I 
114TH CONGRESS 
2D SESSION 
H. R. 4936 
To provide assistance to small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 14, 2016 
Mr. WALBERG introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Over-
sight and Government Reform, Small Business, Education and the Work-
force, and the Judiciary, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To provide assistance to small businesses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Main Street Jobs and Opportunity Act of 2016’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—DEATH TAX REPEAL 
Sec. 101. Repeal of estate and generation-skipping transfer taxes. 
Sec. 102. Modifications of gift tax. 
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TITLE II—SMALL BUSINESS PAPERWORK RELIEF 
Sec. 201. Suspension of fines for first-time paperwork violations by small busi-
ness concerns. 
TITLE III—OCCUPATIONAL LICENSING 
Sec. 301. Sense of Congress regarding occupational licensing. 
Sec. 302. Study on effects of certain occupational licensing requirements. 
TITLE IV—RESTORE TRADITIONAL DEFINITION OF FULL-TIME 
EMPLOYMENT 
Sec. 401. Repeal of 30-hour threshold for classification as full-time employee 
for purposes of the employer mandate in the Patient Protection 
and Affordable Care Act and replacement with 40 hours. 
TITLE V—SMALL BUSINESS START-UP SAVINGS ACCOUNTS 
Sec. 501. Establishment of Small Business Start-Up Savings Accounts. 
TITLE VI—LIMIT FRIVOLOUS LAWSUITS 
Sec. 601. Attorney accountability. 
TITLE VII—INCREASE IRS ACCOUNTABILITY 
Sec. 701. Modification of standards for awarding of costs and certain fees. 
Sec. 702. Civil damages allowed for reckless or intentional disregard of internal 
revenue laws. 
Sec. 703. Modifications relating to certain offenses by officers and employees 
in connection with revenue laws. 
Sec. 704. Modifications relating to civil damages for unauthorized inspection or 
disclosure of returns and return information. 
Sec. 705. Increase in monetary penalties for certain unauthorized disclosures of 
information. 
TITLE I—DEATH TAX REPEAL 
SEC. 101. REPEAL OF ESTATE AND GENERATION-SKIPPING 
TRANSFER TAXES. 
(a) ESTATE TAX REPEAL.—Subchapter C of chapter 
11 of subtitle B of the Internal Revenue Code of 1986 
is amended by adding at the end the following new section: 
‘‘SEC. 2210. TERMINATION. 
‘‘(a) IN GENERAL.—Except as provided in subsection 
(b), this chapter shall not apply to the estates of decedents 
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dying on or after the date of the enactment of the Main 
Street Jobs and Opportunity Act of 2016. 
‘‘(b) CERTAIN DISTRIBUTIONS FROM QUALIFIED 
DOMESTIC TRUSTS.—In applying section 2056A with re-
spect to the surviving spouse of a decedent dying before 
the date of the enactment of the Main Street Jobs and 
Opportunity Act of 2016— 
‘‘(1) section 2056A(b)(1)(A) shall not apply to 
distributions made after the 10-year period begin-
ning on such date, and 
‘‘(2) section 2056A(b)(1)(B) shall not apply on 
or after such date.’’. 
(b) GENERATION-SKIPPING
TRANSFER
TAX
RE-
PEAL.—Subchapter G of chapter 13 of subtitle B of such 
Code is amended by adding at the end the following new 
section: 
‘‘SEC. 2664. TERMINATION. 
‘‘This chapter shall not apply to generation-skipping 
transfers on or after the date of the enactment of the Main 
Street Jobs and Opportunity Act of 2016.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) The table of sections for subchapter C of 
chapter 11 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 2210. Termination.’’. 
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(2) The table of sections for subchapter G of 
chapter 13 of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 2664. Termination.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to the estates of decedents dying, 
and generation-skipping transfers, on or after the date of 
the enactment of this Act. 
SEC. 102. MODIFICATIONS OF GIFT TAX. 
(a) COMPUTATION OF GIFT TAX.—Subsection (a) of 
section 2502 of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(a) COMPUTATION OF TAX.— 
‘‘(1) IN GENERAL.—The tax imposed by section 
2501 for each calendar year shall be an amount 
equal to the excess of— 
‘‘(A) a tentative tax, computed under para-
graph (2), on the aggregate sum of the taxable 
gifts for such calendar year and for each of the 
preceding calendar periods, over 
‘‘(B) a tentative tax, computed under para-
graph (2), on the aggregate sum of the taxable 
gifts for each of the preceding calendar periods. 
‘‘(2) RATE SCHEDULE.— 
‘‘If the amount with respect to which the 
tentative tax to be computed is:.
The tentative tax 
is: 
Not over $10,000 ...........................................................
18% of such amount. 
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Over $10,000 but not over $20,000 ..............................
$1,800, plus 20% of 
the excess over 
$10,000. 
Over $20,000 but not over $40,000 ..............................
$3,800, plus 22% of 
the excess over 
$20,000. 
Over $40,000 but not over $60,000 ..............................
$8,200, plus 24% of 
the excess over 
$40,000. 
Over $60,000 but not over $80,000 ..............................
$13,000, plus 26% of 
the excess over 
$60,000. 
Over $80,000 but not over $100,000 ............................
$18,200, plus 28% of 
the excess over 
$80,000. 
Over $100,000 but not over $150,000 ..........................
$23,800, plus 30% of 
the excess over 
$100,000. 
Over $150,000 but not over $250,000 ..........................
$38,800, plus 32% of 
the excess of 
$150,000. 
Over $250,000 but not over $500,000 ..........................
$70,800, plus 34% of 
the excess over 
$250,000. 
Over $500,000 ...............................................................
$155,800, plus 35% of 
the excess of 
$500,000.’’. 
(b) TREATMENT
OF
CERTAIN
TRANSFERS
IN 
TRUST.—Section 2511 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection: 
‘‘(c) TREATMENT
OF
CERTAIN
TRANSFERS
IN 
TRUST.—Notwithstanding any other provision of this sec-
tion and except as provided in regulations, a transfer in 
trust shall be treated as a taxable gift under section 2503, 
unless the trust is treated as wholly owned by the donor 
or the donor’s spouse under subpart E of part I of sub-
chapter J of chapter 1.’’. 
(c) LIFETIME GIFT EXEMPTION.— 
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(1) IN
GENERAL.—Paragraph (1) of section 
2505(a) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(1) the amount of the tentative tax which 
would be determined under the rate schedule set 
forth in section 2502(a)(2) if the amount with re-
spect to which such tentative tax is to be computed 
were $5,000,000, reduced by’’. 
(2) INFLATION ADJUSTMENT.—Section 2505 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year after 2011, the dollar amount in subsection 
(a)(1) shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year by substituting ‘calendar year 2010’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under paragraph (1) is not a multiple of $10,000, 
such amount shall be rounded to the nearest mul-
tiple of $10,000.’’. 
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(d) CONFORMING AMENDMENTS.— 
(1) The heading for section 2505 of such Code 
is amended by striking ‘‘UNIFIED’’. 
(2) The item in the table of sections for sub-
chapter A of chapter 12 of such Code relating to 
section 2505 is amended to read as follows: 
‘‘Sec. 2505. Credit against gift tax.’’. 
(3) Section 2801(a)(1) of such Code is amended 
by striking ‘‘section 2001(c) as in effect on the date 
of such receipt’’ and inserting ‘‘section 2502(a)(2)’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to gifts made on or after the date 
of the enactment of this Act. 
(f) TRANSITION RULE.— 
(1) IN
GENERAL.—For purposes of applying 
sections 1015(d), 2502, and 2505 of the Internal 
Revenue Code of 1986, the calendar year in which 
this Act is enacted shall be treated as 2 separate cal-
endar years one of which ends on the day before the 
date of the enactment of this Act and the other of 
which begins on such date of enactment. 
(2) APPLICATION
OF
SECTION 2504(b).—For 
purposes of applying section 2504(b) of the Internal 
Revenue Code of 1986, the calendar year in which 
this Act is enacted shall be treated as one preceding 
calendar period. 
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TITLE II—SMALL BUSINESS 
PAPERWORK RELIEF 
SEC. 201. SUSPENSION OF FINES FOR FIRST-TIME PAPER-
WORK VIOLATIONS BY SMALL BUSINESS CON-
CERNS. 
Section 3506 of title 44, United States Code (com-
monly referred to as the ‘‘Paperwork Reduction Act’’), is 
amended by adding at the end the following: 
‘‘(j) SMALL BUSINESSES.— 
‘‘(1) SMALL BUSINESS CONCERN.—In this sub-
section, the term ‘small business concern’ has the 
meaning given that term under section 3 of the 
Small Business Act (15 U.S.C. 632). 
‘‘(2) IN GENERAL.—In the case of a first-time 
violation by a small business concern of a require-
ment regarding the collection of information by an 
agency, the head of the agency shall not impose a 
civil fine on the small business concern unless the 
head of the agency determines that— 
‘‘(A) the violation has the potential to 
cause serious harm to the public interest; 
‘‘(B) failure to impose a civil fine would 
impede or interfere with the detection of crimi-
nal activity; 
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‘‘(C) the violation is a violation of an inter-
nal revenue law or a law concerning the assess-
ment or collection of any tax, debt, revenue, or 
receipt; 
‘‘(D) the violation was not corrected on or 
before the date that is 6 months after the date 
on which the small business concern receives 
notification of the violation in writing from the 
agency; or 
‘‘(E) except as provided in paragraph (3), 
the violation presents a danger to the public 
health or safety. 
‘‘(3) DANGER TO PUBLIC HEALTH OR SAFE-
TY.— 
‘‘(A) IN GENERAL.—In any case in which 
the head of an agency determines under para-
graph (2)(E) that a violation presents a danger 
to the public health or safety, the head of the 
agency may, notwithstanding paragraph (2)(E), 
determine not to impose a civil fine on the 
small business concern if the violation is cor-
rected not later than 24 hours after receipt by 
the owner of the small business concern of noti-
fication of the violation in writing. 
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‘‘(B) CONSIDERATIONS.—In determining 
whether to allow a small business concern 24 
hours to correct a violation under subparagraph 
(A), the head of an agency shall take into ac-
count all of the facts and circumstances regard-
ing the violation, including— 
‘‘(i) the nature and seriousness of the 
violation, including whether the violation is 
technical or inadvertent or involves willful 
or criminal conduct; 
‘‘(ii) whether the small business con-
cern has made a good faith effort to com-
ply with applicable laws and to remedy the 
violation within the shortest practicable pe-
riod of time; and 
‘‘(iii) whether the small business con-
cern has obtained a significant economic 
benefit from the violation. 
‘‘(C) NOTICE TO CONGRESS.—In any case 
in which the head of an agency imposes a civil 
fine on a small business concern for a violation 
that presents a danger to the public health or 
safety and does not allow the small business 
concern 24 hours to correct the violation under 
subparagraph (A), the head of the agency shall 
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notify Congress regarding the determination 
not later than 60 days after the date on which 
the civil fine is imposed by the agency. 
‘‘(4) LIMITED TO FIRST-TIME VIOLATIONS.— 
‘‘(A) IN GENERAL.—This subsection shall 
not apply to any violation by a small business 
concern of a requirement regarding collection of 
information by an agency if the small business 
concern previously violated any requirement re-
garding collection of information by the agency. 
‘‘(B) OTHER AGENCIES.—For purposes of 
making a determination under subparagraph 
(A), the head of an agency shall not take into 
account any violation of a requirement regard-
ing collection of information by another agen-
cy.’’. 
TITLE III—OCCUPATIONAL 
LICENSING 
SEC. 301. SENSE OF CONGRESS REGARDING OCCUPA-
TIONAL LICENSING. 
It is the sense of Congress that— 
(1) the Department of Labor should act within 
its existing authority to reduce employment barriers 
created by certain occupational licensing require-
ments, including providing technical assistance and 
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disseminating guidance and information on best 
practices to States interested in increasing economic 
opportunity through licensing reciprocity agreements 
or other approaches; and 
(2) that States should form interstate compacts 
to make it easier for licensed workers to practice 
and relocate across State lines, while also enabling 
State regulators to share practitioners’ performance 
histories. 
SEC. 302. STUDY ON EFFECTS OF CERTAIN OCCUPATIONAL 
LICENSING REQUIREMENTS. 
(a) STUDY.—The Secretary of Labor shall conduct 
a study on the effects of occupational licensing require-
ments to determine how such requirements may— 
(1) affect the service quality of certain occupa-
tions; 
(2) affect public safety; and 
(3) impose barriers to entry for establishing 
small businesses, inhibit competition, increase costs 
to consumers, limit hiring, or negatively impact cer-
tain populations. 
(b) REPORT.—Not later than 180 days after the date 
of enactment of this Act, the Secretary shall transmit a 
report to Congress detailing the results of the study re-
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quired by subsection (a), including any recommendation 
for legislation. 
TITLE 
IV—RESTORE 
TRADI-
TIONAL DEFINITION OF FULL- 
TIME EMPLOYMENT 
SEC. 401. REPEAL OF 30-HOUR THRESHOLD FOR CLASSI-
FICATION AS FULL-TIME EMPLOYEE FOR 
PURPOSES OF THE EMPLOYER MANDATE IN 
THE PATIENT PROTECTION AND AFFORD-
ABLE CARE ACT AND REPLACEMENT WITH 40 
HOURS. 
(a) FULL-TIME EQUIVALENTS.—Paragraph (2) of 
section 4980H(c) of the Internal Revenue Code of 1986 
is amended— 
(1) by repealing subparagraph (E), and 
(2) by inserting after subparagraph (D) the fol-
lowing new subparagraph: 
‘‘(E) FULL-TIME EQUIVALENTS TREATED 
AS
FULL-TIME
EMPLOYEES.—Solely for pur-
poses of determining whether an employer is an 
applicable large employer under this paragraph, 
an employer shall, in addition to the number of 
full-time employees for any month otherwise de-
termined, include for such month a number of 
full-time employees determined by dividing the 
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aggregate number of hours of service of employ-
ees who are not full-time employees for the 
month by 174.’’. 
(b) FULL-TIME EMPLOYEES.—Paragraph (4) of sec-
tion 4980H(c) of the Internal Revenue Code of 1986 is 
amended— 
(1) by repealing subparagraph (A), and 
(2) by inserting before subparagraph (B) the 
following new subparagraph: 
‘‘(A) IN
GENERAL.—The term ‘full-time 
employee’ means, with respect to any month, an 
employee who is employed on average at least 
40 hours of service per week.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2013. 
TITLE V—SMALL BUSINESS 
START-UP SAVINGS ACCOUNTS 
SEC. 501. ESTABLISHMENT OF SMALL BUSINESS START-UP 
SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new section: 
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‘‘SEC. 7529. SMALL BUSINESS START-UP SAVINGS AC-
COUNTS. 
‘‘(a) IN GENERAL.—An individual or an eligible small 
business may enter into an agreement with the Secretary 
to establish a small business start-up savings account. 
‘‘(b) SMALL BUSINESS START-UP SAVINGS AC-
COUNT.—For purposes of this section, the term ‘small 
business start-up savings account’ means a trust created 
or organized in the United States for the benefit of the 
account beneficiary, but only if the written governing in-
strument creating the trust meets the following require-
ments: 
‘‘(1) Except as provided in subsection (d)(3) in 
the case of a rollover contribution, no contribution 
will be accepted unless it is in cash, and contribu-
tions will not be accepted for the taxable year on be-
half of any account beneficiary in excess of the 
amount in effect for such taxable year under sub-
section (d)(2). 
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n)) or such other person who demonstrates 
to the satisfaction of the Secretary that the manner 
in which such other person will administer the trust 
will be consistent with the requirements of this sec-
tion. 
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‘‘(3) No part of the trust funds will be invested 
in life insurance contracts. 
‘‘(4) The interest of an individual in the bal-
ance of his account is nonforfeitable. 
‘‘(5) The assets of the trust will not be commin-
gled with other property except in a common trust 
fund or common investment fund. 
‘‘(c) ELIGIBLE SMALL BUSINESS.—For purposes of 
this section, the term ‘eligible small business’ means, with 
respect to any taxable year, any person engaged in a trade 
or business if the average number of employees employed 
by such person on business days during the taxable year 
was 500 or fewer. 
‘‘(d) TREATMENT OF CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—There shall be allowed as a 
deduction for the taxable year an amount equal to 
so much of the account beneficiary’s contributions 
for the taxable year to all small business start-up 
savings accounts maintained for the benefit of such 
beneficiary as do not exceed the contribution limita-
tions in effect for the taxable year under paragraph 
(2). 
‘‘(2) CONTRIBUTION LIMITATION.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a deduction under paragraph (1) with re-
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spect to all small business start-up savings ac-
counts maintained for the benefit of any person 
shall not exceed the lesser of— 
‘‘(i) $10,000, or 
‘‘(ii) $150,000, reduced by the aggre-
gate contributions by such person for all 
taxable years with respect to all small busi-
ness start-up savings accounts of the tax-
payer. 
‘‘(B) COST OF LIVING ADJUSTMENT.— 
‘‘(i) IN GENERAL.—In the case of a 
taxable year beginning after 2016, the 
$10,000 amount in subparagraph (A) shall 
be increased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which the tax-
able year begins, determined by sub-
stituting ‘calendar year 2015’ for ‘cal-
endar year 1992’ in subparagraph (B) 
thereof. 
‘‘(ii) ROUNDING.—If any amount as 
adjusted under clause (i) is not a multiple 
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of $500, such amount shall be rounded to 
the next lowest multiple of $500. 
‘‘(3) ROLLOVERS
FROM
RETIREMENT
PLANS 
NOT
ALLOWED.—Under regulations prescribed by 
the Secretary, a person may make a rollover con-
tribution to a small business start-up savings ac-
count only in the case of a rollover from another 
small business start-up savings account. 
‘‘(4) TREATED
AS
DEDUCTION
FOR
INDIVID-
UALS AND CORPORATIONS.—For purposes of chapter 
1, the deduction allowed under paragraph (1) shall 
be treated as a deduction specified in part VI of sub-
chapter B of chapter 1 (relating to itemized deduc-
tions for individuals and corporations). 
‘‘(e) TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) TAX TREATMENT.— 
‘‘(A) EXCLUSION OF QUALIFIED DISTRIBU-
TIONS.—Any qualified distribution from a small 
business start-up savings account shall not be 
includible in gross income. 
‘‘(B) INCLUSION
OF
OTHER
DISTRIBU-
TIONS.—Any distribution from a small business 
start-up savings account which is not a quali-
fied distribution shall be included in gross in-
come. 
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‘‘(2) QUALIFIED DISTRIBUTION.—For purposes 
of this subsection, the term ‘qualified distribution’ 
means, with respect to any taxable year, any pay-
ment or distribution from a small business start-up 
savings account— 
‘‘(A) to the extent the amount of such pay-
ment or distribution does not exceed the sum 
of— 
‘‘(i) the aggregate amounts paid or in-
curred by the taxpayer for such taxable 
year with respect to the taxpayer’s trade or 
business for the purchase of equipment or 
facilities, marketing, training, incorpora-
tion, and accounting fees, and 
‘‘(ii) the aggregate capital contribu-
tions of the taxpayer with respect to an eli-
gible small business for the taxable year 
(but only to the extent such amounts are 
used by such small business for purposes 
described in clause (i)), and 
‘‘(B) which, in the case of a payment or 
distribution subsequent to the first payment or 
distribution from such account (or any prede-
cessor to such account)— 
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‘‘(i) is made not later than the close 
of the 5th taxable year beginning after the 
date of such first payment or distribution, 
and 
‘‘(ii) is made with respect to the same 
eligible small business with respect to 
which such first payment or distribution 
was made. 
‘‘(3) TREATMENT AFTER DEATH OF ACCOUNT 
BENEFICIARY.— 
‘‘(A) IN GENERAL.—If, by reason of the 
death of the account beneficiary, any person ac-
quires the account beneficiary’s interest in a 
small business start-up savings account— 
‘‘(i) such account shall cease to be a 
small business start-up savings account as 
of the date of death, and 
‘‘(ii) an amount equal to the fair mar-
ket value of the assets in such account on 
such date shall be includible— 
‘‘(I) in the case of a person who 
is not the estate of such beneficiary, 
in such person’s gross income for the 
taxable year which includes such date, 
or 
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‘‘(II) in the case of a person who 
is the estate of such beneficiary, in 
such beneficiary’s gross income for 
the last taxable year of such bene-
ficiary. 
‘‘(B) SPECIAL RULES.— 
‘‘(i) REDUCTION OF INCLUSION FOR 
PREDEATH
EXPENSES.—The amount in-
cludible in gross income under subpara-
graph (A) shall be reduced by the amounts 
described in paragraph (2) which were in-
curred by the decedent before the date of 
the decedent’s death and paid by such per-
son within 1 year after such date. 
‘‘(ii) 
DEDUCTION
FOR
ESTATE 
TAXES.—An appropriate deduction shall be 
allowed under section 691(c) to any person 
(other than the decedent) with respect to 
amounts included in gross income under 
subparagraph (A)(ii)(I) by such person. 
‘‘(4) TREATMENT FOR FAILURE TO BE TREAT-
ED AS ELIGIBLE SMALL BUSINESS.—If for any tax-
able year a taxpayer which holds a small business 
start-up savings account as an eligible small busi-
ness ceases to be an eligible small business— 
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‘‘(A) such account shall cease to be a small 
business start-up savings account, and 
‘‘(B) the balance of such account shall be 
treated as paid out for such taxable year in a 
distribution which is not a qualified distribu-
tion. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) DENIAL OF DOUBLE BENEFIT.—Any de-
duction or credit otherwise allowed for the taxable 
year with respect to amounts described in subsection 
(e)(2)(A) shall be reduced by an amount equal to 
the qualified distributions attributable to such 
amounts. The adjusted basis of any property placed 
in service for the taxable year shall be reduced by 
the amount of any qualified distributions attrib-
utable to such property. For purposes of this para-
graph, qualified distributions shall first be treated as 
attributable to amounts described in subsection 
(e)(2)(A), then to property placed in service for the 
taxable year. 
‘‘(2) AGGREGATION
RULE.—For purposes of 
this section, all persons treated as a single employer 
under subsection (a) or (b) of section 52, or sub-
section (m) or (o) of section 414, shall be treated as 
one person.’’. 
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(b) EXCISE TAX ON EXCESS CONTRIBUTIONS AND 
NONQUALIFIED DISTRIBUTIONS.—Subtitle D of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new chapter: 
‘‘CHAPTER 50A—SMALL BUSINESS START- 
UP SAVINGS ACCOUNTS 
‘‘Sec. 5000D. Tax on excess contributions to small business start-up savings 
accounts. 
‘‘Sec. 5000E. Tax on nonqualified distributions from small business start-up 
savings accounts. 
‘‘Sec. 5000F. Cross reference. 
‘‘SEC. 5000D. TAX ON EXCESS CONTRIBUTIONS TO SMALL 
BUSINESS START-UP SAVINGS ACCOUNTS. 
‘‘(a) IN GENERAL.—In the case of a small business 
start-up savings account (within the meaning of section 
7529) there is imposed for each taxable year a tax in an 
amount equal to 6 percent of the amount of the excess 
contributions to such taxpayer’s account (determined as 
of the close of the taxable year). 
‘‘(b) LIMITATION.—The amount of tax imposed by 
subsection (a) shall not exceed 6 percent of the value of 
the account (determined as of the close of the taxable 
year). 
‘‘(c) EXCESS CONTRIBUTIONS.—For purposes of this 
section, in the case of contributions to all small business 
start-up savings accounts maintained for the benefit of a 
person, the term ‘excess contributions’ means the sum 
of— 
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‘‘(1) the excess (if any) of— 
‘‘(A) the amount contributed to such ac-
counts for the taxable year, over 
‘‘(B) the amount allowable as a contribu-
tion under section 7529(d)(2)(A) for such tax-
able year, and 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
‘‘(A) the distributions out of the accounts 
for the taxable year, and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as 
a 
contribution 
under 
section 
7529(d)(2)(A) for such taxable year, over 
‘‘(ii) the amount contributed to such 
accounts for such taxable year. 
‘‘SEC. 5000E. TAX ON NONQUALIFIED DISTRIBUTIONS FROM 
SMALL BUSINESS START-UP SAVINGS AC-
COUNTS. 
‘‘(a) IN GENERAL.—If for any taxable year an 
amount is paid or distributed out of a taxpayer’s small 
business start-up savings account, there is imposed for 
such taxable year a tax in an amount equal to 10 percent 
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of the portion of such amount which is includible in the 
gross income of the taxpayer. 
‘‘(b) EXCEPTION FOR DISABILITY OR DEATH.—Sub-
section (a) shall not apply if the payment or distribution 
is made after the account beneficiary becomes disabled 
within the meaning of section 72(m)(7) (but only if such 
beneficiary’s account was created before becoming so dis-
abled) or dies. 
‘‘SEC. 5000F. CROSS REFERENCE. 
‘‘For prohibited transactions, see section 4975.’’. 
(c) PROHIBITED TRANSACTIONS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
4975(e) of such Code is amended by striking ‘‘or’’ 
at the end of subparagraph (F), by striking the pe-
riod at the end of subparagraph and inserting ‘‘, 
or’’, and by adding at the end the following new sub-
paragraph: 
‘‘(H) a small business start-up savings ac-
count (within the meaning of section 7529).’’. 
(2) SPECIAL
RULE
FOR
CEASING
TO
BE
A 
SMALL
BUSINESS
START-UP
SAVINGS
ACCOUNT.— 
Section 4975(c) of such Code (relating to tax on 
prohibited transactions) is amended by adding at the 
end the following new paragraph: 
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‘‘(7) SPECIAL
RULE
FOR
SMALL
BUSINESS 
START-UP
SAVINGS
ACCOUNT.—An individual for 
whose benefit a small business start-up savings ac-
count (within the meaning of section 7529) is estab-
lished shall be exempt from the tax imposed by this 
section with respect to any transaction concerning 
such account (which would otherwise be taxable 
under this section) if, with respect to such trans-
action, the account ceases to be a small business 
start-up savings account by reason of the application 
of paragraph (3) or (4) of section 7529(e) to such 
account.’’. 
(d) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES.—Subsection (a) of section 62 of such 
Code is amended by inserting after paragraph (21) the 
following new paragraph: 
‘‘(22) CONTRIBUTIONS
TO
SMALL
BUSINESS 
START-UP SAVINGS ACCOUNTS.—The deduction al-
lowed by section 7529(d)(1)(A).’’. 
(e) CONFORMING AMENDMENTS.— 
(1) The table of chapters for subtitle D of such 
Code is amended by adding at the end the following 
new item: 
‘‘CHAPTER 50A. SMALL BUSINESS START-UP SAVINGS ACCOUNTS’’. 
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(2) The table of sections for chapter 77 of such 
Code is amended by inserting after the item relating 
to section 7528 the following new item: 
‘‘Sec. 7529. Small Business Start-Up Savings Accounts.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2015. 
TITLE VI—LIMIT FRIVOLOUS 
LAWSUITS 
SEC. 601. ATTORNEY ACCOUNTABILITY. 
(a) SANCTIONS UNDER RULE 11.—Rule 11(c) of the 
Federal Rules of Civil Procedure is amended— 
(1) in paragraph (1), by striking ‘‘may’’ and in-
serting ‘‘shall’’; 
(2) in paragraph (2), by striking ‘‘Rule 5’’ and 
all that follows through ‘‘motion.’’ and inserting 
‘‘Rule 5.’’; and 
(3) in paragraph (4), by striking ‘‘situated’’ 
and all that follows through the end of the para-
graph and inserting ‘‘situated, and to compensate 
the parties that were injured by such conduct. Sub-
ject to the limitations in paragraph (5), the sanction 
shall consist of an order to pay to the party or par-
ties the amount of the reasonable expenses incurred 
as a direct result of the violation, including reason-
able attorneys’ fees and costs. The court may also 
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impose additional appropriate sanctions, such as 
striking the pleadings, dismissing the suit, or other 
directives of a non-monetary nature, or, if warranted 
for effective deterrence, an order directing payment 
of a penalty into the court.’’. 
(b) RULE OF CONSTRUCTION.—Nothing in this Act 
or an amendment made by this Act shall be construed to 
bar or impede the assertion or development of new claims, 
defenses, or remedies under Federal, State, or local laws, 
including civil rights laws, or under the Constitution of 
the United States. 
TITLE VII—INCREASE IRS 
ACCOUNTABILITY 
SEC. 701. MODIFICATION OF STANDARDS FOR AWARDING 
OF COSTS AND CERTAIN FEES. 
(a) SMALL BUSINESSES ELIGIBLE WITHOUT RE-
GARD TO NET WORTH.—Subparagraph (D) of section 
7430(c)(4) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ at the end of clause (i)(II), 
by striking the period at the end of clause (ii) and insert-
ing ‘‘, and’’, and by adding at the end the following new 
clause: 
‘‘(iii) in the case of an eligible small 
business, the net worth limitation in clause 
(ii) of such section shall not apply.’’. 
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(b) ELIGIBLE SMALL BUSINESS.—Paragraph (4) of 
section 7430(c) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(F) ELIGIBLE
SMALL
BUSINESS.—For 
purposes of subparagraph (D)(iii), the term ‘eli-
gible small business’ means, with respect to any 
proceeding commenced in a taxable year— 
‘‘(i) a corporation the stock of which 
is not publicly traded, 
‘‘(ii) a partnership, or 
‘‘(iii) a sole proprietorship, 
if the average annual gross receipts of such cor-
poration, partnership, or sole proprietorship for 
the 3-taxable-year period preceding such taxable 
year does not exceed $50,000,000. For pur-
poses of applying the test under the preceding 
sentence, rules similar to the rules of para-
graphs (2) and (3) of section 448(c) shall 
apply.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to proceedings commenced after 
the date of the enactment of this Act. 
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