I
104TH CONGRESS
2D SESSION
H. R. 4256
To amend the Internal Revenue Code of 1986 to provide for the abatement
of interest on deficiencies attributable to certain partnership items.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 27, 1996
Mr. LAUGHLIN introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
for the abatement of interest on deficiencies attributable
to certain partnership items.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ABATEMENT OF INTEREST ON DEFICIENCIES
ATTRIBUTABLE TO CERTAIN PARTNERSHIP
ITEMS.
(a) IN GENERAL.—Section 6404 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
sections (f) and (g) as subsections (g) and (h), respec-
tively, and by inserting after subsection (e) the following
new subsection:
‘‘(f) ABATEMENT OF INTEREST ATTRIBUTABLE TO
CERTAIN PARTNERSHIP ITEMS.—
‘‘(1) IN GENERAL.—In the case of any assess-
ment of interest on any deficiency in income tax at-
tributable to a partnership item, the Secretary shall
abate such portion, if any, of such interest which
constitutes suspended partnership item interest.
‘‘(2) SUSPENDED
PARTNERSHIP
ITEM
INTER-
EST.—For purposes of this subsection, the term
‘suspended partnership item interest’ means interest
accruing for the period during which a judicial pro-
ceeding is pending pursuant to section 6226 with re-
spect to the deficiency referred to in paragraph (1),
but only to the extent that, during the pendency of
such proceeding, a non-indictable criminal investiga-
tion is also pending.
‘‘(3) NON-INDICTABLE
CRIMINAL
INVESTIGA-
TION.—For purposes of this subsection, the term
‘non-indictable criminal investigation’ means an in-
vestigation by the Internal Revenue Service, the De-
partment of Justice, or a grand jury, of any poten-
tial criminal violation of United States tax laws in-
volving matters related to the partnership which is
the subject of the judicial proceeding referred to in
paragraph (2), if such investigation does not result
in the indictment of any partner in such partner-
ship.
‘‘(4) PENDENCY OF NON-INDICTABLE CRIMINAL
INVESTIGATION.—For purposes of this subsection, a
non-indictable criminal investigation shall be deemed
pending—
‘‘(A) from the date of the Internal Revenue
Service or the Department of Justice authorizes
such investigation,
‘‘(B) to the last date on which each person
under investigation either has been indicted or
has been notified in writing that such investiga-
tion of him or her has terminated.
‘‘(5) CONVERTED
PARTNERSHIP
ITEMS.—A
partnership item subsequently converted to or other-
wise treated as a nonpartnership item shall nonethe-
less be deemed a partnership item for purposes of
paragraph (1).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to interest on deficiencies in in-
come tax attributable to—
(1) partnership items, and
(2) partnership items subsequently converted to
or otherwise treated as nonpartnership items,
with respect to a partnership which is the subject of a
judicial proceeding under section 6226 of the Internal
Revenue Code of 1986 pending on or commencing after
the date of the enactment of this Act.
Æ