Internal Revenue Code of 1986 is amended by striking 
        ``$5,000,000'' in the text and in the heading and inserting 
        ``$25,000,000''.
            (2) Conforming amendments.--Section 448(c) of such Code is 
        amended--
                    (A) by striking ``$5,000,000'' each place it 
                appears in the text and in the heading of paragraph (1) 
                and inserting ``$25,000,000'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2015, the dollar amount 
        contained in subsection (b)(3) and paragraph (1) of this 
        subsection shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                2014' for `calendar year 1992' in subparagraph (B) 
                thereof.
        If any amount as adjusted under this subparagraph is not a 
        multiple of $100,000, such amount shall be rounded to the 
        nearest multiple of $100,000.''.
    (b) Exemption From Inventory Requirement.--Section 471 of the 
Internal Revenue Code of 1986 is amended by redesignating subsection 
(c) as subsection (d) and by inserting after subsection (b) the 
following new subsection:
    ``(c) Section Not to Apply to Certain Cash Method Taxpayers.--If a 
taxpayer--
            ``(1) would otherwise be required to use inventories under 
        this section for any taxable year, but
            ``(2) the taxpayer meets the gross receipts test of section 
        448(b) for the taxable year and is eligible and elects to use 
        the cash receipts and disbursements method of accounting for 
        the taxable year,
then the requirement to use inventories shall not apply to the taxpayer 
for the taxable year.''.
    (c) Effective Date and Special Rule.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2014.
            (2) Change in method of accounting.--In the case of any 
        taxpayer changing the taxpayer's method of accounting for any 
        taxable year under the amendments made by this section--
                    (A) such change shall be treated as initiated by 
                the taxpayer; and
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury.

SEC. 102. MODIFICATION OF SAFE HARBOR FOR EXPENSING OF ACQUISITION OR 
              PRODUCTION COSTS OF TANGIBLE PROPERTY.

    (a) Requirement to Modify Safe Harbor.--The Secretary of the 
Treasury or his delegate shall, within 180 days after the date of 
enactment of this Act, modify Treasury Regulations section 1.263(a)-
1(f) by--
            (1) increasing the amount of the de minimis safe harbor for 
        taxpayers without applicable financial statements from $500 to 
        $2,500,
            (2) requiring adequate records showing the dollar amount 
        being expensed in lieu of accounting procedures in place at the 
        beginning of the taxable year, and
            (3) modifying the definition of applicable financial 
        statement to include reviewed financial statements.
    (b) Effective Date.--The modifications required by subsection (a) 
shall apply to taxable years beginning after December 31, 2014.

SEC. 103. REMOVAL OF COMPUTER EQUIPMENT FROM LISTED PROPERTY.

    (a) In General.--Section 280F(d)(4)(A) of the Internal Revenue Code 
of 1986 is amended by inserting ``and'' at the end of clause (iii) and 
by striking clause (iv).
    (b) Conforming Amendment.--Section 280F(d)(4) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (B) and by 
redesignating subparagraph (C) as subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 104. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING SELF-
              EMPLOYMENT TAXES.

    (a) In General.--Paragraph (4) of section 162(l) of the Internal 
Revenue Code of 1986 is amended by striking ``for taxable years 
beginning before January 1, 2010, or after December 31, 2010'' and 
inserting ``for taxable years beginning before January 1, 2015.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2014.

SEC. 105. MODIFICATION OF RULES RELATING TO THE TERMINATION OF 
              PARTNERSHIPS AND S CORPORATIONS.

    (a) No Termination of Partnership on Sale or Exchange of Assets.--
            (1) In general.--Section 708(b)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``only if'' and all that 
        follows and inserting ``only if no part of any business, 
        financial operation, or venture of the partnership continues to 
        be carried on by any of its partners in a partnership.''.
            (2) Conforming amendments.--
                    (A) Section 168(i)(7)(B) of such Code is amended by 
                striking the last sentence.
                    (B) Section 743(e) of such Code is amended by 
                striking paragraph (4).
                    (C) Section 774 of such Code is amended by striking 
                subsection (c).
    (b) No Termination of S Corporation Status Due to Excessive Passive 
Investment Income.--Paragraph (3) of section 1362(d) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(D) Termination.--This paragraph shall not apply 
                to taxable years ending after the date of the enactment 
                of this subparagraph.''.

      TITLE II--PROVISIONS RELATED TO THE INTERNAL REVENUE SERVICE

SEC. 201. INFLATION ADJUSTMENTS FOR CERTAIN PROVISIONS.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7529. INFLATION ADJUSTMENTS.

    ``(a) In General.--In the case of any taxable year beginning in a 
calendar year after 2015, each of the specified dollar amounts shall be 
increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2014' for 
        `calendar year 1992' in subparagraph (B) thereof.
    ``(b) Specified Dollar Amounts.--For purposes of subsection (a), 
the specified dollar amounts are--
            ``(1) the $50,000 amount in section 79(a)(1),
            ``(2) each of the $5,250 amounts in section 127(a)(2),
            ``(3) each of the $500 amounts in paragraphs (11)(A), 
        (11)(B), and (12) of section 170(f),
            ``(4) the $5,000 amount in section 170(f)(11)(C),
            ``(5) the $10,000,000 amount in section 263A(b)(2),
            ``(6) each of the dollar amounts in section 274(b)(1),
            ``(7) each of the $400 amounts in section 274(j),
            ``(8) the $1,600 amount in section 274(j)(2)(B),
            ``(9) the $10,000,000 amount in section 1202(b)(1),
            ``(10) each of the $50,000,000 amounts in section 
        1202(d)(1),
            ``(11) the $50,000 amount in section 1244(b)(1), and
            ``(12) the $1,000,000 in section 1244(c)(3)(A).
    ``(c) Rounding.--
            ``(1) Any increase determined under paragraph (5), (9), or 
        (10) of subsection (b) shall be rounded to the nearest multiple 
        of $100,000.
            ``(2) Any increase determined under paragraph (1), (4), 
        (11), or (12) of subsection (b) shall be rounded to the nearest 
        multiple of $1,000.
            ``(3) Any increase determined under paragraph (2) of 
        subsection (b) shall be rounded to the nearest multiple of 
        $500.
            ``(4) Any increase determined under paragraph (3), (7), or 
        (8) of subsection (b) shall be rounded to the nearest multiple 
        of $100.
            ``(5) Any increase determined under paragraph (6) of 
        subsection (b) shall be rounded to the nearest multiple of 
        $5.''.
    (b) Conforming Amendments.--
            (1) Section 1202(b)(3) of such Code is amended by striking 
        ``paragraph (1)(A) shall be applied by substituting 
        `$5,000,000' for `$10,000,000''' and inserting ``the amount 
        under paragraph (1)(A) shall be 50 percent of such dollar 
        amount (determined without regard to this paragraph)''.
            (2) Section 1244(b)(2) of such Code is amended by striking 
        ``$100,000'' and inserting ``200 percent of the amount under 
        paragraph (1)''.
    (c) Clerical Amendment.--The table of sections for chapter 77 of 
such Code is amended by adding at the end the following new item:

``Sec. 7529. Inflation adjustments.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 202. REPORT ON IMPROVEMENTS TO CUSTOMER SERVICE.

    Not later than June 30, 2016, the Commissioner of Internal Revenue 
shall submit to the Committee on Small Business and Entrepreneurship of 
the Senate, the Committee on Finance of the Senate, and the Committee 
on Ways and Means of the House of Representatives a report detailing 
specific ways to improve customer service to small businesses, 
including objectively measurable goals for how to reduce response 
times.

SEC. 203. RETURN DUE DATE MODIFICATIONS.

    (a) New Due Date for Partnership Form 1065, S Corporation Form 
1120S, and C Corporation Form 1120.--
            (1) Partnerships.--
                    (A) In general.--Section 6072 of the Internal 
                Revenue Code of 1986 is amended by adding at the end 
                the following new subsection:
    ``(f) Returns of Partnerships.--Returns of partnerships under 
section 6031 made on the basis of the calendar year shall be filed on 
or before the 15th day of March following the close of the calendar 
year, and such returns made on the basis of a fiscal year shall be 
filed on or before the 15th day of the third month following the close 
of the fiscal year.''.
                    (B) Conforming amendment.--Section 6072(a) of such 
                Code is amended by striking ``6017, or 6031'' and 
                inserting ``or 6017''.
            (2) S corporations.--
                    (A) In general.--So much of subsection (b) of 6072 
                of such Code as precedes the second sentence thereof is 
                amended to read as follows:
    ``(b) Returns of Certain Corporations.--Returns of S corporations 
under sections 6012 and 6037 made on the basis of the calendar year 
shall be filed on or before the 31st day of March following the close 
of the calendar year, and such returns made on the basis of a fiscal 
year shall be filed on or before the last day of the third month 
following the close of the fiscal year.''.
                    (B) Conforming amendments.--
                            (i) Section 1362(b) of such Code is 
                        amended--
                                    (I) by striking ``15th'' each place 
                                it appears and inserting ``last'',
                                    (II) by striking ``2\1/2\'' each 
                                place it appears and inserting ``3'', 
                                and
                                    (III) by striking ``2 months and 15 
                                days'' in paragraph (4) and inserting 
                                ``3 months''.
                            (ii) Section 1362(d)(1)(C)(i) of such Code 
                        is amended by striking ``15th'' and inserting 
                        ``last''.
                            (iii) Section 1362(d)(1)(C)(ii) of such 
                        Code is amended by striking ``such 15th day'' 
                        and inserting ``the last day of the 3d month 
                        thereof''.
            (3) Conforming amendments relating to c corporations.--
                    (A) Section 170(a)(2)(B) of such Code is amended by 
                striking ``third month'' and inserting ``4th month''.
                    (B) Section 563 of such Code is amended by striking 
                ``third month'' each place it appears and inserting 
                ``4th month''.
                    (C) Section 1354(d)(1)(B)(i) of such Code is 
                amended by striking ``3d month'' and inserting ``4th 
                month''.
                    (D) Subsection (a) and (c) of section 6167 of such 
                Code are each amended by striking ``third month'' and 
                inserting ``4th month''.
                    (E) Section 6425(a)(1) of such Code is amended by 
                striking ``third month'' and inserting ``4th month''.
                    (F) Subsections (b)(2)(A), (g)(3), and (h)(1) of 
                section 6655 of such Code are each amended by striking 
                ``3rd month'' and inserting ``4th month''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to returns for taxable years beginning after 
        December 31, 2015.
    (b) Modification of Due Dates by Regulation.--In the case of 
returns for taxable years beginning after December 31, 2013, the 
Secretary of the Treasury or the Secretary's delegate shall modify 
appropriate regulations to provide as follows:
            (1) The maximum extension for the returns of partnerships 
        filing Form 1065 shall be a 6-month period beginning on the due 
        date for filing the return (without regard to any extensions).
            (2) The maximum extension for the returns of trusts and 
        estates filing Form 1041 shall be a 5\1/2\-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (3) The maximum extension for the returns of employee 
        benefit plans filing Form 5500 shall be an automatic 3\1/2\-
        month period beginning on the due date for filing the return 
        (without regard to any extensions).
            (4) The maximum extension for the Forms 990 (series) 
        returns of organizations exempt from income tax shall be an 
        automatic 6-month period beginning on the due date for filing 
        the return (without regard to any extensions).
            (5) The maximum extension for the returns of organizations 
        exempt from income tax that are required to file Form 4720 
        returns of excise taxes shall be an automatic 6-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (6) The maximum extension for the returns of trusts 
        required to file Form 5227 shall be an automatic 6-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (7) The maximum extension for the returns of Black Lung 
        Benefit Trusts required to file Form 6069 returns of excise 
        taxes shall be an automatic 6-month period beginning on the due 
        date for filing the return (without regard to any extensions).
            (8) The maximum extension for a taxpayer required to file 
        Form 8870 shall be an automatic 6-month period beginning on the 
        due date for filing the return (without regard to any 
        extensions).
            (9) The due date of Form 3520-A, Annual Information Return 
        of a Foreign Trust with a United States Owner, shall be the 
        15th day of the 4th month after the close of the trust's 
        taxable year, and the maximum extension shall be a 6-month 
        period beginning on such day.
            (10) The due date of FinCEN Form 114 (relating to Report of 
        Foreign Bank and Financial Accounts) shall be April 15 with a 
        maximum extension for a 6-month period ending on October 15, 
        and with provision for an extension under rules similar to the 
        rules of 26 C.F.R. 1.6081-5. For any taxpayer required to file 
        such form for the first time, the Secretary of the Treasury may 
        waive any penalty for failure to timely request or file an 
        extension.
            (11) Taxpayers filing Form 3520, Annual Return to Report 
        Transactions with Foreign Trusts and Receipt of Certain Foreign 
        Gifts, shall be allowed to extend the time for filing such form 
        separately from the income tax return of the taxpayer, for an 
        automatic 6-month period beginning on the due date for filing 
        the return (without regard to any extensions).
    (c) Corporations Permitted Statutory Automatic 6-month Extension of 
Income Tax Returns.--
            (1) In general.--Section 6081(b) of the Internal Revenue 
        Code of 1986 is amended by striking ``3 months'' and inserting 
        ``6 months''.
            (2) Effective date.--The amendment made by this section 
        shall apply to returns for taxable years beginning after 
        December 31, 2015.

          TITLE III--PROVISIONS RELATED TO START-UP BUSINESSES

SEC. 301. REDUCTION IN HOLDING PERIOD FOR QUALIFIED SMALL BUSINESS 
              STOCK.

    (a) In General.--Paragraph (1) of section 1202(a) of the Internal 
Revenue Code of 1986 is amended by striking ``5 years'' and inserting 
``3 years''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1202(b) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years''
            (2) Subparagraph (A) of section 1202(g)(2) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years'',
            (3) Subparagraph (C) of section 1202(h)(2) of such Code is 
        amended by striking ``5-year'' and inserting ``3-year'', and
            (4) Subparagraph (A) of section 1202(j)(1) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock issued after the date of the enactment of this Act.

SEC. 302. EXTENSION OF ROLLOVER PERIOD FOR QUALIFIED SMALL BUSINESS 
              STOCK.

    (a) In General.--Paragraph (1) of section 1045(a) of the Internal 
Revenue Code of 1986 is amended by striking ``60-day period'' and 
inserting ``1-year period''.
    (b) Conforming Amendment.--Paragraph (3) of section 1045(b) of such 
Code is amended by striking ``60-day period'' and inserting ``1-year 
period''.
    (c) Effective Date.--The amendment made by this section shall apply 
to sales after the date of the enactment of this Act.

    TITLE IV--PROMOTION AND EXPANSION OF PRIVATE EMPLOYEE OWNERSHIP

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Promotion and Expansion of Private 
Employee Ownership Act of 2015''.

SEC. 402. FINDINGS.

    Congress finds that--
            (1) on January 1, 1998--nearly 25 years after the Employee 
        Retirement Income Security Act of 1974 was enacted and the 
        employee stock ownership plan (hereafter in this section 
        referred to as an ``ESOP'') was created--employees were first 
        permitted to be owners of subchapter S corporations pursuant to 
        the Small Business Job Protection Act of 1996 (Public Law 104-
        188);
            (2) with the passage of the Taxpayer Relief Act of 1997 
        (Public Law 105-34), Congress designed incentives to encourage 
        businesses to become ESOP-owned S corporations;
            (3) since that time, several thousand companies have become 
        ESOP-owned S corporations, creating an ownership interest for 
        several million Americans in companies in every State in the 
        country, in industries ranging from heavy manufacturing to 
        technology development to services;
            (4) while estimates show that 40 percent of working 
        Americans have no formal retirement account at all, every 
        United States worker who is an employee-owner of an S 
        corporation company through an ESOP has a valuable qualified 
        retirement savings account;
            (5) recent studies have shown that employees of ESOP-owned 
        S corporations enjoy greater job stability than employees of 
        comparable companies;
            (6) studies also show that employee-owners of S corporation 
        ESOP companies have amassed meaningful retirement savings 
        through their S ESOP accounts that will give them the means to 
        retire with dignity;
            (7) under the Small Business Act (15 U.S.C. 631 et seq.) 
        and the regulations promulgated by the Administrator of the 
        Small Business Administration, a small business concern that 
        was eligible under the Small Business Act for the numerous 
        preferences of the Act is denied treatment as a small business 
        concern after an ESOP acquires more than 49 percent of the 
        business, even if the number of employees, the revenue of the 
        small business concern, and the racial, gender, or other 
        criteria used under the Act to determine whether the small 
        business concern is eligible for benefits under the Act remain 
        the same, solely because of the acquisition by the ESOP; and
            (8) it is the goal of Congress to both preserve and foster 
        employee ownership of S corporations through ESOPs.

SEC. 403. DEFERRAL OF TAX FOR CERTAIN SALES OF EMPLOYER STOCK TO 
              EMPLOYEE STOCK OWNERSHIP PLAN SPONSORED BY S CORPORATION.

    (a) In General.--Subparagraph (A) of section 1042(c)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``domestic C 
corporation'' and inserting ``domestic corporation''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to sales after the date of the enactment of this Act.

SEC. 404. DEPARTMENT OF TREASURY TECHNICAL ASSISTANCE OFFICE.

    (a) Establishment Required.--Before the end of the 90-day period 
beginning on the date of enactment of this Act, the Secretary of 
Treasury shall establish the S Corporation Employee Ownership 
Assistance Office to foster increased employee ownership of S 
corporations.
    (b) Duties of the Office.--The S Corporation Employee Ownership 
Assistance Office shall provide--
            (1) education and outreach to inform companies and 
        individuals about the possibilities and benefits of employee 
        ownership of S corporations; and
            (2) technical assistance to assist S corporations in 
        sponsoring employee stock ownership plans.

SEC. 405. SMALL BUSINESS AND EMPLOYEE STOCK OWNERSHIP.

    (a) In General.--The Small Business Act (15 U.S.C. 631 et seq.) is 
amended--
            (1) by redesignating section 47 as section 48; and
            (2) by inserting after section 46 the following:

``SEC. 47. EMPLOYEE STOCK OWNERSHIP PLANS.

    ``(a) Definitions.--In this section--
            ``(1) the term `ESOP' means an employee stock ownership 
        plan, as defined in section 4975(e)(7) of the Internal Revenue 
        Code of 1986, as amended; and
            ``(2) the term `ESOP business concern' means a business 
        concern that was a small business concern eligible for a loan, 
        preference, or other program under this Act before the date on 
        which more than 49 percent of the business concern was acquired 
        by an ESOP.
    ``(b) Continued Eligibility.--In determining whether an ESOP 
business concern qualifies as a small business concern for purposes of 
a loan, preference, or other program under this Act, each ESOP 
participant shall be treated as directly owning his or her 
proportionate share of the stock in the ESOP business concern owned by 
the ESOP.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on January 1 of the first calendar year beginning after the date 
of the enactment of this Act.

                                                       Calendar No. 226

114th CONGRESS

  1st Session

                              S. RES. 252

_______________________________________________________________________

                               RESOLUTION

      Expressing the sense of the Committee on Small Business and 
Entrepreneurship of the Senate relating to easing the burden of Federal 
                  tax compliance on small businesses.

_______________________________________________________________________

                           September 15, 2015

                         Placed on the calendar
```