188
SEC. 8224. GAO STUDY OF PRACTICES EMPLOYED BY STATE 
AND LOCAL GOVERNMENTS IN ALLOCATING 
AND UTILIZING TAX INCENTIVES PROVIDED 
PURSUANT 
TO 
THE 
GULF 
OPPORTUNITY 
ZONE ACT OF 2005. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of the practices em-
ployed by State and local governments, and subdivisions 
thereof, in allocating and utilizing tax incentives provided 
pursuant to the Gulf Opportunity Zone Act of 2005 and 
this Act. 
(b) SUBMISSION OF REPORT.—Not later than one year 
after the date of the enactment of this Act, the Comptroller 
General shall submit a report on the findings of the study 
conducted under subsection (a) and shall include therein 
recommendations (if any) relating to such findings. The re-
port shall be submitted to the Committee on Ways and 
Means of the House of Representatives and the Committee 
on Finance of the Senate. 
(c) CONGRESSIONAL HEARINGS.—In the case that the 
report submitted under this section includes findings of sig-
nificant fraud, waste or abuse, each Committee specified in 
subsection (b) shall, within 60 days after the date the report 
is submitted under subsection (b), hold a public hearing to 
review such findings.
189
Subpart C—Subchapter S Provisions 
SEC. 8231. CAPITAL GAIN OF S CORPORATION NOT TREAT-
ED AS PASSIVE INVESTMENT INCOME. 
(a) IN GENERAL.—Section 1362(d)(3) is amended by 
striking subparagraphs (B), (C), (D), (E), and (F) and in-
serting the following new subparagraphs: 
‘‘(B) GROSS RECEIPTS FROM THE SALES OF 
CERTAIN ASSETS.—For purposes of this para-
graph—
‘‘(i) in the case of dispositions of cap-
ital assets (other than stock and securities), 
gross receipts from such dispositions shall be 
taken into account only to the extent of the 
capital gain net income therefrom, and 
‘‘(ii) in the case of sales or exchanges 
of stock or securities, gross receipts shall be 
taken into account only to the extent of the 
gains therefrom. 
‘‘(C) PASSIVE
INVESTMENT
INCOME
DE-
FINED.—
‘‘(i) IN GENERAL.—Except as otherwise 
provided in this subparagraph, the term 
‘passive investment income’ means gross re-
ceipts derived from royalties, rents, divi-
dends, interest, and annuities.
190
‘‘(ii) EXCEPTION
FOR
INTEREST
ON 
NOTES
FROM
SALES
OF
INVENTORY.—The 
term ‘passive investment income’ shall not 
include interest on any obligation acquired 
in the ordinary course of the corporation’s 
trade or business from its sale of property 
described in section 1221(a)(1). 
‘‘(iii) TREATMENT OF CERTAIN LEND-
ING OR FINANCE COMPANIES.—If the S cor-
poration meets the requirements of section 
542(c)(6) for the taxable year, the term 
‘passive investment income’ shall not in-
clude gross receipts for the taxable year 
which are derived directly from the active 
and regular conduct of a lending or finance 
business (as defined in section 542(d)(1)). 
‘‘(iv) TREATMENT
OF
CERTAIN
DIVI-
DENDS.—If an S corporation holds stock in 
a C corporation meeting the requirements of 
section 1504(a)(2), the term ‘passive invest-
ment income’ shall not include dividends 
from such C corporation to the extent such 
dividends are attributable to the earnings 
and profits of such C corporation derived
191
from the active conduct of a trade or busi-
ness. 
‘‘(v) EXCEPTION FOR BANKS, ETC.—In 
the case of a bank (as defined in section 
581) or a depository institution holding 
company (as defined in section 3(w)(1) of 
the Federal Deposit Insurance Act (12 
U.S.C. 1813(w)(1)), the term ‘passive in-
vestment income’ shall not include—
‘‘(I) interest income earned by 
such bank or company, or 
‘‘(II) dividends on assets required 
to be held by such bank or company, 
including stock in the Federal Reserve 
Bank, the Federal Home Loan Bank, 
or the Federal Agricultural Mortgage 
Bank 
or 
participation 
certificates 
issued by a Federal Intermediate Cred-
it Bank.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act.
192
SEC. 8232. TREATMENT OF BANK DIRECTOR SHARES. 
(a) IN GENERAL.—Section 1361 (defining S corpora-
tion) is amended by adding at the end the following new 
subsection: 
‘‘(f) RESTRICTED BANK DIRECTOR STOCK.—
‘‘(1) IN
GENERAL.—Restricted bank director 
stock shall not be taken into account as outstanding 
stock of the S corporation in applying this subchapter 
(other than section 1368(f)). 
‘‘(2) RESTRICTED BANK DIRECTOR STOCK.—For 
purposes of this subsection, the term ‘restricted bank 
director stock’ means stock in a bank (as defined in 
section 581) or a depository institution holding com-
pany (as defined in section 3(w)(1) of the Federal De-
posit Insurance Act (12 U.S.C. 1813(w)(1)), if such 
stock—
‘‘(A) is required to be held by an individual 
under applicable Federal or State law in order 
to permit such individual to serve as a director, 
and 
‘‘(B) is subject to an agreement with such 
bank or company (or a corporation which con-
trols (within the meaning of section 368(c)) such 
bank or company) pursuant to which the holder 
is required to sell back such stock (at the same
193
price as the individual acquired such stock) upon 
ceasing to hold the office of director. 
‘‘(3) CROSS REFERENCE.—
‘‘For treatment of certain distributions with respect to restricted bank director 
stock, see section 1368(f).’’.
(b) DISTRIBUTIONS.—Section 1368 (relating to dis-
tributions) is amended by adding at the end the following 
new subsection: 
‘‘(f) RESTRICTED BANK DIRECTOR STOCK.—If a di-
rector receives a distribution (not in part or full payment 
in exchange for stock) from an S corporation with respect 
to any restricted bank director stock (as defined in section 
1361(f)), the amount of such distribution—
‘‘(1) shall be includible in gross income of the di-
rector, and 
‘‘(2) shall be deductible by the corporation for the 
taxable year of such corporation in which or with 
which ends the taxable year in which such amount in 
included in the gross income of the director.’’. 
(c) EFFECTIVE DATES.—
(1) IN
GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2006. 
(2) SPECIAL RULE FOR TREATMENT AS SECOND 
CLASS OF STOCK.—In the case of any taxable year be-
ginning after December 31, 1996, restricted bank di-
194
rector stock (as defined in section 1361(f) of the Inter-
nal Revenue Code of 1986, as added by this section) 
shall not be taken into account in determining wheth-
er an S corporation has more than 1 class of stock. 
SEC. 8233. SPECIAL RULE FOR BANK REQUIRED TO CHANGE 
FROM THE RESERVE METHOD OF ACCOUNT-
ING ON BECOMING S CORPORATION. 
(a) IN GENERAL.—Section 1361, as amended by this 
Act, is amended by adding at the end the following new 
subsection: 
‘‘(g) SPECIAL RULE FOR BANK REQUIRED TO CHANGE 
FROM THE RESERVE METHOD OF ACCOUNTING ON BECOM-
ING S CORPORATION.—In the case of a bank which changes 
from the reserve method of accounting for bad debts de-
scribed in section 585 or 593 for its first taxable year for 
which an election under section 1362(a) is in effect, the 
bank may elect to take into account any adjustments under 
section 481 by reason of such change for the taxable year 
immediately preceding such first taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2006.
195
SEC. 8234. TREATMENT OF THE SALE OF INTEREST IN A 
QUALIFIED SUBCHAPTER S SUBSIDIARY. 
(a) IN
GENERAL.—Subparagraph (C) of section 
1361(b)(3) (relating to treatment of terminations of quali-
fied subchapter S subsidiary status) is amended—
(1) by striking ‘‘For purposes of this title,’’ and 
inserting the following: 
‘‘(i) IN
GENERAL.—For purposes of 
this title,’’, and 
(2) by inserting at the end the following new 
clause: 
‘‘(ii) TERMINATION
BY
REASON
OF 
SALE OF STOCK.—If the failure to meet the 
requirements of subparagraph (B) is by rea-
son of the sale of stock of a corporation 
which is a qualified subchapter S sub-
sidiary, the sale of such stock shall be treat-
ed as if—
‘‘(I) the sale were a sale of an un-
divided interest in the assets of such 
corporation (based on the percentage of 
the corporation’s stock sold), and 
‘‘(II) the sale were followed by an 
acquisition by such corporation of all 
of its assets (and the assumption by 
such corporation of all of its liabilities)
196
in a transaction to which section 351 
applies.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2006. 
SEC. 8235. ELIMINATION OF ALL EARNINGS AND PROFITS 
ATTRIBUTABLE TO PRE-1983 YEARS FOR CER-
TAIN CORPORATIONS. 
In the case of a corporation which is—
(1) described in section 1311(a)(1) of the Small 
Business Job Protection Act of 1996, and 
(2) not described in section 1311(a)(2) of such 
Act, 
the amount of such corporation’s accumulated earnings and 
profits (for the first taxable year beginning after the date 
of the enactment of this Act) shall be reduced by an amount 
equal to the portion (if any) of such accumulated earnings 
and profits which were accumulated in any taxable year 
beginning before January 1, 1983, for which such corpora-
tion was an electing small business corporation under sub-
chapter S of the Internal Revenue Code of 1986.
197
SEC. 8236. DEDUCTIBILITY OF INTEREST EXPENSE ON IN-
DEBTEDNESS INCURRED BY AN ELECTING 
SMALL BUSINESS TRUST TO ACQUIRE S COR-
PORATION STOCK. 
(a) IN
GENERAL.—Subparagraph (C) of section 
641(c)(2) (relating to modifications) is amended by insert-
ing after clause (iii) the following new clause: 
‘‘(iv) Any interest expense paid or ac-
crued on indebtedness incurred to acquire 
stock in an S corporation.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2006. 
PART 2—REVENUE PROVISIONS 
SEC. 8241. INCREASE IN AGE OF CHILDREN WHOSE UN-
EARNED INCOME IS TAXED AS IF PARENT’S 
INCOME. 
(a) IN
GENERAL.—Subparagraph (A) of section 
1(g)(2) (relating to child to whom subsection applies) is 
amended to read as follows: 
‘‘(A) such child—
‘‘(i) has not attained age 18 before the 
close of the taxable year, or 
‘‘(ii)(I) has attained age 18 before the 
close of the taxable year and meets the age 
requirements of section 152(c)(3) (deter-
198
mined without regard to subparagraph (B) 
thereof), and 
‘‘(II) whose earned income (as defined 
in section 911(d)(2)) for such taxable year 
does not exceed one-half of the amount of the 
individual’s support (within the meaning of 
section 152(c)(1)(D) after the application of 
section 152(f)(5) (without regard to sub-
paragraph (A) thereof)) for such taxable 
year,’’. 
(b) CONFORMING AMENDMENT.—Subsection (g) of sec-
tion 1 is amended by striking ‘‘MINOR’’ in the heading 
thereof. 
(c) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
SEC. 8242. SUSPENSION OF CERTAIN PENALTIES AND IN-
TEREST. 
(a) IN GENERAL.—Paragraphs (1)(A) and (3)(A) of 
section 6404(g) are each amended by striking ‘‘18-month 
period’’ and inserting ‘‘36-month period’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to notices provided by the Secretary of 
the Treasury, or his delegate, after the date which is 6 
months after the date of the enactment of this Act.
199
SEC. 8243. MODIFICATION OF COLLECTION DUE PROCESS 
PROCEDURES FOR EMPLOYMENT TAX LIABIL-
ITIES. 
(a) IN GENERAL.—Section 6330(f) (relating to jeop-
ardy and State refund collection) is amended—
(1) by striking ‘‘; or’’ at the end of paragraph 
(1) and inserting a comma, 
(2) by adding ‘‘or’’ at the end of paragraph (2), 
and 
(3) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) the Secretary has served a disqualified em-
ployment tax levy,’’. 
(b) DISQUALIFIED EMPLOYMENT TAX LEVY.—Section 
6330 of such Code (relating to notice and opportunity for 
hearing before levy) is amended by adding at the end the 
following new subsection: 
‘‘(h) DISQUALIFIED EMPLOYMENT TAX LEVY.—For 
purposes of subsection (f), a disqualified employment tax 
levy is any levy in connection with the collection of employ-
ment taxes for any taxable period if the person subject to 
the levy (or any predecessor thereof) requested a hearing 
under this section with respect to unpaid employment taxes 
arising in the most recent 2-year period before the begin-
ning of the taxable period with respect to which the levy 
is served. For purposes of the preceding sentence, the term
200
‘employment taxes’ means any taxes under chapter 21, 22, 
23, or 24.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to levies served on or after the date that 
is 120 days after the date of the enactment of this Act. 
SEC. 8244. PERMANENT EXTENSION OF IRS USER FEES. 
Section 7528 (relating to Internal Revenue Service 
user fees) is amended by striking subsection (c). 
SEC. 8245. INCREASE IN PENALTY FOR BAD CHECKS AND 
MONEY ORDERS. 
(a) IN GENERAL.—Section 6657 (relating to bad 
checks) is amended—
(1) by striking ‘‘$750’’ and inserting ‘‘$1,250’’, 
and 
(2) by striking ‘‘$15’’ and inserting ‘‘$25’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section apply to checks or money orders received after the 
date of the enactment of this Act. 
SEC. 8246. UNDERSTATEMENT OF TAXPAYER LIABILITY BY 
RETURN PREPARERS. 
(a) APPLICATION OF RETURN PREPARER PENALTIES 
TO ALL TAX RETURNS.—
(1) DEFINITION OF TAX RETURN PREPARER.—
Paragraph (36) of section 7701(a) (relating to income 
tax preparer) is amended—
201
(A) by striking ‘‘income’’ each place it ap-
pears in the heading and the text, and 
(B) in subparagraph (A), by striking ‘‘sub-
title A’’ each place it appears and inserting ‘‘this 
title’’. 
(2) CONFORMING AMENDMENTS.—
(A)(i) Section 6060 is amended by striking 
‘‘INCOME TAX RETURN PREPARERS’’ in the 
heading and inserting ‘‘TAX
RETURN
PRE-
PARERS’’. 
(ii) Section 6060(a) is amended—
(I) by striking ‘‘an income tax return 
preparer’’ each place it appears and insert-
ing ‘‘a tax return preparer’’, 
(II) by striking ‘‘each income tax re-
turn preparer’’ and inserting ‘‘each tax re-
turn preparer’’, and 
(III) by striking ‘‘another income tax 
return preparer’’ and inserting ‘‘another 
tax return preparer’’. 
(iii) The item relating to section 6060 in 
the table of sections for subpart F of part III of 
subchapter A of chapter 61 is amended by strik-
ing ‘‘income tax return preparers’’ and inserting 
‘‘tax return preparers’’.
202
(iv) Subpart F of part III of subchapter A 
of chapter 61 is amended by striking ‘‘Income 
Tax Return Preparers’’ in the heading and 
inserting ‘‘Tax Return Preparers’’. 
(v) The item relating to subpart F in the 
table of subparts for part III of subchapter A of 
chapter 61 is amended by striking ‘‘income tax 
return preparers’’ and inserting ‘‘tax return pre-
parers’’. 
(B) Section 6103(k)(5) is amended—
(i) by striking ‘‘income tax return pre-
parer’’ each place it appears and inserting 
‘‘tax return preparer’’, and 
(ii) by striking ‘‘income tax return 
preparers’’ each place it appears and insert-
ing ‘‘tax return preparers’’. 
(C)(i) Section 6107 is amended—
(I) by striking ‘‘INCOME
TAX
RE-
TURN PREPARER’’ in the heading and in-
serting ‘‘TAX RETURN PREPARER’’, 
(II) by striking ‘‘an income tax return 
preparer’’ each place it appears in sub-
sections (a) and (b) and inserting ‘‘a tax re-
turn preparer’’,
203
(III) by striking ‘‘INCOME TAX RE-
TURN PREPARER’’ in the heading for sub-
section (b) and inserting ‘‘TAX RETURN 
PREPARER’’, and 
(IV) in subsection (c), by striking ‘‘in-
come tax return preparers’’ and inserting 
‘‘tax return preparers’’. 
(ii) The item relating to section 6107 in the 
table of sections for subchapter B of chapter 61 
is amended by striking ‘‘Income tax return pre-
parer’’ and inserting ‘‘Tax return preparer’’. 
(D) Section 6109(a)(4) is amended—
(i) by striking ‘‘an income tax return 
preparer’’ and inserting ‘‘a tax return pre-
parer’’, and 
(ii) by striking ‘‘INCOME RETURN PRE-
PARER’’ in the heading and inserting ‘‘TAX 
RETURN PREPARER’’. 
(E) Section 6503(k)(4) is amended by strik-
ing ‘‘Income tax return preparers’’ and inserting 
‘‘Tax return preparers’’. 
(F)(i) Section 6694 is amended—
(I) by striking ‘‘INCOME
TAX
RE-
TURN PREPARER’’ in the heading and in-
serting ‘‘TAX RETURN PREPARER’’,
204
(II) by striking ‘‘an income tax return 
preparer’’ each place it appears and insert-
ing ‘‘a tax return preparer’’, 
(III) in subsection (c)(2), by striking 
‘‘the income tax return preparer’’ and in-
serting ‘‘the tax return preparer’’, 
(IV) in subsection (e), by striking 
‘‘subtitle A’’ and inserting ‘‘this title’’, and 
(V) in subsection (f), by striking ‘‘in-
come tax return preparer’’ and inserting 
‘‘tax return preparer’’. 
(ii) The item relating to section 6694 in the 
table of sections for part I of subchapter B of 
chapter 68 is amended by striking ‘‘income tax 
return preparer’’ and inserting ‘‘tax return pre-
parer’’. 
(G)(i) Section 6695 is amended—
(I) by striking ‘‘INCOME’’ in the head-
ing, and 
(II) by striking ‘‘an income tax return 
preparer’’ each place it appears and insert-
ing ‘‘a tax return preparer’’. 
(ii) Section 6695(f) is amended—
(I) by striking ‘‘subtitle A’’ and insert-
ing ‘‘this title’’, and
205
(II) by striking ‘‘the income tax return 
preparer’’ and inserting ‘‘the tax return 
preparer’’. 
(iii) The item relating to section 6695 in 
the table of sections for part I of subchapter B 
of chapter 68 is amended by striking ‘‘income’’. 
(H) Section 6696(e) is amended by striking 
‘‘subtitle A’’ each place it appears and inserting 
‘‘this title’’. 
(I)(i) Section 7407 is amended—
(I) by striking ‘‘INCOME
TAX
RE-
TURN PREPARERS’’ in the heading and 
inserting ‘‘TAX RETURN PREPARERS’’, 
(II) by striking ‘‘an income tax return 
preparer’’ each place it appears and insert-
ing ‘‘a tax return preparer’’, 
(III) by striking ‘‘income tax pre-
parer’’ both places it appears in subsection 
(a) and inserting ‘‘tax return preparer’’, 
and 
(IV) by striking ‘‘income tax return’’ 
in subsection (a) and inserting ‘‘tax re-
turn’’. 
(ii) The item relating to section 7407 in the 
table of sections for subchapter A of chapter 76
206
is amended by striking ‘‘income tax return pre-
parers’’ and inserting ‘‘tax return preparers’’. 
(J)(i) Section 7427 is amended—
(I) by striking ‘‘INCOME
TAX
RE-
TURN PREPARERS’’ in the heading and 
inserting ‘‘TAX
RETURN
PREPARERS’’, 
and 
(II) by striking ‘‘an income tax return 
preparer’’ and inserting ‘‘a tax return pre-
parer’’. 
(ii) The item relating to section 7427 in the 
table of sections for subchapter B of chapter 76 
is amended to read as follows:
‘‘Sec. 7427. Tax return preparers.’’.
(b) MODIFICATION OF PENALTY FOR UNDERSTATE-
MENT OF TAXPAYER’S LIABILITY BY TAX RETURN PRE-
PARER.—Subsections (a) and (b) of section 6694 are 
amended to read as follows: 
‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE PO-
SITIONS.—
‘‘(1) IN
GENERAL.—Any tax return preparer 
who prepares any return or claim for refund with re-
spect to which any part of an understatement of li-
ability is due to a position described in paragraph 
(2) shall pay a penalty with respect to each such re-
turn or claim in an amount equal to the greater of—
207
‘‘(A) $1,000, or 
‘‘(B) 50 percent of the income derived (or to 
be derived) by the tax return preparer with re-
spect to the return or claim. 
‘‘(2) UNREASONABLE POSITION.—A position is 
described in this paragraph if—
‘‘(A) the tax return preparer knew (or rea-
sonably should have known) of the position, 
‘‘(B) there was not a reasonable belief that 
the position would more likely than not be sus-
tained on its merits, and 
‘‘(C)(i) the position was not disclosed as 
provided in section 6662(d)(2)(B)(ii), or 
‘‘(ii) there was no reasonable basis for the 
position. 
‘‘(3) REASONABLE CAUSE EXCEPTION.—No pen-
alty shall be imposed under this subsection if it is 
shown that there is reasonable cause for the under-
statement and the tax return preparer acted in good 
faith. 
‘‘(b) UNDERSTATEMENT DUE TO WILLFUL OR RECK-
LESS CONDUCT.—
‘‘(1) IN
GENERAL.—Any tax return preparer 
who prepares any return or claim for refund with re-
spect to which any part of an understatement of li-
208
ability is due to a conduct described in paragraph (2) 
shall pay a penalty with respect to each such return 
or claim in an amount equal to the greater of—
‘‘(A) $5,000, or 
‘‘(B) 50 percent of the income derived (or to 
be derived) by the tax return preparer with re-
spect to the return or claim. 
‘‘(2) WILLFUL
OR
RECKLESS
CONDUCT.—Con-
duct described in this paragraph is conduct by the tax 
return preparer which is—
‘‘(A) a willful attempt in any manner to 
understate the liability for tax on the return or 
claim, or 
‘‘(B) a reckless or intentional disregard of 
rules or regulations. 
‘‘(3) REDUCTION IN PENALTY.—The amount of 
any penalty payable by any person by reason of this 
subsection for any return or claim for refund shall be 
reduced by the amount of the penalty paid by such 
person by reason of subsection (a).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to returns prepared after the date of the 
enactment of this Act.
209
SEC. 8247. PENALTY FOR FILING ERRONEOUS REFUND 
CLAIMS. 
(a) IN GENERAL.—Part I of subchapter B of chapter 
68 (relating to assessable penalties) is amended by inserting 
after section 6675 the following new section: 
‘‘SEC. 6676. ERRONEOUS CLAIM FOR REFUND OR CREDIT. 
‘‘(a) CIVIL PENALTY.—If a claim for refund or credit 
with respect to income tax (other than a claim for a refund 
or credit relating to the earned income credit under section 
32) is made for an excessive amount, unless it is shown 
that the claim for such excessive amount has a reasonable 
basis, the person making such claim shall be liable for a 
penalty in an amount equal to 20 percent of the excessive 
amount. 
‘‘(b) EXCESSIVE AMOUNT.—For purposes of this sec-
tion, the term ‘excessive amount’ means in the case of any 
person the amount by which the amount of the claim for 
refund or credit for any taxable year exceeds the amount 
of such claim allowable under this title for such taxable 
year. 
‘‘(c) COORDINATION WITH OTHER PENALTIES.—This 
section shall not apply to any portion of the excessive 
amount of a claim for refund or credit which is subject to 
a penalty imposed under part II of subchapter A of chapter 
68.’’.
210
(b) CONFORMING AMENDMENT.—The table of sections 
for part I of subchapter B of chapter 68 is amended by 
inserting after the item relating to section 6675 the fol-
lowing new item:
‘‘Sec. 6676. Erroneous claim for refund or credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to any claim filed or submitted after 
the date of the enactment of this Act. 
SEC. 8248. TIME FOR PAYMENT OF CORPORATE ESTIMATED 
TAXES. 
Subparagraph (B) of section 401(1) of the Tax In-
crease Prevention and Reconciliation Act of 2005 is amend-
ed by striking ‘‘106.25 percent’’ and inserting ‘‘114.25 per-
cent’’. 
Subtitle C—Small Business 
Incentives 
SEC. 8301. SHORT TITLE. 
This subtitle may be cited as the ‘‘Small Business and 
Work Opportunity Act of 2007’’. 
SEC. 8302. ENHANCED COMPLIANCE ASSISTANCE FOR 
SMALL BUSINESSES. 
(a) IN GENERAL.—Section 212 of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601 
note) is amended by striking subsection (a) and inserting 
the following: 
‘‘(a) COMPLIANCE GUIDE.—
211
‘‘(1) IN GENERAL.—For each rule or group of re-
lated rules for which an agency is required to prepare 
a final regulatory flexibility analysis under section 
605(b) of title 5, United States Code, the agency shall 
publish 1 or more guides to assist small entities in 
complying with the rule and shall entitle such publi-
cations ‘small entity compliance guides’. 
‘‘(2) PUBLICATION OF GUIDES.—The publication 
of each guide under this subsection shall include—
‘‘(A) the posting of the guide in an easily 
identified location on the website of the agency; 
and 
‘‘(B) distribution of the guide to known in-
dustry contacts, such as small entities, associa-
tions, or industry leaders affected by the rule. 
‘‘(3) PUBLICATION DATE.—An agency shall pub-
lish each guide (including the posting and distribu-
tion of the guide as described under paragraph (2))—
‘‘(A) on the same date as the date of publi-
cation of the final rule (or as soon as possible 
after that date); and 
‘‘(B) not later than the date on which the 
requirements of that rule become effective. 
‘‘(4) COMPLIANCE ACTIONS.—