247
taxpayer identifies such amount as a deposit made 
pursuant to section 6603 of the Internal Revenue 
Code (as added by this Act) shall be treated as the 
date such amount is deposited for purposes of such 
section 6603. 
SEC. 3036. PARTIAL PAYMENT OF TAX LIABILITY IN IN-
STALLMENT AGREEMENTS. 
(a) IN GENERAL.—
(1) Section 6159(a) (relating to authorization of 
agreements) is amended—
(A) by striking ‘‘satisfy liability for pay-
ment of’’ and inserting ‘‘make payment on’’, and 
(B) by inserting ‘‘full or partial’’ after ‘‘fa-
cilitate’’. 
(2) Section 6159(c) (relating to Secretary re-
quired to enter into installment agreements in certain 
cases) is amended in the matter preceding paragraph 
(1) by inserting ‘‘full’’ before ‘‘payment’’. 
(b) REQUIREMENT TO REVIEW PARTIAL PAYMENT 
AGREEMENTS
EVERY
TWO
YEARS.—Section 6159 is 
amended by redesignating subsections (d) and (e) as sub-
sections (e) and (f), respectively, and inserting after sub-
section (c) the following new subsection: 
‘‘(d) SECRETARY REQUIRED TO REVIEW INSTALL-
MENT AGREEMENTS FOR PARTIAL COLLECTION EVERY TWO
248
YEARS.—In the case of an agreement entered into by the 
Secretary under subsection (a) for partial collection of a 
tax liability, the Secretary shall review the agreement at 
least once every 2 years.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to agreements entered into on or after 
the date of the enactment of this Act. 
SEC. 3037. EXTENSION OF IRS USER FEES. 
(a) IN GENERAL.—Section 7528(c) (relating to termi-
nation) is amended by striking ‘‘December 31, 2004’’ and 
inserting ‘‘September 30, 2013’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to requests after the date of the enact-
ment of this Act.
TITLE 
IV—TRADE 
ENHANCE-
MENT AND COMPLIANCE PRO-
VISIONS 
SEC. 4001. REPEAL OF EXCLUSION FOR EXTRATERRITORIAL 
INCOME. 
(a) IN GENERAL.—Section 114 is hereby repealed. 
(b) CONFORMING AMENDMENTS.—
(1) Subpart E of part III of subchapter N of 
chapter 1 (relating to qualifying foreign trade in-
come) is hereby repealed.
249
(2) The table of subparts for such part III is 
amended by striking the item relating to subpart E. 
(3) The table of sections for part III of sub-
chapter B of chapter 1 is amended by striking the 
item relating to section 114. 
(c) EFFECTIVE DATE.—Except as provided in sub-
section (d), the amendments made by this section shall 
apply to transactions after December 31, 2003. 
(d) TRANSITIONAL RULE FOR 2004, 2005, AND 2006.—
(1) IN GENERAL.—In the case of transactions 
during 2004, 2005, or 2006, the amount includible in 
gross income by reason of the amendments made by 
this section shall not exceed the applicable percentage 
of the amount which would have been so included but 
for this subsection. 
(2) APPLICABLE PERCENTAGE.—For purposes of 
paragraph (1), the applicable percentage shall be as 
follows: 
(A) For 2004, the applicable percentage 
shall be 20 percent. 
(B) For 2005, the applicable percentage 
shall be 20 percent. 
(C) For 2006, the applicable percentage 
shall be 40 percent.
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(e) REVOCATION OF ELECTION TO BE TREATED AS 
DOMESTIC CORPORATION.—If, during the 1-year period be-
ginning on the date of the enactment of this Act, a corpora-
tion for which an election is in effect under section 943(e) 
of the Internal Revenue Code of 1986 revokes such election, 
no gain or loss shall be recognized with respect to property 
treated as transferred under clause (ii) of section 
943(e)(4)(B) of such Code to the extent such property—
(1) was treated as transferred under clause (i) 
thereof, or 
(2) was acquired during a taxable year to which 
such election applies and before May 1, 2003, in the 
ordinary course of its trade or business. 
The Secretary of the Treasury (or such Secretary’s delegate) 
may prescribe such regulations as may be necessary to pre-
vent the abuse of the purposes of this subsection. 
(f) BINDING CONTRACTS.—The amendments made by 
this section shall not apply to any transaction in the ordi-
nary course of a trade or business which occurs pursuant 
to a binding contract—
(1) which is between the taxpayer and a person 
who is not a related person (as defined in section 
943(b)(3) of such Code, as in effect on the day before 
the date of the enactment of this Act), and
251
(2) which is in effect on January 14, 2002, and 
at all times thereafter. 
For purposes of this subsection, a binding contract shall in-
clude a purchase option, renewal option, or replacement op-
tion which is included in such contract and which is en-
forceable against the seller or lessor. 
SEC. 4002. COBRA FEES. 
(a) USE OF MERCHANDISE PROCESSING FEE.—Sec-
tion 13031(f) of the Consolidated Omnibus Budget Rec-
onciliation Act of 1985 (19 U.S.C. 58c(f)) is amended—
(1) in paragraph (1), by aligning subparagraph 
(B) with subparagraph (A); and 
(2) in paragraph (2), by striking ‘‘commercial 
operations’’ and all that follows through ‘‘processing.’’ 
and inserting ‘‘customs revenue functions as defined 
in section 415 of the Homeland Security Act of 2002 
(other than functions performed by the Office of Inter-
national Affairs referred to in section 415(8) of that 
Act), and for automation (including the Automation 
Commercial Environment computer system), and for 
no other purpose. To the extent that funds in the Cus-
toms User Fee Account are insufficient to pay the 
costs of such customs revenue functions, customs du-
ties in an amount equal to the amount of such insuf-
ficiency shall be available, to the extent provided for