III 

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 


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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; 


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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 

1 Resolved, That it is the sense of the Committee on 

2 Small Business and Entrepreneurship that the Senate 

3 should enact the following: 

4 TITLE I—SMALL BUSINESS TAX 

5 REFORM 

6 SEC. 101. EXPANSION OF CASH ACCOUNTING THRESHOLD. 

7 (a) IN GENERAL.— 

8 (1) IN GENERAL.—Paragraph (3) of section 

9 448(b) of the Internal Revenue Code of 1986 is 

10 amended by striking ‘‘$5,000,000’’ in the text and 

11 in the heading and inserting ‘‘$25,000,000’’. 

12 (2) CONFORMING AMENDMENTS.—Section 

13 448(c) of such Code is amended— 

14 (A) by striking ‘‘$5,000,000’’ each place it 

15 appears in the text and in the heading of para16 graph (1) and inserting ‘‘$25,000,000’’, and 

17 (B) by adding at the end the following new 

18 paragraph: 


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1 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

2 any taxable year beginning in a calendar year after 

3 2015, the dollar amount contained in subsection 

4 (b)(3) and paragraph (1) of this subsection shall be 

5 increased by an amount equal to— 

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

7 ‘‘(B) the cost-of-living adjustment deter8 mined under section 1(f)(3) for the calendar 

9 year in which the taxable year begins, by sub10 stituting ‘calendar year 2014’ for ‘calendar year 

11 1992’ in subparagraph (B) thereof. 

12 If any amount as adjusted under this subparagraph 

13 is not a multiple of $100,000, such amount shall be 

14 rounded to the nearest multiple of $100,000.’’. 

15 (b) EXEMPTION FROM INVENTORY REQUIREMENT.— 

16 Section 471 of the Internal Revenue Code of 1986 is 

17 amended by redesignating subsection (c) as subsection (d) 

18 and by inserting after subsection (b) the following new 

19 subsection: 

20 ‘‘(c) SECTION NOT TO APPLY TO CERTAIN CASH

21 METHOD TAXPAYERS.—If a taxpayer— 

22 ‘‘(1) would otherwise be required to use inven23 tories under this section for any taxable year, but 

24 ‘‘(2) the taxpayer meets the gross receipts test 

25 of section 448(b) for the taxable year and is eligible 


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1 and elects to use the cash receipts and disburse2 ments method of accounting for the taxable year, 

3 then the requirement to use inventories shall not apply 

4 to the taxpayer for the taxable year.’’. 

5 (c) EFFECTIVE DATE AND SPECIAL RULE.— 

6 (1) IN GENERAL.—The amendments made by 

7 this section shall apply to taxable years beginning 

8 after December 31, 2014. 

9 (2) CHANGE IN METHOD OF ACCOUNTING.—In 

10 the case of any taxpayer changing the taxpayer’s 

11 method of accounting for any taxable year under the 

12 amendments made by this section— 

13 (A) such change shall be treated as initi14 ated by the taxpayer; and 

15 (B) such change shall be treated as made 

16 with the consent of the Secretary of the Treas17 ury. 

18 SEC. 102. MODIFICATION OF SAFE HARBOR FOR EXPENS19 ING OF ACQUISITION OR PRODUCTION COSTS 

20 OF TANGIBLE PROPERTY. 

21 (a) REQUIREMENT TO MODIFY SAFE HARBOR.—The 

22 Secretary of the Treasury or his delegate shall, within 180 

23 days after the date of enactment of this Act, modify 

24 Treasury Regulations section 1.263(a)–1(f) by— 


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1 (1) increasing the amount of the de minimis 

2 safe harbor for taxpayers without applicable finan3 cial statements from $500 to $2,500, 

4 (2) requiring adequate records showing the dol5 lar amount being expensed in lieu of accounting pro6 cedures in place at the beginning of the taxable year, 

7 and 

8 (3) modifying the definition of applicable finan9 cial statement to include reviewed financial state10 ments. 

11 (b) EFFECTIVE DATE.—The modifications required 

12 by subsection (a) shall apply to taxable years beginning 

13 after December 31, 2014. 

14 SEC. 103. REMOVAL OF COMPUTER EQUIPMENT FROM 

15 LISTED PROPERTY. 

16 (a) IN GENERAL.—Section 280F(d)(4)(A) of the In17 ternal Revenue Code of 1986 is amended by inserting 

18 ‘‘and’’ at the end of clause (iii) and by striking clause (iv). 

19 (b) CONFORMING AMENDMENT.—Section 280F(d)(4) 

20 of the Internal Revenue Code of 1986 is amended by strik21 ing subparagraph (B) and by redesignating subparagraph 

22 (C) as subparagraph (B). 

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

24 this section shall apply to taxable years beginning after 

25 the date of the enactment of this Act. 


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1 SEC. 104. DEDUCTION FOR HEALTH INSURANCE COSTS IN 

2 COMPUTING SELF-EMPLOYMENT TAXES. 

3 (a) IN GENERAL.—Paragraph (4) of section 162(l) 

4 of the Internal Revenue Code of 1986 is amended by strik5 ing ‘‘for taxable years beginning before January 1, 2010, 

6 or after December 31, 2010’’ and inserting ‘‘for taxable 

7 years beginning before January 1, 2015.’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2014. 

11 SEC. 105. MODIFICATION OF RULES RELATING TO THE TER12 MINATION OF PARTNERSHIPS AND S COR13 PORATIONS. 

14 (a) NO TERMINATION OF PARTNERSHIP ON SALE OR

15 EXCHANGE OF ASSETS.— 

16 (1) IN GENERAL.—Section 708(b)(1) of the In17 ternal Revenue Code of 1986 is amended by striking 

18 ‘‘only if’’ and all that follows and inserting ‘‘only if 

19 no part of any business, financial operation, or ven20 ture of the partnership continues to be carried on by 

21 any of its partners in a partnership.’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 168(i)(7)(B) of such Code is 

24 amended by striking the last sentence. 

25 (B) Section 743(e) of such Code is amend26 ed by striking paragraph (4). 


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1 (C) Section 774 of such Code is amended 

2 by striking subsection (c). 

3 (b) NO TERMINATION OF S CORPORATION STATUS

4 DUE TO EXCESSIVE PASSIVE INVESTMENT INCOME.— 

5 Paragraph (3) of section 1362(d) of the Internal Revenue 

6 Code of 1986 is amended by adding at the end the fol7 lowing new subparagraph: 

8 ‘‘(D) TERMINATION.—This paragraph 

9 shall not apply to taxable years ending after the 

10 date of the enactment of this subparagraph.’’. 

11 TITLE II—PROVISIONS RELATED 

12 TO THE INTERNAL REVENUE 

13 SERVICE 

14 SEC. 201. INFLATION ADJUSTMENTS FOR CERTAIN PROVI15 SIONS. 

16 (a) IN GENERAL.—Chapter 77 of the Internal Rev17 enue Code of 1986 is amended by adding at the end the 

18 following new section: 

19 ‘‘SEC. 7529. INFLATION ADJUSTMENTS. 

20 ‘‘(a) IN GENERAL.—In the case of any taxable year 

21 beginning in a calendar year after 2015, each of the speci22 fied dollar amounts shall be increased by an amount equal 

23 to— 

24 ‘‘(1) such dollar amount, multiplied by 


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1 ‘‘(2) the cost-of-living adjustment determined 

2 under section 1(f)(3) for the calendar year in which 

3 the taxable year begins, determined by substituting 

4 ‘calendar year 2014’ for ‘calendar year 1992’ in sub5 paragraph (B) thereof. 

6 ‘‘(b) SPECIFIED DOLLAR AMOUNTS.—For purposes 

7 of subsection (a), the specified dollar amounts are— 

8 ‘‘(1) the $50,000 amount in section 79(a)(1), 

9 ‘‘(2) each of the $5,250 amounts in section 

10 127(a)(2), 

11 ‘‘(3) each of the $500 amounts in paragraphs 

12 (11)(A), (11)(B), and (12) of section 170(f), 

13 ‘‘(4) the $5,000 amount in section 

14 170(f)(11)(C), 

15 ‘‘(5) the $10,000,000 amount in section 

16 263A(b)(2), 

17 ‘‘(6) each of the dollar amounts in section 

18 274(b)(1), 

19 ‘‘(7) each of the $400 amounts in section 

20 274(j), 

21 ‘‘(8) the $1,600 amount in section 

22 274(j)(2)(B), 

23 ‘‘(9) the $10,000,000 amount in section 

24 1202(b)(1), 


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1 ‘‘(10) each of the $50,000,000 amounts in sec2 tion 1202(d)(1), 

3 ‘‘(11) the $50,000 amount in section 

4 1244(b)(1), and 

5 ‘‘(12) the $1,000,000 in section 1244(c)(3)(A). 

6 ‘‘(c) ROUNDING.— 

7 ‘‘(1) Any increase determined under paragraph 

8 (5), (9), or (10) of subsection (b) shall be rounded 

9 to the nearest multiple of $100,000. 

10 ‘‘(2) Any increase determined under paragraph 

11 (1), (4), (11), or (12) of subsection (b) shall be 

12 rounded to the nearest multiple of $1,000. 

13 ‘‘(3) Any increase determined under paragraph 

14 (2) of subsection (b) shall be rounded to the nearest 

15 multiple of $500. 

16 ‘‘(4) Any increase determined under paragraph 

17 (3), (7), or (8) of subsection (b) shall be rounded to 

18 the nearest multiple of $100. 

19 ‘‘(5) Any increase determined under paragraph 

20 (6) of subsection (b) shall be rounded to the nearest 

21 multiple of $5.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Section 1202(b)(3) of such Code is amend24 ed by striking ‘‘paragraph (1)(A) shall be applied by 

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1 serting ‘‘the amount under paragraph (1)(A) shall 

2 be 50 percent of such dollar amount (determined 

3 without regard to this paragraph)’’. 

4 (2) Section 1244(b)(2) of such Code is amend5 ed by striking ‘‘$100,000’’ and inserting ‘‘200 per6 cent of the amount under paragraph (1)’’. 

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

8 for chapter 77 of such Code is amended by adding at the 

9 end the following new item: 

‘‘Sec. 7529. Inflation adjustments.’’. 

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

11 this section shall apply to taxable years beginning after 

12 the date of the enactment of this Act. 

13 SEC. 202. REPORT ON IMPROVEMENTS TO CUSTOMER 

14 SERVICE. 

15 Not later than June 30, 2016, the Commissioner of 

16 Internal Revenue shall submit to the Committee on Small 

17 Business and Entrepreneurship of the Senate, the Com18 mittee on Finance of the Senate, and the Committee on 

19 Ways and Means of the House of Representatives a report 

20 detailing specific ways to improve customer service to 

21 small businesses, including objectively measurable goals 

22 for how to reduce response times. 


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1 SEC. 203. RETURN DUE DATE MODIFICATIONS. 

2 (a) NEW DUE DATE FOR PARTNERSHIP FORM 1065, 

3 S CORPORATION FORM 1120S, AND C CORPORATION

4 FORM 1120.— 

5 (1) PARTNERSHIPS.— 

6 (A) IN GENERAL.—Section 6072 of the In7 ternal Revenue Code of 1986 is amended by 

8 adding at the end the following new subsection: 

9 ‘‘(f) RETURNS OF PARTNERSHIPS.—Returns of part10 nerships under section 6031 made on the basis of the cal11 endar year shall be filed on or before the 15th day of 

12 March following the close of the calendar year, and such 

13 returns made on the basis of a fiscal year shall be filed 

14 on or before the 15th day of the third month following 

15 the close of the fiscal year.’’. 

16 (B) CONFORMING AMENDMENT.—Section 

17 6072(a) of such Code is amended by striking 

18 ‘‘6017, or 6031’’ and inserting ‘‘or 6017’’. 

19 (2) S CORPORATIONS.— 

20 (A) IN GENERAL.—So much of subsection 

21 (b) of 6072 of such Code as precedes the sec22 ond sentence thereof is amended to read as fol23 lows: 

24 ‘‘(b) RETURNS OF CERTAIN CORPORATIONS.—Re25 turns of S corporations under sections 6012 and 6037 

26 made on the basis of the calendar year shall be filed on 


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1 or before the 31st day of March following the close of the 

2 calendar year, and such returns made on the basis of a 

3 fiscal year shall be filed on or before the last day of the 

4 third month following the close of the fiscal year.’’. 

5 (B) CONFORMING AMENDMENTS.— 

6 (i) Section 1362(b) of such Code is 

7 amended— 

8 (I) by striking ‘‘15th’’ each place 

9 it appears and inserting ‘‘last’’, 

(II) by striking ‘‘21 10 ⁄2’’ each place 

11 it appears and inserting ‘‘3’’, and 

12 (III) by striking ‘‘2 months and 

13 15 days’’ in paragraph (4) and insert14 ing ‘‘3 months’’. 

15 (ii) Section 1362(d)(1)(C)(i) of such 

16 Code is amended by striking ‘‘15th’’ and 

17 inserting ‘‘last’’. 

18 (iii) Section 1362(d)(1)(C)(ii) of such 

19 Code is amended by striking ‘‘such 15th 

20 day’’ and inserting ‘‘the last day of the 3d 

21 month thereof’’. 

22 (3) CONFORMING AMENDMENTS RELATING TO C

23 CORPORATIONS.— 


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1 (A) Section 170(a)(2)(B) of such Code is 

2 amended by striking ‘‘third month’’ and insert3 ing ‘‘4th month’’. 

4 (B) Section 563 of such Code is amended 

5 by striking ‘‘third month’’ each place it appears 

6 and inserting ‘‘4th month’’. 

7 (C) Section 1354(d)(1)(B)(i) of such Code 

8 is amended by striking ‘‘3d month’’ and insert9 ing ‘‘4th month’’. 

10 (D) Subsection (a) and (c) of section 6167 

11 of such Code are each amended by striking 

12 ‘‘third month’’ and inserting ‘‘4th month’’. 

13 (E) Section 6425(a)(1) of such Code is 

14 amended by striking ‘‘third month’’ and insert15 ing ‘‘4th month’’. 

16 (F) Subsections (b)(2)(A), (g)(3), and 

17 (h)(1) of section 6655 of such Code are each 

18 amended by striking ‘‘3rd month’’ and inserting 

19 ‘‘4th month’’. 

20 (4) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall apply to returns for taxable 

22 years beginning after December 31, 2015. 

23 (b) MODIFICATION OF DUE DATES BY REGULA24 TION.—In the case of returns for taxable years beginning 

25 after December 31, 2013, the Secretary of the Treasury 


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1 or the Secretary’s delegate shall modify appropriate regu2 lations to provide as follows: 

3 (1) The maximum extension for the returns of 

4 partnerships filing Form 1065 shall be a 6-month 

5 period beginning on the due date for filing the re6 turn (without regard to any extensions). 

7 (2) The maximum extension for the returns of 

trusts and estates filing Form 1041 shall be a 51 8 ⁄2- 

9 month period beginning on the due date for filing 

10 the return (without regard to any extensions). 

11 (3) The maximum extension for the returns of 

12 employee benefit plans filing Form 5500 shall be an 

automatic 31 13 ⁄2-month period beginning on the due 

14 date for filing the return (without regard to any ex15 tensions). 

16 (4) The maximum extension for the Forms 990 

17 (series) returns of organizations exempt from income 

18 tax shall be an automatic 6-month period beginning 

19 on the due date for filing the return (without regard 

20 to any extensions). 

21 (5) The maximum extension for the returns of 

22 organizations exempt from income tax that are re23 quired to file Form 4720 returns of excise taxes 

24 shall be an automatic 6-month period beginning on 


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1 the due date for filing the return (without regard to 

2 any extensions). 

3 (6) The maximum extension for the returns of 

4 trusts required to file Form 5227 shall be an auto5 matic 6-month period beginning on the due date for 

6 filing the return (without regard to any extensions). 

7 (7) The maximum extension for the returns of 

8 Black Lung Benefit Trusts required to file Form 

9 6069 returns of excise taxes shall be an automatic 

10 6-month period beginning on the due date for filing 

11 the return (without regard to any extensions). 

12 (8) The maximum extension for a taxpayer re13 quired to file Form 8870 shall be an automatic 6- 

14 month period beginning on the due date for filing 

15 the return (without regard to any extensions). 

16 (9) The due date of Form 3520–A, Annual In17 formation Return of a Foreign Trust with a United 

18 States Owner, shall be the 15th day of the 4th 

19 month after the close of the trust’s taxable year, and 

20 the maximum extension shall be a 6-month period 

21 beginning on such day. 

22 (10) The due date of FinCEN Form 114 (relat23 ing to Report of Foreign Bank and Financial Ac24 counts) shall be April 15 with a maximum extension 

25 for a 6-month period ending on October 15, and 


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1 with provision for an extension under rules similar 

2 to the rules of 26 C.F.R. 1.6081–5. For any tax3 payer required to file such form for the first time, 

4 the Secretary of the Treasury may waive any penalty 

5 for failure to timely request or file an extension. 

6 (11) Taxpayers filing Form 3520, Annual Re7 turn to Report Transactions with Foreign Trusts 

8 and Receipt of Certain Foreign Gifts, shall be al9 lowed to extend the time for filing such form sepa10 rately from the income tax return of the taxpayer, 

11 for an automatic 6-month period beginning on the 

12 due date for filing the return (without regard to any 

13 extensions). 

14 (c) CORPORATIONS PERMITTED STATUTORY AUTO15 MATIC 6-MONTH EXTENSION OF INCOME TAX RE16 TURNS.— 

17 (1) IN GENERAL.—Section 6081(b) of the In18 ternal Revenue Code of 1986 is amended by striking 

19 ‘‘3 months’’ and inserting ‘‘6 months’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by this section shall apply to returns for taxable 

22 years beginning after December 31, 2015. 


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1 TITLE III—PROVISIONS RE2 LATED TO START-UP BUSI3 NESSES 

4 SEC. 301. REDUCTION IN HOLDING PERIOD FOR QUALIFIED 

5 SMALL BUSINESS STOCK. 

6 (a) IN GENERAL.—Paragraph (1) of section 1202(a) 

7 of the Internal Revenue Code of 1986 is amended by strik8 ing ‘‘5 years’’ and inserting ‘‘3 years’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Paragraph (2) of section 1202(b) of such 

11 Code is amended by striking ‘‘5 years’’ and inserting 

12 ‘‘3 years’’ 

13 (2) Subparagraph (A) of section 1202(g)(2) of 

14 such Code is amended by striking ‘‘5 years’’ and in15 serting ‘‘3 years’’, 

16 (3) Subparagraph (C) of section 1202(h)(2) of 

17 such Code is amended by striking ‘‘5-year’’ and in18 serting ‘‘3-year’’, and 

19 (4) Subparagraph (A) of section 1202(j)(1) of 

20 such Code is amended by striking ‘‘5 years’’ and in21 serting ‘‘3 years’’. 

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

23 this section shall apply to stock issued after the date of 

24 the enactment of this Act. 


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1 SEC. 302. EXTENSION OF ROLLOVER PERIOD FOR QUALI2 FIED SMALL BUSINESS STOCK. 

3 (a) IN GENERAL.—Paragraph (1) of section 1045(a) 

4 of the Internal Revenue Code of 1986 is amended by strik5 ing ‘‘60-day period’’ and inserting ‘‘1-year period’’. 

6 (b) CONFORMING AMENDMENT.—Paragraph (3) of 

7 section 1045(b) of such Code is amended by striking ‘‘60- 

8 day period’’ and inserting ‘‘1-year period’’. 

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

10 this section shall apply to sales after the date of the enact11 ment of this Act. 

12 TITLE IV—PROMOTION AND EX13 PANSION OF PRIVATE EM14 PLOYEE OWNERSHIP 

15 SEC. 401. SHORT TITLE. 

16 This title may be cited as the ‘‘Promotion and Expan17 sion of Private Employee Ownership Act of 2015’’. 

18 SEC. 402. FINDINGS. 

19 Congress finds that— 

20 (1) on January 1, 1998—nearly 25 years after 

21 the Employee Retirement Income Security Act of 

22 1974 was enacted and the employee stock ownership 

23 plan (hereafter in this section referred to as an 

24 ‘‘ESOP’’) was created—employees were first per25 mitted to be owners of subchapter S corporations 


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1 pursuant to the Small Business Job Protection Act 

2 of 1996 (Public Law 104–188); 

3 (2) with the passage of the Taxpayer Relief Act 

4 of 1997 (Public Law 105–34), Congress designed in5 centives to encourage businesses to become ESOP6 owned S corporations; 

7 (3) since that time, several thousand companies 

8 have become ESOP-owned S corporations, creating 

9 an ownership interest for several million Americans 

10 in companies in every State in the country, in indus11 tries ranging from heavy manufacturing to tech12 nology development to services; 

13 (4) while estimates show that 40 percent of 

14 working Americans have no formal retirement ac15 count at all, every United States worker who is an 

16 employee-owner of an S corporation company 

17 through an ESOP has a valuable qualified retire18 ment savings account; 

19 (5) recent studies have shown that employees of 

20 ESOP-owned S corporations enjoy greater job sta21 bility than employees of comparable companies; 

22 (6) studies also show that employee-owners of S 

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1 counts that will give them the means to retire with 

2 dignity; 

3 (7) under the Small Business Act (15 U.S.C. 

4 631 et seq.) and the regulations promulgated by the 

5 Administrator of the Small Business Administration, 

6 a small business concern that was eligible under the 

7 Small Business Act for the numerous preferences of 

8 the Act is denied treatment as a small business con9 cern after an ESOP acquires more than 49 percent 

10 of the business, even if the number of employees, the 

11 revenue of the small business concern, and the ra12 cial, gender, or other criteria used under the Act to 

13 determine whether the small business concern is eli14 gible for benefits under the Act remain the same, 

15 solely because of the acquisition by the ESOP; and 

16 (8) it is the goal of Congress to both preserve 

17 and foster employee ownership of S corporations 

18 through ESOPs. 

19 SEC. 403. DEFERRAL OF TAX FOR CERTAIN SALES OF EM20 PLOYER STOCK TO EMPLOYEE STOCK OWN21 ERSHIP PLAN SPONSORED BY S CORPORA22 TION. 

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

24 1042(c)(1) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘domestic C corporation’’ and insert2 ing ‘‘domestic corporation’’. 

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

4 subsection (a) shall apply to sales after the date of the 

5 enactment of this Act. 

6 SEC. 404. DEPARTMENT OF TREASURY TECHNICAL ASSIST7 ANCE OFFICE. 

8 (a) ESTABLISHMENT REQUIRED.—Before the end of 

9 the 90-day period beginning on the date of enactment of 

10 this Act, the Secretary of Treasury shall establish the S 

11 Corporation Employee Ownership Assistance Office to fos12 ter increased employee ownership of S corporations. 

13 (b) DUTIES OF THE OFFICE.—The S Corporation 

14 Employee Ownership Assistance Office shall provide— 

15 (1) education and outreach to inform companies 

16 and individuals about the possibilities and benefits of 

17 employee ownership of S corporations; and 

18 (2) technical assistance to assist S corporations 

19 in sponsoring employee stock ownership plans. 

20 SEC. 405. SMALL BUSINESS AND EMPLOYEE STOCK OWNER21 SHIP. 

22 (a) IN GENERAL.—The Small Business Act (15 

23 U.S.C. 631 et seq.) is amended— 

24 (1) by redesignating section 47 as section 48; 

25 and 


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1 (2) by inserting after section 46 the following: 

2 ‘‘SEC. 47. EMPLOYEE STOCK OWNERSHIP PLANS. 

3 ‘‘(a) DEFINITIONS.—In this section— 

4 ‘‘(1) the term ‘ESOP’ means an employee stock 

5 ownership plan, as defined in section 4975(e)(7) of 

6 the Internal Revenue Code of 1986, as amended; 

7 and 

8 ‘‘(2) the term ‘ESOP business concern’ means 

9 a business concern that was a small business con10 cern eligible for a loan, preference, or other program 

11 under this Act before the date on which more than 

12 49 percent of the business concern was acquired by 

13 an ESOP. 

14 ‘‘(b) CONTINUED ELIGIBILITY.—In determining 

15 whether an ESOP business concern qualifies as a small 

16 business concern for purposes of a loan, preference, or 

17 other program under this Act, each ESOP participant 

18 shall be treated as directly owning his or her proportionate 

19 share of the stock in the ESOP business concern owned 

20 by the ESOP.’’. 

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

22 this section shall take effect on January 1 of the first cal23 endar year beginning after the date of the enactment of 

24 this Act. 


rfrederick on DSK6VPTVN1PROD with BILLS
Calendar No. 226 

114TH CONGRESS 

1ST SESSION S. RES. 252 

RESOLUTION 

Expressing the sense of the Committee on Small 

pliance on small businesses. lating to easing the burden of Federal tax comBusiness and Entrepreneurship of the Senate reSEPTEMBER 15, 2015 

Placed on the calendar 


rfrederick on DSK6VPTVN1PROD with BILLS