HR 3996 PCS
section 6042(c), 6049(c)(2)(A), or 6050N(b) 
with respect to any item in such account shall 
instead be required to be furnished on or before 
February 15 if furnished as part of such con-
solidated reporting statement.’’. 
(b) DETERMINATION OF BASIS OF CERTAIN SECURI-
TIES ON ACCOUNT BY ACCOUNT METHOD.—Section 1012 
(relating to basis of property–cost) is amended— 
(1) by striking ‘‘The basis of property’’ and in-
serting the following: 
‘‘(a) IN GENERAL.—The basis of property’’, 
(2) by striking ‘‘The cost of real property’’ and 
inserting the following: 
‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ES-
TATE TAXES.—The cost of real property’’, and 
(3) by adding at the end the following new sub-
section: 
‘‘(c) DETERMINATIONS BY ACCOUNT.— 
‘‘(1) IN GENERAL.—In the case of the sale, ex-
change, or other disposition of a specified security 
on or after the applicable date, the conventions pre-
scribed by regulations under this section shall be ap-
plied on an account by account basis. 
‘‘(2) APPLICATION TO OPEN-END FUNDS.— 
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‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any stock in an open-end 
fund acquired before January 1, 2009, shall be 
treated as a separate account from any such 
stock acquired on or after such date. 
‘‘(B) ELECTION BY OPEN-END FUND FOR 
TREATMENT AS SINGLE ACCOUNT.—If an open- 
end fund elects (at such time and in such form 
and manner as the Secretary may prescribe) to 
have this subparagraph apply with respect to 
one or more of its stockholders— 
‘‘(i) subparagraph (A) shall not apply 
with respect to any stock in such fund held 
by such stockholders, and 
‘‘(ii) all stock in such fund which is 
held by such stockholders shall be treated 
as covered securities described in section 
6045(g)(3) without regard to the date of 
the acquisition of such stock. 
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion, the terms ‘specified security’, ‘applicable date’, 
and ‘open-end fund’ shall have the meaning given 
such terms in section 6045(g).’’. 
(c) INFORMATION BY TRANSFERORS TO AID BRO-
KERS.— 
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(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 is amended by inserting 
after section 6045 the following new section: 
‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION 
WITH TRANSFERS OF COVERED SECURITIES 
TO BROKERS. 
‘‘(a) FURNISHING OF INFORMATION.—Every applica-
ble person which transfers to a broker (as defined in sec-
tion 6045(c)(1)) a security which is a covered security (as 
defined in section 6045(g)(3)) in the hands of such appli-
cable person shall furnish to such broker a written state-
ment in such manner and setting forth such information 
as the Secretary may by regulations prescribe for purposes 
of enabling such broker to meet the requirements of sec-
tion 6045(g). 
‘‘(b) APPLICABLE PERSON.—For purposes of sub-
section (a), the term ‘applicable person’ means— 
‘‘(1) any broker (as defined in section 
6045(c)(1)), and 
‘‘(2) any other person as provided by the Sec-
retary in regulations. 
‘‘(c) TIME
FOR
FURNISHING
STATEMENT.—Any 
statement required by subsection (a) shall be furnished 
not later than the earlier of— 
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‘‘(1) 45 days after the date of the transfer de-
scribed in subsection (a), or 
‘‘(2) January 15 of the year following the cal-
endar year during which such transfer occurred.’’. 
(2) ASSESSABLE
PENALTIES.—Paragraph (2) 
of section 6724(d) (defining payee statement) is 
amended 
by 
redesignating 
subparagraphs 
(I) 
through (CC) as subparagraphs (J) through (DD), 
respectively, and by inserting after subparagraph 
(H) the following new subparagraph: 
‘‘(I) section 6045A (relating to information 
required in connection with transfers of covered 
securities to brokers).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of 
chapter 61 is amended by inserting after the item 
relating to section 6045 the following new item: 
‘‘Sec. 6045A. Information required in connection with transfers of covered se-
curities to brokers.’’. 
(d) ADDITIONAL ISSUER INFORMATION TO AID BRO-
KERS.— 
(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 of the Internal Revenue 
Code of 1986, as amended by subsection (b), is 
amended by inserting after section 6045A the fol-
lowing new section: 
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100 
HR 3996 PCS
‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING 
BASIS OF SPECIFIED SECURITIES. 
‘‘(a) IN GENERAL.—According to the forms or regu-
lations prescribed by the Secretary, any issuer of a speci-
fied security shall make a return setting forth— 
‘‘(1) a description of any organizational action 
which affects the basis of such specified security of 
such issuer, 
‘‘(2) the quantitative effect on the basis of such 
specified security resulting from such action, and 
‘‘(3) such other information as the Secretary 
may prescribe. 
‘‘(b) TIME FOR FILING RETURN.—Any return re-
quired by subsection (a) shall be filed not later than the 
earlier of— 
‘‘(1) 45 days after the date of the action de-
scribed in subsection (a), or 
‘‘(2) January 31 of the year following the cal-
endar year during which such action occurred. 
‘‘(c) STATEMENTS TO BE FURNISHED TO HOLDERS 
OF SPECIFIED SECURITIES OR THEIR NOMINEES.—Ac-
cording to the forms or regulations prescribed by the Sec-
retary, every person required to make a return under sub-
section (a) with respect to a specified security shall furnish 
to the nominee with respect to the specified security (or 
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certificate holder if there is no nominee) a written state-
ment showing— 
‘‘(1) the name, address, and phone number of 
the information contact of the person required to 
make such return, 
‘‘(2) the information required to be shown on 
such return with respect to such security, and 
‘‘(3) such other information as the Secretary 
may prescribe. 
The written statement required under the preceding sen-
tence shall be furnished to the holder on or before January 
31 of the year following the calendar year during which 
the action described in subsection (a) occurred. 
‘‘(d) SPECIFIED SECURITY.—For purposes of this 
section, the term ‘specified security’ has the meaning given 
such term by section 6045(g)(3)(B). No return shall be 
required under this section with respect to actions de-
scribed in subsection (a) with respect to a specified secu-
rity which occur before the applicable date (as defined in 
section 6045(g)(3)(C) with respect to such security. 
‘‘(e) PUBLIC REPORTING IN LIEU OF RETURN.—The 
Secretary may waive the requirements under subsections 
(a) and (c) with respect to a specified security, if the per-
son required to make the return under subsection (a) 
makes publicly available, in such form and manner as the 
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HR 3996 PCS
SEC. 624. PENALTY FOR FAILURE TO FILE S CORPORATION 
RETURNS. 
(a) IN GENERAL.—Part I of subchapter B of chapter 
68 (relating to assessable penalties) is amended by adding 
at the end the following new section: 
‘‘SEC. 6699A. FAILURE TO FILE S CORPORATION RETURN. 
‘‘(a) GENERAL RULE.—In addition to the penalty im-
posed by section 7203 (relating to willful failure to file 
return, supply information, or pay tax), if any S corpora-
tion required to file a return under section 6037 for any 
taxable year— 
‘‘(1) fails to file such return at the time pre-
scribed therefor (determined with regard to any ex-
tension of time for filing), or 
‘‘(2) files a return which fails to show the infor-
mation required under section 6037, 
such S corporation shall be liable for a penalty determined 
under subsection (b) for each month (or fraction thereof) 
during which such failure continues (but not to exceed 12 
months), unless it is shown that such failure is due to rea-
sonable cause. 
‘‘(b) AMOUNT PER MONTH.—For purposes of sub-
section (a), the amount determined under this subsection 
for any month is the product of— 
‘‘(1) $25, multiplied by 
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‘‘(2) the number of persons who were share-
holders in the S corporation during any part of the 
taxable year. 
‘‘(c) ASSESSMENT OF PENALTY.—The penalty im-
posed by subsection (a) shall be assessed against the S 
corporation. 
‘‘(d) DEFICIENCY PROCEDURES NOT TO APPLY.— 
Subchapter B of chapter 63 (relating to deficiency proce-
dures for income, estate, gift, and certain excise taxes) 
shall not apply in respect of the assessment or collection 
of any penalty imposed by subsection (a).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part I of subchapter B of chapter 68 is amended by 
adding at the end the following new item: 
‘‘Sec. 6699A. Failure to file S corporation return.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns required to be filed after 
the date of the enactment of this Act. 
SEC. 625. 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 
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amended by striking ‘‘115 percent’’ and inserting ‘‘181 
percent’’. 
Passed the House of Representatives November 9, 
2007. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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Calendar No. 487 
110TH CONGRESS 
1ST SESSION 
H. R. 3996 
AN ACT 
To amend the Internal Revenue Code of 1986 to 
extend certain expiring provisions, and for other 
purposes. 
NOVEMBER 14, 2007 
Read the second time and placed on the calendar 
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