mulgated under section (a) herein shall be allowed to use 
the credentials or designation as ‘enrolled agent’, ‘EA’, or 
‘E.A.’.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 7525. Enrolled agents.’’.
(c) PRIOR REGULATIONS.—Nothing in the amend-
ments made by this section shall be construed to have any 
effect on part 10 of title 31, Code of Federal Regulations, 
or any other Federal rule or regulation issued before the 
date of the enactment of this Act. 
SEC. 223. FINANCIAL MANAGEMENT SERVICE FEES. 
Notwithstanding any other provision of law, the Fi-
nancial Management Service may charge the Internal Rev-
enue Service, and the Internal Revenue Service may pay 
the Financial Management Service, a fee sufficient to 
cover the full cost of implementing a continuous levy pro-
gram under subsection (h) of section 6331 of the Internal 
Revenue Code of 1986. Any such fee shall be based on 
actual levies made and shall be collected by the Financial 
Management Service by the retention of a portion of 
amounts collected by levy pursuant to that subsection. 
Amounts received by the Financial Management Service 
as fees under that subsection shall be deposited into the 
account of the Department of the Treasury under section 
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3711(g)(7) of title 31, United States Code, and shall be 
collected and accounted for in accordance with the provi-
sions of that section. The amount credited against the tax-
payer’s liability on account of the continuous levy shall 
be the amount levied, without reduction for the amount 
paid to the Financial Management Service as a fee. 
SEC. 224. AMENDMENT TO TREASURY AUCTION REFORMS. 
(a) IN GENERAL.—Clause (i) of section 202(c)(4)(B) 
of the Government Securities Act Amendments of 1993 
(31 U.S.C. 3121 note) is amended by inserting before the 
semicolon ‘‘(or, if earlier, at the time the Secretary re-
leases the minutes of the meeting in accordance with para-
graph (2))’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to meetings held after the date 
of the enactment of this Act. 
TITLE III—REFORM OF PENALTY 
AND INTEREST PROVISIONS
SEC. 301. FAILURE TO PAY ESTIMATED TAX PENALTY CON-
VERTED TO INTEREST CHARGE ON ACCUMU-
LATED UNPAID BALANCE. 
(a) PENALTY MOVED TO INTEREST CHAPTER OF 
CODE.—The Internal Revenue Code of 1986 is amended 
by redesignating section 6654 as section 6641 and by 
moving section 6641 (as so redesignated) from part I of 
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subchapter A of chapter 68 to the end of subchapter E 
of chapter 67 (as added by subsection (e)(1) of this sec-
tion). 
(b) PENALTY CONVERTED TO INTEREST CHARGE.—
The heading and subsections (a) and (b) of section 6641 
(as so redesignated) are amended to read as follows: 
‘‘SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY 
ESTIMATED INCOME TAX. 
‘‘(a) IN GENERAL.—Interest shall be paid on any un-
derpayment of estimated tax by an individual for a taxable 
year for each day of such underpayment. The amount of 
such interest for any day shall be the product of the un-
derpayment rate established under subsection (b)(2) mul-
tiplied by the amount of the underpayment. 
‘‘(b) AMOUNT
OF
UNDERPAYMENT; INTEREST 
RATE.—For purposes of subsection (a)—
‘‘(1) AMOUNT.—The amount of the under-
payment on any day shall be the excess of—
‘‘(A) the sum of the required installments 
for the taxable year the due dates for which are 
on or before such day, over 
‘‘(B) the sum of the amounts (if any) of 
estimated tax payments made on or before such 
day on such required installments. 
‘‘(2) DETERMINATION OF INTEREST RATE.—
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‘‘(A) IN
GENERAL.—The underpayment 
rate with respect to any day in an installment 
underpayment period shall be the under-
payment rate established under section 6621 
for the first day of the calendar quarter in 
which such installment underpayment period 
begins. 
‘‘(B) INSTALLMENT
UNDERPAYMENT
PE-
RIOD.—For purposes of subparagraph (A), the 
term ‘installment underpayment period’ means 
the period beginning on the day after the due 
date for a required installment and ending on 
the due date for the subsequent required in-
stallment (or in the case of the 4th required in-
stallment, the 15th day of the 4th month fol-
lowing the close of a taxable year). 
‘‘(C) DAILY RATE.—The rate determined 
under subparagraph (A) shall be applied on a 
daily basis and shall be based on the assump-
tion of 365 days in a calendar year. 
‘‘(3) TERMINATION OF ESTIMATED TAX INTER-
EST.—No day after the end of the installment un-
derpayment period for the 4th required installment 
specified in paragraph (2)(B) for a taxable year
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shall be treated as a day of underpayment with re-
spect to such taxable year.’’. 
(c) INCREASE
IN SAFE HARBOR WHERE TAX
IS 
SMALL.—
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
6641(d)(1)(B) (as so redesignated) is amended to 
read as follows: 
‘‘(i) the lesser of—
‘‘(I) 90 percent of the tax shown 
on the return for the taxable year (or, 
if no return is filed, 90 percent of the 
tax for such year), or 
‘‘(II) the tax shown on the return 
for the taxable year (or, if no return 
is filed, the tax for such year) reduced 
(but not below zero) by $2,000, or’’. 
(2) CONFORMING AMENDMENT.—Subsection (e) 
of section 6641 (as so redesignated) is amended by 
striking paragraph (1) and redesignating paragraphs 
(2) and (3) as paragraphs (1) and (2), respectively. 
(d) CONFORMING AMENDMENTS.—
(1) Paragraphs (1) and (2) of subsection (e) 
(as redesignated by subsection (c)(2)) and sub-
section (h) of section 6641 (as so designated) are 
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each amended by striking ‘‘addition to tax’’ each 
place it occurs and inserting ‘‘interest’’. 
(2) Section 167(g)(5)(D) is amended by strik-
ing ‘‘6654’’ and inserting ‘‘6641’’. 
(3) Section 460(b)(1) is amended by striking 
‘‘6654’’ and inserting ‘‘6641’’. 
(4) Section 3510(b) is amended—
(A) by striking ‘‘section 6654’’ in para-
graph (1) and inserting ‘‘section 6641’’; 
(B) by amending paragraph (2)(B) to read 
as follows: 
‘‘(B) no interest would be required to be 
paid (but for this section) under 6641 for such 
taxable year by reason of the $2,000 amount 
specified in section 6641(d)(1)(B)(i)(II).’’; 
(C) by striking ‘‘section 6654(d)(2)’’ in 
paragraph 
(3) 
and 
inserting 
‘‘section 
6641(d)(2)’’; and 
(D) by striking paragraph (4). 
(5) Section 6201(b)(1) is amended by striking 
‘‘6654’’ and inserting ‘‘6641’’. 
(6) Section 6601(h) is amended by striking 
‘‘6654’’ and inserting ‘‘6641’’. 
(7) Section 6621(b)(2)(B) is amended by strik-
ing ‘‘addition to tax under section 6654’’ and insert-
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ing ‘‘interest required to be paid under section 
6641’’. 
(8) Section 6622(b) is amended—
(A) by striking ‘‘PENALTY
FOR’’ in the 
heading; and 
(B) by striking ‘‘addition to tax under sec-
tion 6654 or 6655’’ and inserting ‘‘interest re-
quired to be paid under section 6641 or addi-
tion to tax under section 6655’’. 
(9) Section 6658(a) is amended—
(A) by striking ‘‘6654, or 6655’’ and in-
serting ‘‘or 6655, and no interest shall be re-
quired to be paid under section 6641,’’; and 
(B) by inserting ‘‘or paying interest’’ after 
‘‘the tax’’ in paragraph (2)(B)(ii). 
(10) Section 6665(b) is amended—
(A) in the matter preceding paragraph (1) 
by striking ‘‘, 6654,’’; and 
(B) in paragraph (2) by striking ‘‘6654 
or’’. 
(11) Section 7203 is amended by striking ‘‘sec-
tion 6654 or 6655’’ and inserting ‘‘section 6655 or 
interest required to be paid under section 6641’’. 
(e) CLERICAL AMENDMENTS.—
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(1) Chapter 67 is amended by inserting after 
subchapter D the following: 
‘‘Subchapter E—Interest on Failure by 
Individual to Pay Estimated Income Tax
‘‘Sec. 6641. Interest on failure by individual to pay estimated in-
come tax.’’.
(2) The table of subchapters for chapter 67 is 
amended by adding at the end the following new 
items:
‘‘Subchapter D. Notice requirements. 
‘‘Subchapter E. Interest on failure by individual to pay estimated 
income tax.’’.
(3) The table of sections for part I of sub-
chapter A of chapter 68 is amended by striking the 
item relating to section 6654. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to installment payments for taxable 
years beginning after December 31, 2002. 
SEC. 302. EXCLUSION FROM GROSS INCOME FOR INTEREST 
ON OVERPAYMENTS OF INCOME TAX BY INDI-
VIDUALS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 (relating to items specifically excluded from gross 
income) is amended by inserting after section 139 the fol-
lowing new section: 
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‘‘SEC. 139A. EXCLUSION FROM GROSS INCOME FOR INTER-
EST ON OVERPAYMENTS OF INCOME TAX BY 
INDIVIDUALS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
gross income shall not include interest paid under section 
6611 on any overpayment of tax imposed by this subtitle. 
‘‘(b) EXCEPTION.—Subsection (a) shall not apply in 
the case of a failure to claim items resulting in the over-
payment on the original return if the Secretary determines 
that the principal purpose of such failure is to take advan-
tage of subsection (a).
‘‘(c) SPECIAL RULE FOR DETERMINING MODIFIED 
ADJUSTED GROSS INCOME.—For purposes of this title, 
interest not included in gross income under subsection (a) 
shall not be treated as interest which is exempt from tax 
for purposes of sections 32(i)(2)(B) and 6012(d) or any 
computation in which interest exempt from tax under this 
title is added to adjusted gross income.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 is amended by 
inserting after the item relating to section 139 the fol-
lowing new item:
‘‘Sec. 139A. Exclusion from gross income for interest on over-
payments of income tax by individuals.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to interest received in calendar
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years beginning after the date of the enactment of this 
Act. 
SEC. 303. ABATEMENT OF INTEREST. 
(a) ABATEMENT OF INTEREST WITH RESPECT TO 
ERRONEOUS REFUND CHECK WITHOUT REGARD TO SIZE 
OF REFUND.—Paragraph (2) of section 6404(e) is amend-
ed by striking ‘‘unless—’’ and all that follows and insert-
ing ‘‘unless the taxpayer (or a related party) has in any 
way caused such erroneous refund.’’. 
(b) ABATEMENT OF INTEREST TO EXTENT INTER-
EST
IS ATTRIBUTABLE
TO TAXPAYER RELIANCE
ON 
WRITTEN STATEMENTS OF THE IRS.—Subsection (f) of 
section 6404 is amended—
(1) in the subsection heading, by striking 
‘‘PENALTY OR ADDITION’’ and inserting ‘‘INTEREST, 
PENALTY, OR ADDITION’’; and 
(2) in paragraph (1) and in subparagraph (B) 
of paragraph (2), by striking ‘‘penalty or addition’’ 
and inserting ‘‘interest, penalty, or addition’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to interest accruing 
on or after the date of the enactment of this Act.
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SEC. 304. DEPOSITS MADE TO SUSPEND RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS. 
(a) IN GENERAL.—Subchapter A of chapter 67 (re-
lating to interest on underpayments) is amended by add-
ing at the end the following new section: 
‘‘SEC. 6603. DEPOSITS MADE TO SUSPEND RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS, 
ETC. 
‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER THAN 
AS PAYMENT OF TAX.—A taxpayer may make a cash de-
posit with the Secretary which may be used by the Sec-
retary to pay any tax imposed under subtitle A or B or 
chapter 41, 42, 43, or 44 which has not been assessed 
at the time of the deposit. Such a deposit shall be made 
in such manner as the Secretary shall prescribe. 
‘‘(b) NO INTEREST IMPOSED.—To the extent that 
such deposit is used by the Secretary to pay tax, for pur-
poses of section 6601 (relating to interest on underpay-
ments), the tax shall be treated as paid when the deposit 
is made. 
‘‘(c) RETURN OF DEPOSIT.—Except in a case where 
the Secretary determines that collection of tax is in jeop-
ardy, the Secretary shall return to the taxpayer any 
amount of the deposit (to the extent not used for a pay-
ment of tax) which the taxpayer requests in writing. 
‘‘(d) PAYMENT OF INTEREST.—
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‘‘(1) IN
GENERAL.—For purposes of section 
6611 (relating to interest on overpayments), a de-
posit which is returned to a taxpayer shall be treated 
as a payment of tax for any period to the extent 
(and only to the extent) attributable to a disputable 
tax for such period. Under regulations prescribed by 
the Secretary, rules similar to the rules of section 
6611(b)(2) shall apply. 
‘‘(2) DISPUTABLE TAX.—
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘disputable tax’ means the 
amount of tax specified at the time of the de-
posit as the taxpayer’s reasonable estimate of 
the maximum amount of any tax attributable to 
disputable items. 
‘‘(B) SAFE
HARBOR
BASED
ON
30-DAY 
LETTER.—In the case of a taxpayer who has 
been issued a 30-day letter, the maximum 
amount of tax under subparagraph (A) shall 
not be less than the amount of the proposed de-
ficiency specified in such letter. 
‘‘(3) OTHER
DEFINITIONS.—For purposes of 
paragraph (2)—
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‘‘(A) DISPUTABLE ITEM.—The term ‘dis-
putable item’ means any item of income, gain, 
loss, deduction, or credit if the taxpayer—
‘‘(i) has a reasonable basis for its 
treatment of such item, and 
‘‘(ii) reasonably believes that the Sec-
retary also has a reasonable basis for dis-
allowing the taxpayer’s treatment of such 
item. 
‘‘(B) 30-DAY LETTER.—The term ‘30-day 
letter’ means the first letter of proposed defi-
ciency which allows the taxpayer an opportunity 
for administrative review in the Internal Rev-
enue Service Office of Appeals. 
‘‘(4) RATE OF INTEREST.—The rate of interest 
allowable under this subsection shall be the Federal 
short-term rate determined under section 6621(b), 
compounded daily. 
‘‘(e) USE OF DEPOSITS.—
‘‘(1) PAYMENT OF TAX.—Except as otherwise 
provided by the taxpayer, deposits shall be treated 
as used for the payment of tax in the order depos-
ited. 
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‘‘(2) RETURNS
OF
DEPOSITS.—Deposits shall 
be treated as returned to the taxpayer on a last-in, 
first-out basis.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter A of chapter 67 is amended by adding at 
the end the following new item:
‘‘Sec. 6603. Deposits made to suspend running of interest on po-
tential underpayments, etc.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by 
this section shall apply to deposits made after the 
date of the enactment of this Act. 
(2) COORDINATION
WITH
DEPOSITS
MADE 
UNDER REVENUE PROCEDURE 84–58.—In the case of 
an amount held by the Secretary of the Treasury or 
his delegate on the date of the enactment of this Act 
as a deposit in the nature of a cash bond deposit 
pursuant to Revenue Procedure 84–58, the date that 
the taxpayer identifies such amount as a deposit 
made pursuant to section 6603 of the Internal Rev-
enue Code (as added by this Act) shall be treated as 
the date such amount is deposited for purposes of 
such section 6603.
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SEC. 305. EXPANSION OF INTEREST NETTING FOR INDIVID-
UALS. 
(a) IN GENERAL.—Subsection (d) of section 6621 
(relating to elimination of interest on overlapping periods 
of tax overpayments and underpayments) is amended by 
adding at the end the following: ‘‘Solely for purposes of 
the preceding sentence, section 6611(e) shall not apply in 
the case of an individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to interest accrued after Decem-
ber 31, 2002. 
SEC. 306. WAIVER OF CERTAIN PENALTIES FOR FIRST-TIME 
UNINTENTIONAL MINOR ERRORS. 
(a) IN GENERAL.—Section 6651 (relating to failure 
to file tax return or to pay tax) is amended by adding 
at the end the following new subsection: 
‘‘(i) TREATMENT OF FIRST-TIME UNINTENTIONAL 
MINOR ERRORS.—
‘‘(1) IN GENERAL.—In the case of a return of 
tax imposed by subtitle A filed by an individual, the 
Secretary may waive an addition to tax under sub-
section (a) if—
‘‘(A) the individual has a history of compli-
ance with the requirements of this title, 
‘‘(B) it is shown that the failure is due to 
an unintentional minor error, 
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‘‘(C) the penalty would be grossly dis-
proportionate to the action or expense that 
would have been needed to avoid the error, and 
imposing the penalty would be against equity 
and good conscience, 
‘‘(D) waiving the penalty would promote 
compliance with the requirements of this title 
and effective tax administration, and 
‘‘(E) the taxpayer took all reasonable steps 
to remedy the error promptly after discovering 
it. 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 
apply if—
‘‘(A) the Secretary has waived any addition 
to tax under this subsection with respect to any 
prior failure by such individual, 
‘‘(B) the failure is a mathematical or cler-
ical error (as defined in section 6213(g)(2)), or 
‘‘(C) the failure is the lack of a required 
signature.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on January 1, 2003.
SEC. 307. FRIVOLOUS TAX SUBMISSIONS. 
(a) CIVIL PENALTIES.—Section 6702 is amended to 
read as follows: 
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‘‘SEC. 6702. FRIVOLOUS TAX SUBMISSIONS. 
‘‘(a) CIVIL PENALTY
FOR FRIVOLOUS TAX RE-
TURNS.—A person shall pay a penalty of $5,000 if—
‘‘(1) such person files what purports to be a re-
turn of a tax imposed by this title but which—
‘‘(A) does not contain information on 
which the substantial correctness of the self-as-
sessment may be judged, or 
‘‘(B) contains information that on its face 
indicates that the self-assessment is substan-
tially incorrect; and 
‘‘(2) the conduct referred to in paragraph (1)— 
‘‘(A) is based on a position which the Sec-
retary has identified as frivolous under sub-
section (c), or 
‘‘(B) reflects a desire to delay or impede 
the administration of Federal tax laws. 
‘‘(b) CIVIL PENALTY
FOR SPECIFIED FRIVOLOUS 
SUBMISSIONS.—
‘‘(1) IMPOSITION OF PENALTY.—Except as pro-
vided in paragraph (3), any person who submits a 
specified frivolous submission shall pay a penalty of 
$5,000. 
‘‘(2) SPECIFIED FRIVOLOUS SUBMISSION.—For 
purposes of this section—
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‘‘(A) 
SPECIFIED
FRIVOLOUS
SUBMIS-
SION.—The term ‘specified frivolous submis-
sion’ means a specified submission if any por-
tion of such submission—
‘‘(i) is based on a position which the 
Secretary has identified as frivolous under 
subsection (c), or 
‘‘(ii) reflects a desire to delay or im-
pede the administration of Federal tax 
laws. 
‘‘(B) SPECIFIED SUBMISSION.—The term 
‘specified submission’ means—
‘‘(i) a request for a hearing under—
‘‘(I) section 6320 (relating to no-
tice and opportunity for hearing upon 
filing of notice of lien), or 
‘‘(II) section 6330 (relating to 
notice and opportunity for hearing be-
fore levy), and 
‘‘(ii) an application under—
‘‘(I) section 7811 (relating to 
taxpayer assistance orders), 
‘‘(II) section 6159 (relating to 
agreements for payment of tax liabil-
ity in installments), or 
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‘‘(III) section 7122 (relating to 
compromises). 
‘‘(3) OPPORTUNITY
TO
WITHDRAW
SUBMIS-
SION.—If the Secretary provides a person with no-
tice that a submission is a specified frivolous sub-
mission and such person withdraws such submission 
promptly after such notice, the penalty imposed 
under paragraph (1) shall not apply with respect to 
such submission. 
‘‘(c) LISTING OF FRIVOLOUS POSITIONS.—The Sec-
retary shall prescribe (and periodically revise) a list of po-
sitions which the Secretary has identified as being frivo-
lous for purposes of this subsection. The Secretary shall 
not include in such list any position that the Secretary 
determines 
meets 
the 
requirement 
of 
section 
6662(d)(2)(B)(ii)(II). 
‘‘(d) REDUCTION OF PENALTY.—The Secretary may 
reduce the amount of any penalty imposed under this sec-
tion if the Secretary determines that such reduction would 
promote compliance with and administration of the Fed-
eral tax laws. 
‘‘(e) PENALTIES
IN ADDITION
TO OTHER PEN-
ALTIES.—The penalties imposed by this section shall be 
in addition to any other penalty provided by law.’’.
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(b) TREATMENT
OF FRIVOLOUS REQUESTS
FOR 
HEARINGS BEFORE LEVY.—
(1) FRIVOLOUS
REQUESTS
DISREGARDED.—
Section 6330 (relating to notice and opportunity for 
hearing before levy) is amended by adding at the 
end the following new subsection: 
‘‘(g) FRIVOLOUS REQUESTS FOR HEARING, ETC.—
Notwithstanding any other provision of this section, if the 
Secretary determines that any portion of a request for a 
hearing under this section or section 6320 meets the re-
quirement of clause (i) or (ii) of section 6702(b)(2)(A), 
then the Secretary may treat such portion as if it were 
never submitted and such portion shall not be subject to 
any further administrative or judicial review.’’. 
(2) PRECLUSION
FROM
RAISING
FRIVOLOUS 
ISSUES AT HEARING.—Section 6330(c)(4) is amend-
ed—
(A) by striking ‘‘(A)’’ and inserting 
‘‘(A)(i)’’; 
(B) by striking ‘‘(B)’’ and inserting ‘‘(ii)’’; 
(C) by striking the period at the end of the 
first sentence and inserting ‘‘; or’’; and 
(D) by inserting after subparagraph (A)(ii) 
(as so redesignated) the following: 
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‘‘(B) the issue meets the requirement of 
clause (i) or (ii) of section 6702(b)(2)(A).’’. 
(3) 
STATEMENT
OF
GROUNDS.—Section 
6330(b)(1) is amended by striking ‘‘under sub-
section (a)(3)(B)’’ and inserting ‘‘in writing under 
subsection (a)(3)(B) and states the grounds for the 
requested hearing’’. 
(c) TREATMENT
OF FRIVOLOUS REQUESTS
FOR 
HEARINGS UPON FILING OF NOTICE OF LIEN.—Section 
6320 is amended—
(1) in subsection (b)(1), by striking ‘‘under sub-
section (a)(3)(B)’’ and inserting ‘‘in writing under 
subsection (a)(3)(B) and states the grounds for the 
requested hearing’’, and 
(2) in subsection (c), by striking ‘‘and (e)’’ and 
inserting ‘‘(e), and (g)’’. 
(d) TREATMENT OF FRIVOLOUS APPLICATIONS FOR 
OFFERS-IN-COMPROMISE
AND
INSTALLMENT
AGREE-
MENTS.—Section 7122 is amended by adding at the end 
the following new subsection: 
‘‘(e) 
FRIVOLOUS
SUBMISSIONS, 
ETC.—Notwith-
standing any other provision of this section, if the Sec-
retary determines that any portion of an application for 
an offer-in-compromise or installment agreement sub-
mitted under this section or section 6159 meets the re-
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quirement of clause (i) or (ii) of section 6702(b)(2)(A), 
then the Secretary may treat such portion as if it were 
never submitted and such portion shall not be subject to 
any further administrative or judicial review.’’. 
(e) CLERICAL AMENDMENT.—The table of sections 
for part I of subchapter B of chapter 68 is amended by 
striking the item relating to section 6702 and inserting 
the following new item:
‘‘Sec. 6702. Frivolous tax submissions.’’.
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to submissions made and issues 
raised after the date on which the Secretary first pre-
scribes a list under section 6702(c) of the Internal Rev-
enue Code of 1986, as amended by subsection (a). 
SEC. 308. CLARIFICATION OF APPLICATION OF FEDERAL 
TAX DEPOSIT PENALTY. 
Nothing in section 6656 of the Internal Revenue 
Code of 1986 shall be construed to permit the percentage 
specified in subsection (b)(1)(A)(iii) thereof to apply other 
than in a case where the failure is for more than 15 days.
Æ
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