I 
115TH CONGRESS 
1ST SESSION H. R. 3717 
To amend the Internal Revenue Code of 1986 to simplify income tax 
compliance for small businesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 8, 2017 
Mr. CHABOT (for himself and Ms. VELA´ZQUEZ) 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 simplify 
income tax compliance for small businesses, and for other 
purposes. 
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 
‘‘Small Business Owners’ Tax Simplification Act of 
2017’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Quarterly reporting of estimated tax payments. 
Sec. 3. Aligning the filing thresholds for information reporting. 
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Sec. 4. Uniform standards for the use of electronic signatures for third-party 
disclosure authorizations. 
Sec. 5. Pre-notification testing. 
Sec. 6. Treatment of cafeteria plans for employee-owners. 
Sec. 7. Excluding from self-employment income net earnings less than amount 
required for Social Security quarters of coverage. 
Sec. 8. Allowing a deduction for certain health insurance costs for self-employ-
ment tax purposes. 
Sec. 9. No effect of voluntary withholding agreements on worker classification. 
Sec. 10. Effect of voluntary training and group discount programs on worker 
classification. 
SEC. 2. QUARTERLY REPORTING OF ESTIMATED TAX PAY-
MENTS. 
(a) IN GENERAL.—The table contained in paragraph 
(2) of section 6654(c) of the Internal Revenue Code of 
1986 is amended— 
(1) by striking ‘‘June 15’’ and inserting ‘‘July 
15’’, and 
(2) by striking ‘‘September 15’’ and inserting 
‘‘October 15’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to installments due in taxable years 
beginning after December 31, 2017. 
SEC. 3. ALIGNING THE FILING THRESHOLDS FOR INFORMA-
TION REPORTING. 
(a) INCREASING
THE DOLLAR THRESHOLD RE-
QUIRED FOR FILING A 1099–MISC.— 
(1) IN
GENERAL.—Subsection (a) of section 
6041 of the Internal Revenue Code of 1986 is 
amended 
by 
striking 
‘‘$600’’ 
and 
inserting 
‘‘$1,500’’. 
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(2) INFLATION ADJUSTMENT.—Section 6041 of 
such Code is amended by adding at the end the fol-
lowing new subsections: 
‘‘(h) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in a calendar year after 2018, the 
dollar amount in subsection (a) shall be increased by an 
amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) 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 2017’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(i) ROUNDING.—If any dollar amount in subsection 
(a) (after being increased under subsection (g)) is not a 
multiple of $100, such dollar amount shall be rounded to 
the nearest multiple of $100.’’. 
(3) CONFORMING AMENDMENT.—The heading 
of subsection (a) of section 6041 of such Code is 
amended to read as follows: ‘‘PAYMENTS EXCEED-
ING THRESHOLD.’’. 
(b) INCREASING THE DOLLAR LIMIT FOR REMU-
NERATION FOR SERVICES AND DIRECT SALES.— 
(1) IN
GENERAL.—Paragraph (2) of section 
6041A(a) of the Internal Revenue Code of 1986 is 
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amended 
by 
striking 
‘‘$600’’ 
and 
inserting 
‘‘$1,500’’. 
(2) INFLATION ADJUSTMENT.—Section 6041A 
of such Code is amended by adding at the end the 
following new subsections: 
‘‘(g) INFLATION ADJUSTMENT.—In the case of any 
taxable year beginning in a calendar year after 2018, the 
dollar amount in subsection (a)(2) shall be increased by 
an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) 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 2017’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(h) ROUNDING.—If any dollar amount in subsection 
(a)(2) (after being increased under subsection (g)) is not 
a multiple of $100, such dollar amount shall be rounded 
to the nearest multiple of $100.’’. 
(c) DECREASING
THE DOLLAR THRESHOLD RE-
QUIRED
FOR FILING
A 1099–K; ELIMINATING
THE 
TRANSACTION THRESHOLD.—Subsection (e) of section 
6050W of such Code is amended by striking ‘‘only if’’ and 
all that follows through the period at the end and inserting 
‘‘only if the amount which would otherwise be reported 
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under subsection (a)(2) with respect to such transactions 
exceeds the dollar amount in effect for the taxable year 
under section 6041(a).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to returns for years 
beginning after December 31, 2017. 
SEC. 4. UNIFORM STANDARDS FOR THE USE OF ELEC-
TRONIC SIGNATURES FOR THIRD-PARTY DIS-
CLOSURE AUTHORIZATIONS. 
Not later than 6 months after the date of the enact-
ment of this section, the Secretary of the Treasury shall 
publish guidance to establish uniform standards and pro-
cedures for the acceptance of signatures in digital or other 
electronic form for purposes of— 
(1) any request for disclosure of a taxpayer’s 
return or return information under section 6103(c) 
of the Internal Revenue Code of 1986, and 
(2) any power of attorney executed by a tax-
payer. 
SEC. 5. PRE-NOTIFICATION TESTING. 
Not later than 180 days after the date of enactment 
of this Act, the Secretary of the Treasury will ensure that, 
for any refund or credit of overpayment of tax under the 
Internal Revenue Code of 1986 transferred to an indi-
vidual through electronic fund transfer, there is, prior to 
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such transfer, a prenotification testing to verify recipient 
information and assist in preventing refund fraud. 
SEC. 6. TREATMENT OF CAFETERIA PLANS FOR EMPLOYEE- 
OWNERS. 
(a) IN GENERAL.—Subsection (g) of section 125 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(5) SELF-EMPLOYED INDIVIDUALS.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 105(g), for purposes of providing qualified 
benefits under a cafeteria plan of an eligible 
employer (as defined in subsection (j)(5)) and 
for purposes of any prohibition on discrimina-
tion (including subsection (b)) with respect to a 
cafeteria plan— 
‘‘(i) the term ‘employee’ includes an 
individual who is an employee within the 
meaning of section 401(c)(1) and any indi-
vidual treated as a partner under section 
1372(a), 
‘‘(ii) an individual who owns the en-
tire interest in an unincorporated trade or 
business shall be treated as his own em-
ployer, and 
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‘‘(iii) a partnership shall be treated as 
the employer of each partner who is an 
employee within the meaning of clause (i). 
‘‘(B) LIMITATION.— 
‘‘(i) AMOUNTS EXCLUDED NOT TO EX-
CEED EARNED INCOME.—In the case of an 
individual treated as an employee by rea-
son of subparagraph (A)(i), subsection (a) 
shall apply to amounts for an individual 
only to the extent that such amounts ex-
ceeds the individual’s earned income (as 
defined in section 401(c)(2)) derived from 
the trade or business with respect to which 
the cafeteria plan is maintained. 
‘‘(ii) 
PARTNERSHIPS.—This 
para-
graph shall apply in the case of any indi-
vidual treated as a partner under section 
1372(a), except that, for purposes of this 
subsection, such individual’s wages (as de-
fined in section 3121) from the S corpora-
tion shall be treated as such individual’s 
earned income, and there shall be such ad-
justments in the application of this sub-
section as the Secretary may by regula-
tions prescribe. 
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‘‘(C) DENIAL OF DOUBLE BENEFIT.—No 
deduction or credit shall be allowed to an em-
ployee under any section of this chapter for any 
amount excluded from gross income under sub-
section (a) by reason of this paragraph.’’. 
(b) SIMPLE CAFETERIA PLANS.—Paragraph (3) of 
section 125(j) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(E) 
ALTERNATIVE
FOR
CERTAIN 
PLANS.— 
‘‘(i) IN GENERAL.—In the case of a 
plan that covers one or more individuals 
described in clause (i) of subsection 
(g)(5)(A), the requirements of this para-
graph shall be treated as met if the aver-
age employer contribution allocable to 
qualified benefits under the plan on behalf 
of individuals who are not qualified em-
ployees does not exceed 150 percent of the 
average employer contribution allocable to 
such benefits on behalf of individuals who 
are qualified employees. 
‘‘(ii) ADDITIONAL CONTRIBUTIONS.— 
In the case of a plan treated under clause 
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(i) as meeting the requirements of this 
paragraph, subparagraph (C) shall not 
apply.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2017. 
SEC. 7. EXCLUDING FROM SELF-EMPLOYMENT INCOME 
NET EARNINGS LESS THAN AMOUNT RE-
QUIRED FOR SOCIAL SECURITY QUARTERS 
OF COVERAGE. 
(a) IN GENERAL.—Paragraph (2) of section 1402(b) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘$400’’ and inserting ‘‘the amount required under sec-
tion 213(d) of the Social Security Act for a quarter of 
coverage for the calendar year in which such taxable year 
began’’. 
(b) SELF-EMPLOYMENT
TAX
RETURNS.—Section 
6017 of the Internal Revenue Code of 1986 is amended 
by striking ‘‘$400’’ and inserting ‘‘the amount required 
under section 1402(b)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after the date of the enactment of this Act. 
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SEC. 8. ALLOWING A DEDUCTION FOR CERTAIN HEALTH IN-
SURANCE COSTS FOR SELF-EMPLOYMENT 
TAX PURPOSES. 
(a) IN GENERAL.—Subsection (l) of section 162 of 
the Internal Revenue Code of 1986 is amended by striking 
paragraph (4). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2017. 
SEC. 9. NO EFFECT OF VOLUNTARY WITHHOLDING AGREE-
MENTS ON WORKER CLASSIFICATION. 
Section 3402(p) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
paragraph: 
‘‘(4) WORKER
CLASSIFICATION.—Agreements 
under paragraph (3) may not be taken into account 
in determining whether any party to such agreement 
is an employee or an employer for purposes of any 
provision of this title.’’. 
SEC. 10. EFFECT OF VOLUNTARY TRAINING AND GROUP 
DISCOUNT PROGRAMS ON WORKER CLASSI-
FICATION. 
(a) IN GENERAL.—Chapter 79 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new section: 
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‘‘SEC. 7706. EFFECT OF VOLUNTARY TRAINING AND GROUP 
DISCOUNT PROGRAMS ON WORKER CLASSI-
FICATION. 
‘‘(a) IN GENERAL.—For purposes of this title, the 
determination of whether an individual is an employee 
shall be made without regard to the following: 
‘‘(1) Whether such individual is offered, and 
whether such individual accepts, voluntary training. 
‘‘(2) Whether such individual is offered, or 
takes advantage of, a discount on goods and services 
available by reason of such individual performing 
services. 
‘‘(b) REGULATIONS.—The Secretary shall issue such 
regulations as the Secretary determines are necessary to 
carry out the purposes of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 79 of such Code is amended by inserting after 
the item relating to section 7705 the following: 
‘‘Sec. 7706. Effect of voluntary training and group discount programs on work-
er classification.’’. 
Æ 
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