Technical Corrections Act of 2016

To amend the Internal Revenue Code of 1986 to make technical corrections, and for other purposes. 1. Short title; table of contents; etc (a) Short title This Act may be cited as the Technical Corrections Act of 2016 (b) Amendment Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents; etc. Sec. 2. Amendments relating to Protecting Americans from Tax Hikes Act of 2015. Sec. 3. Amendment relating to Consolidated Appropriations Act, 2016. Sec. 4. Amendments relating to Fixing America’s Surface Transportation Act. Sec. 5. Amendments relating to Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. Sec. 6. Amendments relating to Stephen Beck, Jr., ABLE Act of 2014. Sec. 7. Amendment relating to American Taxpayer Relief Act of 2012. Sec. 8. Amendment relating to United States–Korea Free Trade Agreement Implementation Act. Sec. 9. Clerical corrections. Sec. 10. Deadwood-related provisions. 2. Amendments relating to Protecting Americans from Tax Hikes Act of 2015 (a) Amendment relating to section 105 Section 132(f)(6)(A) (b) Amendments relating to section 121 Section 41(c) (1) by striking paragraph (4), and (2) by striking the last sentence of paragraph (5)(C). (c) Amendments relating to section 143 (1) Section 168(k)(2)(B)(i)(III) binding contract (2) Section 168(k)(5)(F) (A) by striking (or is grafted to a plant that has already been planted before such date) (B) by inserting or grafted which is planted (C) by striking (or so grafted) or grafted (3) Section 168(k)(6) (6) Phase-down In the case of qualified property placed in service by the taxpayer after December 31, 2017 (December 31, 2018, in the case of property described in subparagraph (2)(B) or (C)), paragraph (1)(A) shall be applied by substituting for 50 percent (A) 40 percent (i) property placed in service in 2018 (other than property described in subparagraph (2)(B) or (C)), and (ii) property described in subparagraph (2)(B) or (C) which is placed in service in 2019, and (B) 30 percent (i) property placed in service in 2019 (other than property described in subparagraph (2)(B) or (C)), and (ii) property described in subparagraph (2)(B) or (C) which is placed in service in 2020. . (4) Section 168(k)(7) paragraphs (1) and (2)(F) paragraphs (1), (2)(F), and (4) (d) Amendments relating to section 202 (1) Section 6722(c)(3)(A) filed furnished (2) Section 202(e) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking provided furnished (e) Amendments relating to section 203 (1) Section 6109(i)(1)(B) Internal Revenue Service Internal Revenue Service, a community-based certified acceptance agent approved by the Secretary, (2) Section 6109(i)(3) (A) in subparagraph (A)— (i) by inserting ending after the issuance of such number (ii) by striking on the last day of such third consecutive taxable year on the day after the due date for the return of tax for such third consecutive taxable year (B) by striking subparagraph (B)(ii) and inserting the following: (ii) if the individual does not file a return of tax (or is not included as a dependent on the return of tax of another taxpayer) for 3 consecutive taxable years at least one of which ends after December 18, 2015, the due date for the return of tax for such third consecutive taxable year. . (3) Section 203(f) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking The amendments Except to the extent provided in section 6109(i)(3) (f) Amendments relating to section 204 Section 204(b) of the Protecting Americans from Tax Hikes Act of 2015 is amended— (1) by striking paragraph (2), and (2) by striking so much as precedes amendment made by this section (b) Effective date. (g) Amendments relating to section 205 (1) Section 24(e)(2) identifying number taxpayer identification number (2) Section 205(c) of such Act is amended— (A) by striking paragraph (2), and (B) by striking so much as precedes shall apply to any return of tax (c) Effective date. (h) Amendments relating to section 206 Section 206(b) of such Act is amended— (1) by striking Except as provided in paragraph (2), the amendment The amendment (2) by striking paragraph (2) and redesignating paragraph (3) as paragraph (2). (i) Amendment relating to section 209 Section 209(d)(2) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking amendment made by subsection (b) amendments made by subsections (b) and (c) (j) Amendments related to sections 102 206 207 208 211 (1) Section 25A(b)(1) (A) in subparagraph (A) by striking $1,000 $2,000 (B) in subparagraph (B)— (i) by striking 50 percent 25 percent (ii) by striking $1,000 $2,000 (iii) by striking the applicable limit $4,000 (2) Subparagraphs (A) and (C) of section 25A(b)(2) are amended by striking 2 4 (3) Section 25A(b)(4) (4) Restrictions on taxpayers who improperly claimed American Opportunity Tax Credit in prior years (A) Taxpayers making prior fraudulent or reckless claims (i) In general No American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period. (ii) Disallowance period For purposes of subparagraph (A), the disallowance period is— (I) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to fraud, and (II) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of the American Opportunity Tax Credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). (B) Taxpayers making improper prior claims In the case of a taxpayer who is denied the American Opportunity Tax Credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no American Opportunity Tax Credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit. . (4) Section 25A(d) (d) Limitations based on modified adjusted gross income (1) American Opportunity Tax Credit The American Opportunity Tax Credit (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) $80,000 ($160,000 in the case of a joint return), bears to (B) $10,000 ($20,000 in the case of a joint return). (2) Lifetime Learning Credit The Lifetime Learning Credit (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) $40,000 ($80,000 in the case of a joint return), bears to (B) $10,000 ($20,000 in the case of a joint return). (3) Modified adjusted gross income For purposes of this subsection, the term modified adjusted gross income . (5) Section 25A(f)(1) (D) Required course materials taken into account for American Opportunity Tax Credit For purposes of determining the American Opportunity Tax Credit, subparagraph (A) shall be applied by substituting tuition, fees, and course materials tuition and fees . (6) Section 25A(g)(1) (A) by striking No credit (A) In general No credit , and (B) by adding at the end the following new subparagraph: (B) Additional identification requirements with respect to American Opportunity Tax Credit (i) Student The requirements of subparagraph (A) shall not be treated as met with respect to the American Opportunity Tax Credit unless the individual's taxpayer identification number was issued on or before the due date for filing the return of tax for the taxable year. (ii) Taxpayer No American Opportunity Tax Credit shall be allowed under this section if the taxpayer identification number of the taxpayer was issued after the due date for filing the return for the taxable year. (iii) Institution No American Opportunity Tax Credit shall be allowed under this section unless the taxpayer includes the employer identification number of any institution to which qualified tuition and related expenses were paid with respect to the individual. . (7) Section 25A(h) (h) Inflation adjustment (1) In general In the case of a taxable year beginning after 2001, the $40,000 and $80,000 amounts in subsection (d)(2) shall each 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, determined by substituting calendar year 2000 calendar year 1992 (2) Rounding If any amount as adjusted under paragraph (1) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. . (8) Section 25A(i) (i) Portion of American Opportunity Tax Credit made refundable 40 percent of so much of the credit allowed under subsection (a) as is attributable to the American Opportunity Tax Credit (determined after application of subsection (d) and without regard to this paragraph and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection (g) of section 1 applies for such taxable year. . (9) The heading for section 25A Hope American Opportunity (10) The item relating to section 25A in the table of contents for subpart A of part IV of subchapter A of chapter 1 Sec. 25A. American Opportunity and Lifetime Learning credits. . (11) The heading for section 25A(b) Hope Scholarship Credit American Opportunity Tax Credit (12) The heading for section 25A(b)(2) hope scholarship credit american opportunity tax credit (13) The heading for section 25A(c)(2)(A) hope scholarship american opportunity tax credit (14) Section 25A Hope Scholarship Credit American Opportunity Tax Credit (15) The heading for section 529(c)(3)(B)(v) hope american opportunity (16) The heading for section 530(d)(2)(C) hope american opportunity (17) Section 6211(b)(4)(A), as amended by this Act, is amended by striking subsection (i)(5) subsection (i) (18) Section 6213(g)(2)(Q) (Q) an omission of information required by section 25A(b)(4)(B) or an entry on the return claiming the American Opportunity Tax Credit for a taxable year for which such credit is disallowed under section 25A(b)(4)(A). . (19) Section 207(b)(1) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking the American opportunity tax credit under section 25A(i) of such Code the American Opportunity Tax Credit under section 25A of such Code (k) Amendment relating to section 311 The last sentence of section 355(h)(2)(B) 80 percent at least 80 percent (l) Amendments relating to section 322 (1) Section 897(k)(2) (A) by striking so much of subparagraph (B) as precedes amounts realized by the qualified shareholder (B) Exception In the case of a qualified shareholder with 1 or more applicable investors— (i) subparagraph (A)(i) shall not apply to the applicable percentage of the stock of the real estate investment trust held by the qualified shareholder, and (ii) the applicable percentage of the , and (B) by adding at the end the following new subparagraph: (F) Applicable percentage For purposes of subparagraph (B), the term applicable percentage . (2) Section 897(k)(2)(E) and (C) and (D) (3) Section 897(k)(3)(B)(i) for a reduced rate of withholding (i) which— (I) is eligible for benefits under the comprehensive income tax treaty described in subparagraph (A)(i)(I), but only if the dividends article of such treaty imposes conditions on the benefits allowable in the case of dividends paid by a real estate investment trust, and (II) is eligible under such treaty . (4) Section 897(k)(3)(B)(ii) (A) by inserting and (B) by striking United States corporation domestic corporation (5) Section 322 of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking subsections (b)(2) and (c)(3), and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments made thereby, had never been enacted. (6) Section 322(c)(2) of such Act is amended by striking take effect on apply with respect to testing periods (as defined in section 897(h)(4)(D) (m) Effective date The amendments made by this section shall take effect as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015 to which they relate. 3. Amendment relating to Consolidated Appropriations Act, 2016 (a) Amendment relating to section 305 Section 199(c)(3)(C)(i) under subsection (d)(9)(B) (as defined in subsection (d)(9)(B)) (b) Effective date The amendment made by this section shall take effect as if included in section 305 of division P of the Consolidated Appropriations Act, 2016. 4. Amendments relating to Fixing America’s Surface Transportation Act (a) Amendments relating to section 32101 Section 7345(e)(1) (1) by striking or the Tax Court , or against the Commissioner in the Tax Court, (2) by adding at the end the following: For purposes of the preceding sentence, the court first acquiring jurisdiction over such an action shall have sole jurisdiction. (b) Effective date The amendments made by this section shall take effect as if included in section 32101 of the Fixing America’s Surface Transportation Act. 5. Amendments relating to Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (a) Amendment relating to section 2004 Section 6662(k) (k) Inconsistent estate basis reporting For purposes of this section, there is an inconsistent estate basis . (b) Amendments relating to section 2008 Section 9503(e)(2) (1) by striking per gallon per energy equivalent of a gallon of diesel (as defined in section 4041(a)(2)(D)) (2) by striking per gallon per energy equivalent of a gallon of gasoline (as defined in section 4041(a)(2)(C)) (c) Effective date The amendments made by this section shall take effect as if included in the provision of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 to which they relate. 6. Amendments relating to Stephen Beck, Jr., ABLE Act of 2014 (a) Amendments relating to section 208 Section 208(h) of the Stephen Beck, Jr., ABLE Act of 2014 is amended— (1) by striking so much as precedes made by this section (h) Effective date (1) In general Except as provided in paragraph (2), the amendments , (2) by inserting , and statements required to be furnished, returns required to be filed (3) by adding at the end the following new paragraph: (2) Subsection (c) The amendment made by subsection (c) shall apply to returns or claims for refund filed after December 31, 2014. . (b) Effective date The amendments made by this section shall take effect as if included in section 208 of the Stephen Beck, Jr., ABLE Act of 2014. 7. Amendment relating to American Taxpayer Relief Act of 2012 (a) Amendment relating to section 104 Section 6211(b)(4)(A) subsection (i)(6) subsection (i)(5) (b) Effective date The amendment made by this section shall take effect as if included in section 104 of the American Taxpayer Relief Act of 2012. 8. Amendment relating to United States–Korea Free Trade Agreement Implementation Act (a) Amendment relating to section 501 Section 501(b) of the United States–Korea Free Trade Agreement Implementation Act is amended by striking returns required to be filed documents prepared (b) Effective date The amendment made by this section shall take effect as if included in section 501 of the United States–Korea Free Trade Agreement Implementation Act. 9. Clerical corrections (a) Section 24(d) (b) (1) Section 42(f)(5)(B)(ii)(I) (d)(6)(C) (d)(6)(B) (2) Section 42(k)(2)(B) (d)(6)(B) (d)(6)(C) (3) Section 42(d)(4)(C)(i) as defined in paragraph (5)(C) as defined in paragraph (5)(B)(ii) (4) Section 42(m)(1)(B)(ii)(III) as defined in subsection (d)(5)(C) as defined in subsection (d)(5)(B)(ii) (c) Section 48(a)(6)(B) property energy property energy property (d) Section 58(a)(2)(A) 461(j) 461(k) (e) Section 139E(c)(3) 2013 2014 (f) Section 168(e)(3)(C)(i) and (g) Section 199 There shall be allowed (a) Allowance of deduction. (h) The second sentence of section 355(h)(2)(B) of assets (i) (1) Section 461 (2) Section 461(i)(4) subsection (j) subsection (k) (j) Section 464(d)(2)(B)(iii) subsection (c)(2)(E) section 461(k)(2)(E) (k) Section 852(a)(1)(B) 265, 265 and (l) Subparagraphs (A) and (B) of section 856(c)(7) are each amended by striking paragraph (4)(B)(iii) paragraph (4)(B)(iv) (m) Paragraphs (1), (3), (4), and (5) of section 856(m) are each amended by striking subsection (c)(4)(B)(iii) subsection (c)(4)(B)(iv) (n) Section 864(d)(8) section 956(b)(3) section 956(c)(3) (o) The heading for section 897(k)(2) usrpi united states real property interest (p) Subparagraphs (B) and (C) of section 1256(e)(3) are each amended by striking section 464(e)(2) section 461(k)(4) (q) Section 1400F(d) for December 31, 2014. for December 31, 2016. (r) (1) Subsections (e) and (i) of section 7422 and sections 3121(b)(5)(E), 6110(j)(1)(B), 7428(a), and 7430(c)(6) are each amended by striking United States Claims Court United States Court of Federal Claims (2) Subsections (a), (b), and (c)(1)(C)(iii) of section 7428 are each amended by striking Claims Court Court of Federal Claims (3) The heading for section 4961(c)(1) united states claims court united states court of federal claims (s) Section 4980I(b)(3)(C)(v) for for for (t) Subchapter C of chapter 63 (1) by striking Part 1—Procedure Part III—Procedure (2) by striking Part 2—Definitions and Special Rules Part IV—Definitions and Special Rules (u) Section 32103(a) of the Fixing America’s Surface Transportation Act is amended by striking section 52106 section 32102 (v) Section 6213(g)(2)(P) (1) by striking section 24(h)(2) section 24(g)(2) (2) by striking subsection (h)(1) subsection (g)(1) (w) Section 6235(a) subpart subchapter (x) Section 6501(m) any election (or any any election under section 30B(h)(9), 30C(e)(4), 30D(e)(4), 35(g)(11), 40(f), 43, 45B, 45C(d)(4), 45H(g), or 51(j) (or any (y) Each of the following sections are amended by inserting an amount equal to increased by for the calendar year section 1(f)(3) (1) Section 6651(i). (2) Section 6652(c)(7)(A). (3) Section 6695(h)(1). (4) Section 6698(e)(1). (5) Section 6699(e)(1). (6) Section 6721(f)(1). (7) Section 6722(f)(1). (z) The heading for section 6676(c) reasonable basis reasonable cause (aa) Section 6700(a) the $1,000 $1,000 (bb) Section 9503(c)(5) and before October 1, 2011, (cc) Section 302 of division P of the Consolidated Appropriations Act, 2016 is amended— (1) in subsection (a), by inserting of the Internal Revenue Code of 1986 section 48(a)(5)(C) (2) in subsection (b), by inserting of such Code section 48(a) 10. Deadwood-related provisions (a) Section 25A(c)(1) ($5,000 in the case of taxable years beginning before January 1, 2003) (b) Section 56(d)(1)(A)(ii)(I) (as in effect before its repeal by the Tax Increase Prevention Act of 2014) section 172(b)(1)(H) (c) Section 139(c)(2) section 165(h)(3)(C)(i) section 165(i)(5)(A) (d) Section 163(d)(4) (e) Section 530(b)(3) (1) by striking (as defined in section 170(e)(6)(F)(i)) (2) by adding at the end the following new subparagraph: (C) Computer technology or equipment The term computer technology or equipment . (f) Section 810(b) (g) Section 856(m) (h) (1) Section 1252(a)(1) during a taxable year beginning (2) Section 1252(a)(1)(A) (A) by striking sections section (B) by striking and 182 Tax Reform Act of 1986) (3) Section 1252(a)(2) (A) by striking sections section (B) by striking or 182 (i) Section 7448(d) at 4 percent per annum to December 31, 1947, and 3 percent per annum thereafter at 3 percent per annum

Summary: Technical Corrections Act of 2016 This bill makes technical and clerical amendments to: the Protecting Americans From Tax Hikes Act of 2015; the Consolidated Appropriations Act, 2016; the Fixing America's Surface Transportation Act; the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015; the Stephen Beck, Jr., ABLE Act of 2014; the American Taxpayer Relief Act of 2012; the United States-Korea Free Trade Agreement Implementation Act; and other specified provisions of the Internal Revenue Code. The bill also amends various provisions in the Internal Revenue Code that are not used in computing current tax liabilities (referred to as deadwood provisions).