894 
(1) by redesignating paragraphs (1) and (2) as 
subparagraphs (A) and (B), respectively, and by 
moving such subparagraphs 2 ems to the right, 
(2) by striking ‘‘IN SECTION 501(c)(4).—Every 
organization’’ and inserting the following: ‘‘IN SEC-
TION 501(c)(4).— 
‘‘(1) IN GENERAL.—Every organization’’, and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) RESTRICTION
ON
DONATION
REPORT-
ING.—In the case of any such organization, informa-
tion relating to contributions and gifts may only be 
required to be included on a return required under 
subsection (a) if the contribution or gift is made by 
an officer or director of the organization (or an indi-
vidual having powers or responsibilities similar to 
those of officers or directors) or any covered em-
ployee (as defined in section 4960(c)(2)) of the orga-
nization.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns for taxable years begin-
ning after December 31, 2013. 
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SEC. 6004. MANDATORY ELECTRONIC FILING FOR ANNUAL 
RETURNS OF EXEMPT ORGANIZATIONS. 
(a) IN GENERAL.—Section 6033, as amended by the 
preceding provisions of this Act, is amended by redesig-
nating subsection (m) as subsection (n) and by inserting 
after subsection (l) the following new subsection: 
‘‘(m) MANDATORY ELECTRONIC FILING.—Any orga-
nization required to file a return under this section shall 
file such return in electronic form.’’. 
(b) INSPECTION OF ELECTRONICALLY FILED AN-
NUAL RETURNS.—Subsection (b) of section 6104 is 
amended by adding at the end the following: ‘‘Any annual 
return required to be filed electronically under section 
6033(m) shall be made available by the Secretary to the 
public in machine readable format as soon as prac-
ticable.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to taxable years beginning after the date 
of the enactment of this Act. 
(2) TRANSITIONAL RELIEF.— 
(A) SMALL ORGANIZATIONS.— 
(i) IN GENERAL.—In the case of any 
small organizations, or any other organiza-
tions for which the Secretary determines 
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the application of the amendments made 
by subsection (a) would cause undue bur-
den without a delay, the Secretary may 
delay the application of such amendments, 
but not later than taxable years beginning 
2 years after the date of the enactment of 
this Act. 
(ii) SMALL ORGANIZATION.—For pur-
poses of clause (i), the term ‘‘small organi-
zation’’ means any organization— 
(I) the gross receipts of which for 
the 
taxable 
year 
are 
less 
than 
$200,000, and 
(II) the aggregate gross assets of 
which at the end of the taxable year 
are less than $500,000. 
(B) ORGANIZATIONS
FILING
FORM
990– 
T.—In the case of any organization described in 
section 511(a)(2) of the Internal Revenue Code 
of 1986 which is subject to the tax imposed by 
section 511(a)(1) of such Code on its unrelated 
business taxable income, or any organization re-
quired to file a return under section 6033 of 
such Code and include information under sub-
section (e) thereof, the Secretary may delay the 
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application of the amendments made by this 
section, but not later than taxable years begin-
ning 2 years after the date of the enactment of 
this Act. 
SEC. 6005. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FA-
MILIAR WITH AND ACT IN ACCORD WITH CER-
TAIN TAXPAYER RIGHTS. 
Section 7803(a) is amended by redesignating para-
graph (3) as paragraph (4) and by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) EXECUTION OF DUTIES IN ACCORD WITH 
TAXPAYER RIGHTS.—In discharging his duties, the 
Commissioner shall ensure that employees of the In-
ternal Revenue Service are familiar with and act in 
accord with taxpayer rights as afforded by other 
provisions of this title, including— 
‘‘(A) the right to be informed, 
‘‘(B) the right to be assisted, 
‘‘(C) the right to be heard, 
‘‘(D) the right to pay no more than the 
correct amount of tax, 
‘‘(E) the right of appeal, 
‘‘(F) the right to certainty, 
‘‘(G) the right to privacy, 
‘‘(H) the right to confidentiality, 
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‘‘(I) the right to representation, and 
‘‘(J) the right to a fair and just tax sys-
tem.’’. 
SEC. 6006. TERMINATION OF EMPLOYMENT OF IRS EM-
PLOYEES FOR TAKING OFFICIAL ACTIONS 
FOR POLITICAL PURPOSES. 
Paragraph (10) of section 1203(b) of the Internal 
Revenue Service Restructuring and Reform Act of 1998 
is amended to read as follows: 
‘‘(10) performing, delaying, or failing to per-
form (or threatening to perform, delay, or fail to 
perform) any official action (including any audit) 
with respect to a taxpayer for purpose of extracting 
personal gain or benefit or for a political purpose.’’. 
SEC. 6007. RELEASE OF INFORMATION REGARDING THE 
STATUS OF CERTAIN INVESTIGATIONS. 
(a) IN GENERAL.—Subsection (e) of section 6103 is 
amended by adding at the end the following new para-
graph: 
‘‘(11) DISCLOSURE OF INFORMATION REGARD-
ING STATUS OF INVESTIGATION OF VIOLATION OF 
THIS SECTION.—In the case of a person who pro-
vides to the Secretary information indicating a viola-
tion of section 7213, 7213A, or 7214 with respect 
to any return or return information of such person, 
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the Secretary may disclose to such person (or such 
person’s designee)— 
‘‘(A) whether an investigation based on the 
person’s provision of such information has been 
initiated and whether it is open or closed, 
‘‘(B) whether any such investigation sub-
stantiated such a violation by any individual, 
and 
‘‘(C) whether any action has been taken 
with respect to such individual (including 
whether a referral has been made for prosecu-
tion of such individual).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 6008. REVIEW OF IRS EXAMINATION SELECTION PRO-
CEDURES. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of each Internal Rev-
enue Service operating division to assess the process used 
for determining how enforcement cases are selected and 
processed. Such study shall include a review of the fol-
lowing: 
(1) The standards each such operating division 
has established for enforcement case selection (in-
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cluding any automated or discretionary selection 
processes) and case work, and whether such stand-
ards meet the objectives of impartiality, objectivity, 
compliance, and minimizing taxpayer burden. 
(2) The extent to which any cases are initiated 
by referrals or complaints from inside or outside of 
the operating division (including from outside of the 
Internal Revenue Service). 
(3) The Internal Revenue Service controls (in-
cluding management reviews and regular updates) 
for assuring that its standards for enforcement cases 
(and handling of referrals and complaints) in each 
operating division are sufficient for achieving the ob-
jectives described in paragraph (1). 
(4) The Internal Revenue Service controls (in-
cluding training, monitoring, and quality assess-
ments) for assuring that its standards are adhered 
to by all division personnel and the effectiveness of 
such controls. 
(5) Whether the existing standards and controls 
provide reasonable assurance that each division’s en-
forcement processes meet the Internal Revenue Serv-
ice objectives of impartiality, objectivity, compliance, 
and minimizing taxpayer burden. 
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(b) INITIAL REPORT.—Not later than 1 year after 
the date of the enactment of this section, the Comptroller 
General shall submit to the Committee on Ways and 
Means of the House of Representatives, the Committee on 
Finance of the Senate, and the Secretary of the Treasury 
a report on the results of such study. Such report shall 
include such recommendations as the Comptroller General 
may deem advisable. 
(c) FOLLOW-UP ON RECOMMENDATIONS.—Not later 
than 180 days after a report is submitted with respect 
to an operating division under subsection (b), the Comp-
troller General shall conduct a follow-up study, and submit 
to the Committee on Ways and Means of the House of 
Representatives, the Committee on Finance of the Senate, 
and the Secretary of the Treasury a report, on whether 
any recommendations to improve case selection and case 
work processes have been implemented and are working 
as intended. 
(d) CONTINUING CASE MANAGEMENT STUDIES AND 
REPORTS.— 
(1) IN GENERAL.—After a report is submitted 
under subsection (b), the Comptroller General shall 
conduct follow-up studies and reports in the same 
manner as provided in subsections (a) and (b) with 
respect to each operating division of the Internal 
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Revenue Service and shall include in such study and 
report a review of whether any previous rec-
ommendations to improve case selection and case 
work processes have been implemented and are 
working as intended. 
(2) FREQUENCY.—Each such report with re-
spect to an operating division shall be submitted not 
later than 4 years after the date the most recent re-
port was submitted with respect to such operating 
division under subsection (b) or this subsection. The 
Comptroller General shall submit no fewer than 1 
such report each year. 
SEC. 6009. IRS EMPLOYEES PROHIBITED FROM USING PER-
SONAL 
EMAIL 
ACCOUNTS 
FOR 
OFFICIAL 
BUSINESS. 
No officer or employee of the Internal Revenue Serv-
ice may use a personal email account to conduct any offi-
cial business of the Government. 
SEC. 6010. MORATORIUM ON IRS CONFERENCES. 
The Internal Revenue Service shall not hold any con-
ference until the Treasury Inspector General for Tax Ad-
ministration submits a report to Congress— 
(1) certifying that the Internal Revenue Service 
has implemented all of the recommendations set out 
in such Inspector General’s report titled ‘‘Review of 
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the August 2010 Small Business/Self-Employed Di-
vision’s Conference in Anaheim, California’’, and 
(2) describing such implementation. 
SEC. 6011. APPLICABLE STANDARD FOR DETERMINATIONS 
OF WHETHER AN ORGANIZATION IS OPER-
ATED EXCLUSIVELY FOR THE PROMOTION OF 
SOCIAL WELFARE. 
(a) IN GENERAL.—The standard and definitions as 
in effect on January 1, 2010, which are used to determine 
whether an organization is operated exclusively for the 
promotion of social welfare for purposes of section 
501(c)(4) of the Internal Revenue Code of 1986 shall 
apply for purposes of determining the status of organiza-
tions under section 501(c)(4) of the Internal Revenue 
Code of 1986 after the date of the enactment of this Act. 
(b) PROHIBITION
ON MODIFICATION
OF STAND-
ARD.—The Secretary of the Treasury may not (nor may 
any delegate of such Secretary) issue, revise, or finalize 
any regulation (including the proposed regulations pub-
lished at 78 Fed. Reg. 71535 (November 29, 2013)), rev-
enue ruling, or other guidance not limited to a particular 
taxpayer relating to the standard and definitions specified 
in subsection (a). 
(c) APPLICATION
TO ORGANIZATIONS.—Except as 
provided in subsection (d), this section shall apply with 
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respect to any organization claiming tax exempt status 
under section 501(c)(4) of the Internal Revenue Code of 
1986 which was created on, before, or after the date of 
the enactment of this Act. 
(d) SUNSET.—This section shall not apply after the 
one-year period beginning on the date of the enactment 
of this Act. 
Subtitle B—Taxpayer Protection 
and Service Reforms 
SEC. 6101. EXTENSION OF IRS AUTHORITY TO REQUIRE 
TRUNCATED SOCIAL SECURITY NUMBERS ON 
FORM W–2. 
(a) IN GENERAL.—Paragraph (2) of section 6051(a) 
is amended by striking ‘‘his social security number’’ and 
inserting ‘‘an identifying number for the employee’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 6102. FREE ELECTRONIC FILING. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall, in cooperation with the private sector technology in-
dustry, maintain a program that provides free individual 
income tax preparation and electronic filing services to 
low-income taxpayers and elderly taxpayers. 
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(b) REQUIREMENTS OF PROGRAM.—The Secretary 
shall by regulation or other guidance prescribe with re-
spect to the program— 
(1) the qualifications, selection process, and 
contract term for businesses participating in the pro-
gram, 
(2) a process for periodic review of businesses 
participating in the program, 
(3) procedures for terminating business partici-
pation in the program for failure to comply with any 
program requirements, and 
(4) such other procedures as the Secretary de-
termines are necessary or appropriate to carry out 
the purposes of the program. 
(c) FREE FILE PROGRAM.—The Internal Revenue 
Service Free File program, as set forth in the notice pub-
lished in the Federal Register on November 4, 2002 (67 
Fed. Reg. 67247), shall be treated as meeting the require-
ments of subsection (a). 
SEC. 6103. PRE-POPULATED RETURNS PROHIBITED. 
Except to the extent provided in section 6014, 6020, 
or 6201(d) of the Internal Revenue Code of 1986, the Sec-
retary of the Treasury shall not provide to any person a 
proposed final return or statement for use by such person 
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to satisfy a filing or reporting requirement under such 
Code. 
SEC. 6104. FORM 1040SR FOR SENIORS. 
(a) IN GENERAL.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall make available a form, to 
be known as ‘‘Form 1040SR’’, for use by individuals to 
file the return of tax imposed by chapter 1 of the Internal 
Revenue Code of 1986. Such form shall be as similar as 
practicable to Form 1040EZ, except that— 
(1) the form shall be available to individuals 
who have attained age 65 as of the close of the tax-
able year, 
(2) the form may be used even if income for the 
taxable year includes— 
(A) social security benefits (as defined in 
section 86(d) of the Internal Revenue Code of 
1986), 
(B) distributions from qualified retirement 
plans (as defined in section 4974(c) of such 
Code), annuities or other such deferred pay-
ment arrangements, 
(C) interest and dividends, or 
(D) capital gains and losses taken into ac-
count in determining the deduction for adjusted 
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net capital gain under section 169 of such 
Code, and 
(3) the form shall be available without regard 
to the amount of any item of taxable income or the 
total amount of taxable income for the taxable year. 
(b) EFFECTIVE DATE.—The form required by sub-
section (a) shall be made available for taxable years begin-
ning after December 31, 2014. 
SEC. 6105. INCREASED REFUND AND CREDIT THRESHOLD 
FOR JOINT COMMITTEE ON TAXATION RE-
VIEW OF C CORPORATION RETURN. 
(a) IN GENERAL.—Subsections (a) and (b) of section 
6405 are each amended by inserting ‘‘($5,000,000 in the 
case of a C corporation)’’ after ‘‘$2,000,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act, except that such amendment shall not apply 
with respect to any refund or credit with respect to a re-
port that has been made before such date under section 
6405 of the Internal Revenue Code of 1986. 
Subtitle C—Tax Return Due Date 
Simplification 
SEC. 6201. DUE DATES FOR RETURNS OF PARTNERSHIPS, S 
CORPORATIONS, AND C CORPORATIONS. 
(a) PARTNERSHIPS AND S CORPORATIONS.— 
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(1) IN GENERAL.—So much of subsection (b) of 
6072 as precedes the second sentence thereof is 
amended to read as follows: 
‘‘(b) RETURNS OF PARTNERSHIPS AND S CORPORA-
TIONS.—Returns of partnerships under section 6031 and 
returns of S corporations under sections 6012 and 6037 
made on the basis of the calendar year shall be filed on 
or before the 15th day of March following the close of the 
calendar year, and such returns made on the basis of a 
fiscal year shall be filed on or before the 15th day of the 
third month following the close of the fiscal year.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6072(a) is amended by striking ‘‘6017, or 6031’’ 
and inserting ‘‘or 6017’’. 
(b) CONFORMING AMENDMENTS RELATING
TO C 
CORPORATION DUE DATE OF 15TH DAY OF FOURTH 
MONTH FOLLOWING TAXABLE YEAR.— 
(1) Section 170(a)(3)(B), as redesignated by 
the preceding provisions of this Act, is amended by 
striking ‘‘third month’’ and inserting ‘‘fourth 
month’’. 
(2) Section 563 is amended by striking ‘‘third 
month’’ each place it appears and inserting ‘‘fourth 
month’’. 
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(3) Section 1354(d)(1)(B)(i) is amended by 
striking ‘‘3d month’’ and inserting ‘‘4th month’’. 
(4) Subsection (a) and (c) of section 6167 are 
each amended by striking ‘‘third month’’ and insert-
ing ‘‘fourth month’’. 
(5) Section 6425(a)(1) is amended by striking 
‘‘third month’’ and inserting ‘‘fourth month’’. 
(6) Subsections (b)(2)(A), (g)(3), and (h)(1) of 
section 6655 are each amended by striking ‘‘3rd 
month’’ and inserting ‘‘4th month’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to returns for taxable years beginning 
after December 31, 2014. 
(2) SPECIAL RULE FOR C CORPORATIONS WITH 
FISCAL YEARS ENDING ON JUNE 30.—In the case of 
any C corporation with a fiscal year ending on June 
30, the amendments made by this section shall not 
apply to any taxable year beginning in 2022. 
SEC. 6202. MODIFICATION OF DUE DATES BY REGULATION. 
In the case of returns for taxable years beginning 
after December 31, 2014, the Secretary of the Treasury, 
or the Secretary’s designee, shall modify appropriate regu-
lations to provide as follows: 
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(1) The maximum extension for the returns of 
partnerships filing Form 1065 shall be a 6-month 
period ending on September 15 for calendar year 
taxpayers. 
(2) The maximum extension for the returns of 
trusts filing Form 1041 shall be a 51⁄2-month period 
ending on September 30 for calendar year taxpayers. 
(3) The maximum extension for the returns of 
employee benefit plans filing Form 5500 shall be an 
automatic 31⁄2-month period ending on November 15 
for calendar year plans. 
(4) The maximum extension for the returns of 
organizations exempt from income tax filing Form 
990 shall be an automatic 6-month period ending on 
November 15 for calendar year filers. 
(5) The due date of Form 3520–A (relating to 
the Annual Information Return of Foreign Trust 
with a United States Owner) for calendar year filers 
shall be April 15 with a maximum extension for a 
6-month period ending on October 15. 
(6) The due date of Form TD F 90–22.1 (re-
lating to Report of Foreign Bank and Financial Ac-
counts) shall be April 15 with a maximum extension 
for a 6-month period ending on October 15 and with 
provision for an extension under rules similar to the 
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rules in Treas. Reg. section 1.6081–5. For any tax-
payer required to file such Form for the first time, 
any penalty for failure to timely request for, or file, 
an extension, may be waived by the Secretary. 
SEC. 6203. CORPORATIONS PERMITTED STATUTORY AUTO-
MATIC 6-MONTH EXTENSION OF INCOME TAX 
RETURNS. 
(a) IN GENERAL.—Section 6081(b) is amended by 
striking ‘‘3 months’’ and inserting ‘‘6 months’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns for taxable years begin-
ning after December 31, 2014. 
Subtitle D—Compliance Reforms 
SEC. 6301. PENALTY FOR FAILURE TO FILE. 
(a) IN GENERAL.—Section 6651(a) is amended by 
striking ‘‘$135’’ in the flush material at the end and in-
serting ‘‘$400’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns the due date for the 
filing of which (including extension) is after December 31, 
2014. 
SEC. 6302. PENALTY FOR FAILURE TO FILE CORRECT IN-
FORMATION RETURNS AND PROVIDE PAYEE 
STATEMENTS. 
(a) IN GENERAL.—Section 6721(a)(1) is amended— 
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(1) by striking ‘‘$100’’ and inserting ‘‘$250’’, 
and 
(2) by striking ‘‘$1,500,000’’ and inserting 
‘‘$3,000,000’’. 
(b) REDUCTION WHERE CORRECTION IN SPECIFIED 
PERIOD.— 
(1) CORRECTION
WITHIN
DAYS.—Section 
6721(b)(1) is amended— 
(A) by striking ‘‘$30’’ and inserting 
‘‘$50’’, 
(B) by striking ‘‘$100’’ and inserting 
‘‘$250’’, and 
(C) by striking ‘‘$250,000’’ and inserting 
‘‘$500,000’’. 
(2) FAILURES CORRECTED ON OR BEFORE AU-
GUST 1.—Section 6721(b)(2) is amended— 
(A) by striking ‘‘$60’’ and inserting 
‘‘$100’’, 
(B) by striking ‘‘$100’’ (prior to amend-
ment by subparagraph (A)) and inserting 
‘‘$250’’, and 
(C) by striking ‘‘$500,000’’ and inserting 
‘‘$1,500,000’’. 
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(c) LOWER LIMITATION FOR PERSONS WITH GROSS 
RECEIPTS OF NOT MORE THAN $5,000,000.—Section 
6721(d)(1) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘$500,000’’ and inserting 
‘‘$1,000,000’’, and 
(B) by striking ‘‘$1,500,000’’ and insert-
ing ‘‘$3,000,000’’, 
(2) in subparagraph (B)— 
(A) by striking ‘‘$75,000’’ and inserting 
‘‘$175,000’’, and 
(B) by striking ‘‘$250,000’’ and inserting 
‘‘$500,000’’, and 
(3) in subparagraph (C)— 
(A) by striking ‘‘$200,000’’ and inserting 
‘‘$500,000’’, and 
(B) by striking ‘‘$500,000’’ (prior to 
amendment by subparagraph (A)) and inserting 
‘‘$1,500,000’’. 
(d) PENALTY
IN
CASE
OF
INTENTIONAL
DIS-
REGARD.—Section 6721(e) is amended— 
(1) by striking ‘‘$250’’ in paragraph (2) and in-
serting ‘‘$500’’, and 
(2) by striking ‘‘$1,500,000’’ in paragraph 
(3)(A) and inserting ‘‘$3,000,000’’. 
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(e) FAILURE TO FURNISH CORRECT PAYEE STATE-
MENTS.— 
(1) 
IN
GENERAL.—Section 
6722(a)(1) 
is 
amended— 
(A) by striking ‘‘$100’’ and inserting 
‘‘$250’’, and 
(B) by striking ‘‘$1,500,000’’ and insert-
ing ‘‘$3,000,000’’. 
(2) REDUCTION WHERE CORRECTION IN SPECI-
FIED PERIOD.— 
(A) CORRECTION WITHIN 30 DAYS.—Sec-
tion 6722(b)(1) is amended— 
(i) by striking ‘‘$30’’ and inserting 
‘‘$50’’, 
(ii) by striking ‘‘$100’’ and inserting 
‘‘$250’’, and 
(iii) by striking ‘‘$250,000’’ and in-
serting ‘‘$500,000’’. 
(B) FAILURES CORRECTED ON OR BEFORE 
AUGUST 1.—Section 6722(b)(2) is amended— 
(i) by striking ‘‘$60’’ and inserting 
‘‘$100’’, 
(ii) by striking ‘‘$100’’ (prior to 
amendment by clause (i)) and inserting 
‘‘$250’’, and 
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(iii) by striking ‘‘$500,000’’ and in-
serting ‘‘$1,500,000’’. 
(3) LOWER
LIMITATION
FOR
PERSONS
WITH 
GROSS RECEIPTS OF NOT MORE THAN $5,000,000.— 
Section 6722(d)(1) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘$500,000’’ and insert-
ing ‘‘$1,000,000’’, and 
(ii) by striking ‘‘$1,500,000’’ and in-
serting ‘‘$3,000,000’’, 
(B) in subparagraph (B)— 
(i) by striking ‘‘$75,000’’ and insert-
ing ‘‘$175,000’’, and 
(ii) by striking ‘‘$250,000’’ and in-
serting ‘‘$500,000’’, and 
(C) in subparagraph (C)— 
(i) by striking ‘‘$200,000’’ and insert-
ing ‘‘$500,000’’, and 
(ii) by striking ‘‘$500,000’’ (prior to 
amendment by subparagraph (A)) and in-
serting ‘‘$1,500,000’’. 
(4) PENALTY IN CASE OF INTENTIONAL DIS-
REGARD.—Section 6722(e) is amended— 
(A) by striking ‘‘$250’’ in paragraph (2) 
and inserting ‘‘$500’’, and 
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(B) by striking ‘‘$1,500,000’’ in paragraph 
(3)(A) and inserting ‘‘$3,000,000’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to returns and state-
ments required to be filed after December 31, 2014. 
SEC. 6303. CLARIFICATION OF 6-YEAR STATUTE OF LIMITA-
TIONS IN CASE OF OVERSTATEMENT OF 
BASIS. 
(a) IN GENERAL.—Subparagraph (B) of section 
6501(e)(1) is amended— 
(1) by striking ‘‘and’’ at the end of clause (i), 
by redesignating clause (ii) as clause (iii), and by in-
serting after clause (i) the following new clause: 
‘‘(ii) An understatement of gross in-
come by reason of an overstatement of un-
recovered cost or other basis is an omission 
from gross income; and’’, and 
(2) by inserting ‘‘(other than in the case of an 
overstatement of unrecovered cost or other basis)’’ 
in clause (iii) (as so redesignated) after ‘‘In deter-
mining the amount omitted from gross income’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
(1) returns filed after the date of the enactment 
of this Act, and 
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(2) returns filed on or before such date if the 
period specified in section 6501 of the Internal Rev-
enue Code of 1986 (determined without regard to 
such amendments) for assessment of the taxes with 
respect to which such return relates has not expired 
as of such date. 
SEC. 6304. REFORM OF RULES RELATED TO QUALIFIED TAX 
COLLECTION CONTRACTS. 
(a) REQUIREMENT TO COLLECT CERTAIN INACTIVE 
TAX RECEIVABLES UNDER QUALIFIED TAX COLLECTION 
CONTRACTS.—Section 6306 is amended by redesignating 
subsections (c) through (f) as subsections (d) through (g), 
respectively, and by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) COLLECTION
OF
INACTIVE
TAX
RECEIV-
ABLES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary shall enter into one 
or more qualified tax collection contracts for the col-
lection of all outstanding inactive tax receivables. 
‘‘(2) INACTIVE
TAX
RECEIVABLES.—For pur-
poses of this section— 
‘‘(A) IN GENERAL.—The term ‘inactive tax 
receivable’ means any tax receivable if— 
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‘‘(i) at any time after assessment, the 
Internal Revenue Service removes such re-
ceivable from the active inventory for lack 
of resources or inability to locate the tax-
payer, 
‘‘(ii) more than 1⁄3 of the period of the 
applicable statute of limitation has lapsed 
and no employee of the Internal Revenue 
Service has been assigned such receivable 
for collection, or 
‘‘(iii) in the case of a receivable which 
has been assigned for collection, more than 
365 days have passed without interaction 
with the taxpayer or a third party for pur-
poses of furthering the collection of such 
receivable. 
‘‘(B) TAX RECEIVABLE.—The term ‘tax re-
ceivable’ means any outstanding assessment 
which the Internal Revenue Service includes in 
potentially collectible inventory.’’. 
(b) CERTAIN TAX RECEIVABLES NOT ELIGIBLE FOR 
COLLECTION UNDER QUALIFIED TAX COLLECTION CON-
TRACTS.—Section 6306, as amended by subsection (a), is 
amended by redesignating subsections (d) through (g) as 
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subsections (e) through (h), respectively, and by inserting 
after subsection (c) the following new subsection: 
‘‘(d) CERTAIN TAX RECEIVABLES NOT ELIGIBLE 
FOR COLLECTION UNDER QUALIFIED TAX COLLECTIONS 
CONTRACTS.—A tax receivable shall not be eligible for col-
lection pursuant to a qualified tax collection contract if 
such receivable— 
‘‘(1) is subject to a pending or active offer-in- 
compromise or installment agreement, 
‘‘(2) is classified as an innocent spouse case, 
‘‘(3) involves a taxpayer identified by the Sec-
retary as being— 
‘‘(A) deceased, 
‘‘(B) under the age of 18, 
‘‘(C) in a designated combat zone, or 
‘‘(D) a victim of identity theft, 
‘‘(4) is currently under examination, litigation, 
criminal investigation, or levy, or 
‘‘(5) is currently subject to a proper exercise of 
a right of appeal under this title.’’. 
(c) CONTRACTING
PRIORITY.—Section 6306, as 
amended by the preceding provisions of this section, is 
amended by redesignating subsection (h) as subsection (i) 
and by inserting after subsection (g) the following new 
subsection: 
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‘‘(h) CONTRACTING PRIORITY.—In contracting for 
the services of any person under this section, the Secretary 
shall give priority to private collection contractors and 
debt collection centers on the schedule required under sec-
tion 3711(g) of title 31, United States Code, to the extent 
such private collection contractors and debt collection cen-
ters are appropriate to carry out the purposes of this sec-
tion.’’. 
(d) DISCLOSURE OF RETURN INFORMATION.—Sec-
tion 6103(k) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) QUALIFIED TAX COLLECTION CONTRAC-
TORS.—Persons providing services pursuant to a 
qualified tax collection contract under section 6306 
may, if speaking to a person who has identified him-
self or herself as having the name of the taxpayer 
to which a tax receivable (within the meaning of 
such section) relates, identify themselves as contrac-
tors of the Internal Revenue Service and disclose the 
business name of the contractor, and the nature, 
subject, and reason for the contact. Disclosures 
under this paragraph shall be made only in such sit-
uations and under such conditions as have been ap-
proved by the Secretary.’’. 
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(e) TAXPAYERS AFFECTED
BY FEDERALLY DE-
CLARED DISASTERS.—Section 6306, as amended by the 
preceding provisions of this section, is amended by redes-
ignating subsection (i) as subsection (j) and by inserting 
after subsection (h) the following new subsection: 
‘‘(i) TAXPAYERS
IN PRESIDENTIALLY DECLARED 
DISASTER AREAS.—The Secretary may prescribe proce-
dures under which a taxpayer determined to be affected 
by a federally declared disaster (as defined by section 
165(i)(5)) may request— 
‘‘(1) relief from immediate collection measures 
by contractors under this section, and 
‘‘(2) a return of the inactive tax receivable to 
the Internal Revenue Service for collection.’’. 
(f) REPORT TO CONGRESS.— 
(1) IN GENERAL.—Section 6306, as amended 
by the preceding provisions of this section, is amend-
ed by redesignating subsection (j) as subsection (k) 
and by inserting after subsection (i) the following 
new subsection: 
‘‘(j) REPORT TO CONGRESS.—Not later than 90 days 
after each fiscal year ending on September 30, the Sec-
retary shall submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on 
Finance of the Senate a report with respect to qualified 
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tax collection contracts under this section which shall in-
clude— 
‘‘(1) annually (with respect to each such fiscal 
year beginning with the first such fiscal year ending 
after the date of the enactment of this subsection)— 
‘‘(A) the total number and amount of tax 
receivables provided to each contractor for col-
lection under this section, 
‘‘(B) the total amounts collected (and 
amounts of installment agreements entered into 
under subsection (b)(1)(B)) with respect to 
each contractor and the collection costs in-
curred (directly and indirectly) by the Internal 
Revenue Service with respect to such amounts, 
‘‘(C) the impact of such contracts on the 
total number and amount of unpaid assess-
ments, and on the number and amount of as-
sessments collected by Internal Revenue Service 
personnel after initial contact by a contractor, 
‘‘(D) the amount of fees retained by the 
Secretary under subsection (e) and a descrip-
tion of the use of such funds, and 
‘‘(E) a disclosure safeguard report in a 
form similar to that required under section 
6103(p)(5), and 
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‘‘(2) biannually (beginning with the second re-
port submitted under this subsection)— 
‘‘(A) an independent evaluation of con-
tractor performance; and 
‘‘(B) a measurement plan that includes a 
comparison of the best practices used by the 
private collectors to the collection techniques 
used by the Internal Revenue Service and 
mechanisms to identify and capture information 
on successful collection techniques used by the 
contractors that could be adopted by the Inter-
nal Revenue Service.’’. 
(2) REPEAL OF EXISTING REPORTING REQUIRE-
MENTS WITH RESPECT TO QUALIFIED TAX COLLEC-
TION
CONTRACTS.—Section 881 of the American 
Jobs Creation Act of 2004 is amended by striking 
subsection (e). 
(g) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendments made by 
subsections (a) and (b) shall apply to tax receivables 
identified by the Secretary after the date of the en-
actment of this Act. 
(2) CONTRACTING PRIORITY.—The amendments 
made by subsection (c) shall apply to contracts and 
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agreements entered into after the date of the enact-
ment of this Act. 
(3) DISCLOSURES.—The amendments made by 
subsection (d) shall apply to disclosures made after 
the date of the enactment of this Act. 
(4) PROCEDURES; REPORT TO CONGRESS.—The 
amendments made by subsections (e) and (f) shall 
take effect on the date of the enactment of this Act. 
SEC. 6305. 100 PERCENT CONTINUOUS LEVY ON PAYMENTS 
TO MEDICARE PROVIDERS AND SUPPLIERS. 
(a) IN GENERAL.—Paragraph (3) of section 6331(h) 
is amended by striking the period at the end and inserting 
‘‘, or to a Medicare provider or supplier under title XVIII 
of the Social Security Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to levies issued after the date of 
the enactment of this Act. 
SEC. 6306. TREATMENT OF REFUNDABLE CREDITS FOR 
PURPOSES OF CERTAIN PENALTIES. 
(a) APPLICATION OF UNDERPAYMENT PENALTIES.— 
Section 6664(a) is amended by adding at the end the fol-
lowing: ‘‘A rule similar to the rule of section 6211(b)(4) 
shall apply for purposes of this subsection.’’. 
(b) PENALTY FOR ERRONEOUS CLAIM OF CREDIT 
MADE APPLICABLE TO EARNED INCOME CREDIT.—Sec-
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tion 6676(a) is amended by striking ‘‘(other than a claim 
for a refund or credit relating to the earned income credit 
under section 32)’’. 
(c) EFFECTIVE DATES.— 
(1) UNDERPAYMENT PENALTIES.—The amend-
ment made by subsection (a) shall apply to— 
(A) returns filed after February 26, 2014, 
and 
(B) returns filed on or before such date if 
the period specified in section 6501 of the In-
ternal Revenue Code of 1986 for assessment of 
the taxes with respect to which such return re-
lates has not expired as of such date. 
(2) PENALTY FOR ERRONEOUS CLAIM OF CRED-
IT.—The amendment made by subsection (b) shall 
apply to claims filed after February 26, 2014. 
TITLE VII—EXCISE TAXES 
SEC. 7001. REPEAL OF MEDICAL DEVICE EXCISE TAX. 
(a) IN GENERAL.—Chapter 32 is amended by strik-
ing subchapter E. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 4221 is amended 
by striking the last sentence. 
(2) Paragraph (2) of section 6416(b) is amend-
ed by striking the last sentence. 
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(c) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 32 is amended by striking the item 
relating to subchapter E. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
SEC. 7002. MODIFICATIONS RELATING TO OIL SPILL LI-
ABILITY TRUST FUND. 
(a) EXTENSION
OF OIL SPILL LIABILITY TRUST 
FUND
FINANCING
RATE.—Paragraph (2) of section 
4611(f) is amended by striking ‘‘December 31, 2017’’ and 
inserting ‘‘December 31, 2023’’. 
(b) APPLICATION WITH RESPECT TO BITUMEN AND 
BITUMINOUS MIXTURES
AND SHALE OIL.—Paragraph 
(1) of section 4612(a) is amended to read as follows: 
‘‘(1) CRUDE OIL.—The term ‘crude oil’ includes 
crude oil condensates, natural gasoline, any bitumen 
or bituminous mixture, any oil derived from a bitu-
men or bituminous mixture, shale oil, and any oil de-
rived from kerogen-bearing sources.’’. 
(c) CONFORMING AMENDMENT.—Paragraph (2) of 
section 4612(a) is amended by striking ‘‘from a well lo-
cated’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to oil and petroleum products re-
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ceived or entered during calendar quarters beginning more 
than 60 days after the date of the enactment of this Act. 
SEC. 7003. MODIFICATION RELATING TO INLAND WATER-
WAYS TRUST FUND FINANCING RATE. 
(a) IN GENERAL.—Section 4042(b)(2)(A) is amend-
ed to read as follows: 
‘‘(A) The Inland Waterways Trust Fund 
financing rate is 26 cents per gallon.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to fuel used after December 31, 
2014. 
SEC. 7004. EXCISE TAX ON SYSTEMICALLY IMPORTANT FI-
NANCIAL INSTITUTIONS. 
(a) IN GENERAL.—Chapter 36 is amended by adding 
at the end the following new subchapter: 
‘‘Subchapter E—Tax on Systemically 
Important Financial Institutions 
‘‘Sec. 4491. Tax on systemically important financial institutions. 
‘‘SEC. 4491. TAX ON SYSTEMICALLY IMPORTANT FINANCIAL 
INSTITUTIONS. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on the excess total consolidated assets of any systemically 
important financial institution on the close of each cal-
endar quarter. 
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‘‘(b) AMOUNT OF TAX.—The rate of tax imposed by 
subsection (a) is 0.035 percent of such excess total consoli-
dated assets. 
‘‘(c) BY WHOM PAID.—The tax imposed by sub-
section (a) shall be paid by the systemically important fi-
nancial institution. 
‘‘(d) DUE DATE.—The tax imposed by subsection (a) 
for a calendar quarter shall be due on the first day of 
the third month beginning after the close of such quarter. 
‘‘(e) SYSTEMICALLY IMPORTANT FINANCIAL INSTI-
TUTION.—For purposes of this section, the term ‘system-
ically important financial institution’ means any person 
subject to section 165 of the Dodd-Frank Wall Street Re-
form and Consumer Protection Act. 
‘‘(f) EXCESS TOTAL CONSOLIDATED ASSETS.—For 
purposes of this section, the term ‘excess total consoli-
dated assets’ means the excess of— 
‘‘(1) total consolidated assets (within the mean-
ing of section 165 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act), over 
‘‘(2) $500,000,000,000. 
‘‘(g) ADJUSTMENT OF DOLLAR AMOUNT.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year beginning after 2015, there shall be substituted 
for the dollar amount in subsection (f)(2) a dollar 
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amount which bears the same ratio to such amount 
(determined without regard to this subsection) as— 
‘‘(A) the GDP for the preceding calendar 
year, bears to 
‘‘(B) the GDP for 2014. 
Any dollar amount determined under this paragraph 
for substitution in subsection (f)(2) which is not a 
multiple of $1,000,000,000 shall be rounded to the 
nearest multiple of $1,000,000,000. 
‘‘(2) GDP.—For purposes of this subsection, 
the GDP for any calendar year means the latest es-
timate of the gross domestic product published by 
the Department of Commerce for the preceding cal-
endar year. 
‘‘(h) TREATMENT OF CERTAIN REFERENCES.—Any 
reference in this section to any provision of the Dodd- 
Frank Wall Street Reform and Consumer Protection Act 
shall be treated as a reference to such provision as in ef-
fect on the date of the enactment of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 36 is amended by adding at the end 
the following new item: 
‘‘SUBCHAPTER E. TAX ON SYSTEMICALLY IMPORTANT FINANCIAL 
INSTITUTIONS.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar quarters beginning 
after December 31, 2014. 
SEC. 7005. CLARIFICATION OF ORPHAN DRUG EXCEPTION 
TO ANNUAL FEE ON BRANDED PRESCRIP-
TION PHARMACEUTICAL MANUFACTURERS 
AND IMPORTERS. 
(a) IN GENERAL.—Paragraph (3) of section 9008(e) 
of the Patient Protection and Affordable Care Act (Public 
Law 111–148) is amended to read as follows: 
‘‘(3) EXCLUSION OF ORPHAN DRUG SALES.— 
‘‘(A) IN
GENERAL.—The term ‘branded 
prescription drug sales’ shall not include sales 
of any drug or biological product— 
‘‘(i) with respect to which a credit was 
allowed for any taxable year under section 
45C of the Internal Revenue Code of 1986 
(as in effect before its repeal by the Tax 
Reform Act of 2014); or 
‘‘(ii) which is approved or licensed by 
the Food and Drug Administration for 
marketing solely for one or more rare dis-
eases or conditions. 
‘‘(B) 
LIMITATION.—Subparagraph 
(A) 
shall not apply with respect to any drug or bio-
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logical product after the date on which the drug 
or biological product is approved or licensed by 
the Food and Drug Administration for mar-
keting for any indication other than the treat-
ment of a rare disease or condition. 
‘‘(C) RARE DISEASE OR CONDITION.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘rare disease or 
condition’ means any disease or condition 
which— 
‘‘(I) affects less than 200,000 
persons in the United States, or 
‘‘(II) affects more than 200,000 
persons in the United States but for 
which there is no reasonable expecta-
tion that the cost of developing and 
making available in the United States 
a drug or biological product for such 
disease or condition will be recovered 
from sales in the United States of 
such drug or biological product. 
‘‘(ii) TIME OF DETERMINATION.—De-
terminations under the preceding sentence 
with respect to any drug or biological prod-
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uct shall be made on the basis of the facts 
and circumstances as of— 
‘‘(I) in the case a drug or biologi-
cal product that has been designated 
under section 526 of the Federal 
Food, Drug, and Cosmetic Act for a 
particular indication, the date of such 
designation, and 
‘‘(II) in any other case, the date 
such drug or biological product is ap-
proved or licensed by the Food and 
Drug Administration for marketing 
for the treatment of the disease or 
condition referred to in clause (i).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to fees imposed under section 
9008(a)(1) of the Patient Protection and Affordable Care 
Act with annual payment dates after 2013. 
TITLE VIII—DEADWOOD AND 
TECHNICAL PROVISIONS 
Subtitle A—Repeal of Deadwood 
SEC. 8001. REPEAL OF PUERTO RICO ECONOMIC ACTIVITY 
CREDIT. 
Subpart B of part IV of subchapter A of chapter 1 
is amended by striking section 30A (and by striking the 
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item relating to such section in the table of sections of 
such subpart). 
SEC. 8002. REPEAL OF MAKING WORK PAY CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 is amended by striking section 36A 
(and by striking the item relating to such section in the 
table of sections of such subpart). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) is amended by strik-
ing ‘‘36A,’’. 
(2) Section 6213(g)(2) is amended by striking 
subparagraph (N). 
SEC. 8003. GENERAL BUSINESS CREDIT. 
Subsection (d) of section 38 is amended by striking 
paragraph (3). 
SEC. 8004. ENVIRONMENTAL TAX. 
(a) IN GENERAL.—Subchapter A of chapter 1 is 
amended by striking part VII (and the table of parts for 
such chapter is amended by striking the item relating to 
part VII). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) is amended by striking 
subparagraph (B). 
(2) Section 164(a) is amended by striking para-
graph (5). 
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SEC. 8007. FLEXIBLE SPENDING ARRANGEMENTS. 
Section 106(c)(1) is amended by striking ‘‘Effective 
on and after January 1, 1997, gross’’ and inserting 
‘‘Gross’’. 
SEC. 8008. CERTAIN COMBAT ZONE COMPENSATION OF 
MEMBERS OF THE ARMED FORCES. 
Subsection (c) of section 112 is amended— 
(1) by striking ‘‘(after June 24, 1950)’’ in 
paragraph (2), and 
(2) striking ‘‘such zone;’’ and all that follows in 
paragraph (3) and inserting ‘‘such zone.’’. 
SEC. 8009. QUALIFIED GROUP LEGAL SERVICES PLANS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 is amended by striking section 120 (and by striking 
the item relating to such section in the table of sections 
for such part). 
(b) TAX-EXEMPTION OF GROUP LEGAL SERVICES 
PLANS.—Section 501(c) is amended by striking paragraph 
(20). 
(c) CONFORMING AMENDMENTS.— 
(1) Section 414(n)(3)(C) is amended by strik-
ing ‘‘120,’’. 
(2) Section 414(t)(2) is amended by striking 
‘‘120,’’. 
(3) Section 3121(a) is amended by striking 
paragraph (17). 
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(4) Section 3231(e) is amended by striking 
paragraph (7). 
(5) Section 3306(b) is amended by striking 
paragraph (12). 
(6) Section 6039D(d)(1) is amended by striking 
‘‘120,’’. 
(7) Section 209(a)(14) of the Social Security 
Act is amended— 
(A) by striking subparagraph (B), and 
(B) by striking ‘‘(14)(A)’’ and inserting 
‘‘(14)’’. 
SEC. 8010. CERTAIN REDUCED UNIFORMED SERVICES RE-
TIREMENT PAY. 
Section 122(b)(1) is amended by striking ‘‘after De-
cember 31, 1965,’’. 
SEC. 8011. GREAT PLAINS CONSERVATION PROGRAM. 
Section 126(a) is amended by striking paragraph (6) 
and by redesignating paragraphs (7),(8), (9), and (10) as 
paragraphs (6), (7), (8), and (9), respectively. 
SEC. 8012. STATE LEGISLATORS’ TRAVEL EXPENSES AWAY 
FROM HOME. 
Paragraph (4) of section 162(h) is amended by strik-
ing ‘‘For taxable years beginning after December 31, 
1980, this’’ and inserting ‘‘This’’. 
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SEC. 8013. TREBLE DAMAGE PAYMENTS UNDER THE ANTI-
TRUST LAW. 
Section 162(g) is amended by striking the last sen-
tence. 
SEC. 8014. PHASE-IN OF LIMITATION ON INVESTMENT IN-
TEREST. 
Section 163(d) is amended by striking paragraph (6). 
SEC. 8015. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS. 
Section 170 is amended by striking subsection (k). 
SEC. 8016. AMORTIZABLE BOND PREMIUM. 
(a) IN GENERAL.—Subparagraph (B) of section 
171(b)(1) is amended to read as follows: 
‘‘(B)(i) with reference to the amount pay-
able on maturity (or if it results in a smaller 
amortizable bond premium attributable to the 
period before the call date, with reference to the 
amount payable on the earlier call date), in the 
case of a bond described in subsection (a)(1), 
and 
‘‘(ii) with reference to the amount payable 
on maturity or on an earlier call date, in the 
case of a bond described in subsection (a)(2).’’. 
(b) 
CONFORMING
AMENDMENTS.—Paragraphs 
(2)(B) and (3)(B) of section 171(b) are each amended by 
striking ‘‘paragraph (1)(B)(ii)’’ and inserting ‘‘paragraph 
(1)(B)(i)’’. 
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SEC. 8017. REPEAL OF DEDUCTION FOR CLEAN-FUEL VEHI-
CLES AND CERTAIN REFUELING PROPERTY. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 is amended by striking section 179A (and by striking 
the item relating to such section in the table of sections 
for such part). 
(b) CONFORMING AMENDMENT.— 
(1) Section 62(a) is amended by striking para-
graph (14). 
(2) Section 280F(a)(1) is amended by striking 
subparagraph (C). 
(3) Section 312(k)(3), as amended by this Act, 
is amended by striking ‘‘, 179A’’ each place it ap-
pears. 
(4) Section 1016(a) is amended by striking 
paragraph (24). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2005. 
SEC. 8018. REPEAL OF DEDUCTION FOR CAPITAL COSTS IN-
CURRED 
IN 
COMPLYING 
WITH 
ENVIRON-
MENTAL PROTECTION AGENCY SULFUR REG-
ULATIONS. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 is amended by striking section 179B (and by striking 
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the item relating to such section in the table of sections 
for such part). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 312(k)(3), as amended by this Act, 
is amended by striking ‘‘, 179B’’ each place it ap-
pears. 
(2) Section 1016(a) is amended by striking 
paragraph (30). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
December 31, 2009. 
SEC. 8019. ACTIVITIES NOT ENGAGED IN FOR PROFIT. 
Section 183(e)(1) is amended by striking the last sen-
tence. 
SEC. 8020. DIVIDENDS RECEIVED ON CERTAIN PREFERRED 
STOCK; AND DIVIDENDS PAID ON CERTAIN 
PREFERRED STOCK OF PUBLIC UTILITIES. 
(a) IN GENERAL.—Sections 244 and 247 are hereby 
repealed, and the table of sections for part VIII of sub-
chapter B of chapter 1 is amended by striking the items 
relating to sections 244 and 247. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (5) of section 172(d) is amended 
to read as follows: 
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‘‘(5) COMPUTATION OF DEDUCTION FOR DIVI-
DENDS RECEIVED.—The deductions allowed by sec-
tion 243 (relating to dividends received by corpora-
tions) and 245 (relating to dividends received from 
certain foreign corporations) shall be computed with-
out regard to section 246(b) (relating to limitation 
on aggregate amount of deductions).’’. 
(2) Paragraph (1) of section 243(c) is amended 
to read as follows: 
‘‘(1) IN GENERAL.—In the case of any dividend 
received from a 20-percent owned corporation, sub-
section (a)(1) shall be applied by substituting ‘80 
percent’ for ‘70 percent’ ’’.’’. 
(3) Section 243(d) is amended by striking para-
graph (4). 
(4) Section 246 is amended— 
(A) by striking ‘‘, 244,’’ in subsection 
(a)(1), 
(B) in subsection (b)(1)— 
(i) by striking ‘‘sections 243(a)(1), 
244(a),’’ the first place it appears and in-
serting ‘‘section 243(a)(1)’’, 
(ii) by striking ‘‘244(a),’’ the second 
place it appears, and 
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(iii) by striking ‘‘subsection (a) or (b) 
of section 245, and 247,’’ and inserting 
‘‘and subsection (a) or (b) of section 
245,’’, and 
(C) by striking ‘‘, 244,’’ in subsection 
(c)(1). 
(5) Section 246A is amended by striking ‘‘, 
244,’’ both places it appears in subsections (a) and 
(e). 
(6) 
Sections 
263(g)(2)(B)(iii), 
277(a), 
301(e)(2), 469(e)(4), 512(a)(3)(A), 805(a)(4)(A), 
(C), and (D), 805(b)(4) (as redesignated by this 
Act), 
832(b)(5)(B)(ii), 
(D)(i), 
and 
(D)(ii)(I), 
833(b)(3)(E), and 1059(b)(2)(B) are each amended 
by striking ‘‘, 244,’’ each place it appears. 
(7) Section 805(a)(4)(B) is amended by strik-
ing ‘‘, 244(a),’’ each place it appears. 
(8) Section 810(c)(2)(B) is amended by striking 
‘‘244 (relating to dividends on certain preferred 
stock of public utilities),’’. 
(9) Section 1244(c)(2)(C) is amended by strik-
ing ‘‘244,’’. 
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SEC. 8021. ACQUISITIONS MADE TO EVADE OR AVOID IN-
COME TAX. 
Paragraphs (1) and (2) of section 269(a) are each 
amended by striking ‘‘or acquired on or after October 8, 
1940,’’. 
SEC. 8022. DISTRIBUTIONS OF PROPERTY. 
Paragraph (3) of section 301(c) is amended to read 
as follows: 
‘‘(3) AMOUNTS
IN
EXCESS
OF
BASIS.—That 
portion of the distribution which is not a dividend, 
to the extent that it exceeds the adjusted basis of 
the stock, shall be treated as gain from the sale or 
exchange of property.’’. 
SEC. 8023. EFFECT ON EARNINGS AND PROFITS. 
Subsection (d) of section 312 is amended by striking 
paragraph (2) and redesignating paragraph (3) as para-
graph (2). 
SEC. 8024. BASIS TO CORPORATIONS. 
Section 362(a) is amended by striking ‘‘on or after 
June 22, 1954,’’. 
SEC. 8025. TAX CREDIT EMPLOYEE STOCK OWNERSHIP 
PLANS. 
Section 409 is amended by striking subsection (q). 
SEC. 8026. EMPLOYEE STOCK PURCHASE PLANS. 
Section 423(a) is amended by striking ‘‘after Decem-
ber 31, 1963’’. 
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(B) by adding at the end the following new 
paragraphs: 
‘‘(3) FARMING.—For purposes of this sub-
section, the term ‘farming’ has the meaning given to 
such term by section 464(e). 
‘‘(4) LIMITED ENTREPRENEUR.—For purposes 
of this subsection, the term ‘limited entrepreneur’ 
means a person who— 
‘‘(A) has an interest in an enterprise other 
than as a limited partner, and 
‘‘(B) does not actively participate in the 
management of such enterprise.’’. 
(C) Paragraph (4) of section 461(i) is 
amended by striking ‘‘section 464(c)’’ and in-
serting ‘‘subsection (j)’’. 
(c) Section 464 is amended— 
(1) by striking subsections (e) and (g) and re-
designating subsections (d) and (f) as subsections 
(c) and (d), respectively, and 
(2) by inserting after subsection (d) the fol-
lowing new subsection: 
‘‘(e) FARMING.—For purposes of this section, the 
term ‘farming’ means the cultivation of land or the raising 
or harvesting of any agricultural or horticultural com-
modity including the raising, shearing, feeding, caring for, 
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training, and management of animals. For purposes of the 
preceding sentence, trees (other than trees bearing fruit 
or nuts) shall not be treated as an agricultural or horti-
cultural commodity.’’. 
(d) Subsection (d) of section 464 of such Code, as 
redesignated by subsection (c), is amended— 
(1) by striking paragraph (1) and redesignating 
paragraphs (2), (3), and (4) as paragraphs (1), (2), 
and (3), respectively, and 
(2) by striking ‘‘SUBSECTIONS (A) AND (B) 
TO APPLY TO’’ in the subsection heading. 
(e) Subparagraph (A) of section 58(a)(2) is amended 
by striking ‘‘section 464(c)’’ and inserting ‘‘section 
461(j)’’. 
SEC. 8029. DEDUCTIONS LIMITED TO AMOUNT AT RISK. 
Paragraph (3) of section 465(c) is amended by strik-
ing ‘‘In the case of taxable years beginning after Decem-
ber 31, 1978, this’’ and inserting ‘‘This’’. 
SEC. 8030. PASSIVE ACTIVITY LOSSES AND CREDITS LIM-
ITED. 
Section 469 is amended by striking subsection (m). 
SEC. 8031. ADJUSTMENTS REQUIRED BY CHANGES IN 
METHOD OF ACCOUNTING. 
Section 481(b)(3) is amended by striking subpara-
graph (C). 
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SEC. 8032. EXEMPTION FROM TAX ON CORPORATIONS, CER-
TAIN TRUSTS, ETC. 
Section 501 is amended by striking subsection (s). 
SEC. 8033. REQUIREMENTS FOR EXEMPTION. 
(a) Section 503(a)(1) is amended to read as follows: 
‘‘(1) GENERAL
RULE.—An organization de-
scribed in paragraph (17) or (18) of section 501(c) 
or described in section 401(a) and referred to in sec-
tion 4975(g)(2) or (3) shall not be exempt from tax-
ation under section 501(a) if it has engaged in a 
prohibited transaction.’’. 
(b) Paragraph (2) of section 503(a) is amended by 
striking ‘‘described in section 501(c)(17) or (18) or para-
graph (a)(1)(B)’’ and inserting ‘‘described in paragraph 
(1)’’. 
(c) Subsection (c) of section 503 is amended by strik-
ing ‘‘described in section 501(c)(17) or (18) or subsection 
(a)(1)(B)’’ and inserting ‘‘described in subsection (a)(1)’’. 
SEC. 8034. REPEAL OF SPECIAL TREATMENT FOR RELI-
GIOUS BROADCASTING COMPANY. 
(a) IN GENERAL.—Subsection (b) of section 512 is 
amended by striking paragraph (15). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 8035. REPEAL OF EXCLUSION OF GAIN OR LOSS FROM 
DISPOSITION OF BROWNFIELD PROPERTY. 
(a) IN GENERAL.—Subsection (b) of section 512 is 
amended by striking paragraph (19). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property acquired after Decem-
ber 31, 2009. 
SEC. 8036. ACCUMULATED TAXABLE INCOME. 
Paragraph (1) of section 535(b) and paragraph (1) 
of section 545(b) are each amended by striking ‘‘section 
531’’ and all that follows and inserting ‘‘section 531 or 
the personal holding company tax imposed by section 
541.’’. 
SEC. 8037. CERTAIN PROVISIONS RELATED TO DEPLETION. 
(a) Section 614(b)(3) (before being redesignated by 
title III) is amended by striking subparagraph (C). 
(b) Section 614(b)(4) (before being redesignated by 
title III) is amended by striking ‘‘whichever of the fol-
lowing taxable years is the later: The first taxable year 
beginning after December 31, 1963, or’’. 
(c) Section 614(b) (before being redesignated by title 
III) is amended by striking paragraph (5). 
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SEC. 8038. AMOUNTS RECEIVED BY SURVIVING ANNUITANT 
UNDER JOINT AND SURVIVOR ANNUITY CON-
TRACT. 
Subparagraph (A) of section 691(d)(1) is amended 
by striking ‘‘after December 31, 1953, and’’. 
SEC. 8039. INCOME TAXES OF MEMBERS OF ARMED FORCES 
ON DEATH. 
Section 692(a)(1) is amended by striking ‘‘after June 
24, 1950’’. 
SEC. 8040. SPECIAL RULES FOR COMPUTING RESERVES. 
Paragraph (7) of section 807(e) is amended by strik-
ing subparagraph (B) and redesignating subparagraph 
(C) as subparagraph (B). 
SEC. 8041. INSURANCE COMPANY TAXABLE INCOME. 
(a) Section 832(e) is amended by striking ‘‘of taxable 
years beginning after December 31, 1966,’’. 
(b) Section 832(e)(6) is amended by striking ‘‘In the 
case of any taxable year beginning after December 31, 
1970, the’’ and inserting ‘‘The’’. 
SEC. 8042. CAPITALIZATION OF CERTAIN POLICY ACQUISI-
TION EXPENSES. 
Section 848 (as amended by title II) is amended by 
striking subsection (i). 
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SEC. 8043. REPEAL OF PROVISION ON EXPATRIATION TO 
AVOID TAX. 
(a) IN GENERAL.—Subpart A of part II of sub-
chapter N of chapter 1 is amended by striking section 877 
(and by striking the item relating to such section in the 
table of sections for such subpart). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 2(d) is amended by striking ‘‘or 
877’’. 
(2) Section 121 is amended by striking sub-
section (e). 
(3) Section 865(j)(3) is amended by inserting 
‘‘as in effect before its repeal’’ after ‘‘section 877’’. 
(4) Paragraph (2) of section 871(o) (as amend-
ed by this Act) is amended to read as follows: 
‘‘(2) For taxation of covered expatriates, see 
section 877A.’’. 
(5)(A) Section 877A(g)(1)(A) is amended to 
read as follows: 
‘‘(A) IN GENERAL.—The term ‘covered ex-
patriate’ means any expatriate if— 
‘‘(i) the average annual net income 
tax of such individual for the period of 5 
taxable years ending before the date of the 
loss of United States citizenship is greater 
than $124,000, 
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‘‘(ii) the net worth of the individual as 
of such date is $2,000,000 or more, or 
‘‘(iii) such individual fails to certify 
under penalty of perjury that he has met 
the requirements of this title for the 5 pre-
ceding taxable years or fails to submit such 
evidence of such compliance as the Sec-
retary may require.’’. 
(B) Section 877A(g)(1)(B) is amended by strik-
ing ‘‘shall not be treated as meeting the require-
ments of subparagraph (A) or (B) of section 
877(a)(2)’’ and inserting ‘‘shall not be treated as de-
scribed in clause (i) or (ii) of subparagraph (A)’’. 
(C) Section 877A(g)(1) is amended by redesig-
nating subparagraph (C) as subparagraph (D) and 
inserting after subparagraph (B) the following new 
subparagraph: 
‘‘(C) NET INCOME TAX.—For purposes of 
subparagraph (A), the term ‘net income tax’ 
means the regular tax liability reduced by the 
credits allowed under subparts A, B, and D of 
part IV of subchapter A.’’. 
(D) Section 877A(g)(1), as amended by sub-
paragraph (C), is amended by adding at the end the 
following new subparagraph: 
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‘‘(E) INFLATION
ADJUSTMENT.—In the 
case of the loss of United States citizenship in 
any calendar year after 2007, the dollar amount 
in subparagraph (A)(i) shall be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(c)(2)(A) for the 
calendar year in which such loss of United 
States citizenship occurs determined by 
substituting ‘calendar year 2003’ for ‘cal-
endar year 2012’ in clause (ii) thereof. 
Any increase determined under the preceding 
sentence shall be rounded to the nearest mul-
tiple of $1,000.’’. 
(E) Section 877A(g)(5) is amended to read as 
follows: 
‘‘(5) LONG-TERM RESIDENT.—The term ‘long- 
term resident’ means any individual (other than a 
citizen of the United States) who is a lawful perma-
nent resident of the United States in at least 8 tax-
able years during the period of 15 taxable years end-
ing with the taxable year during which the event de-
scribed in subparagraph (A) or (B) of paragraph (2) 
occurs. For purposes of the preceding sentence, an 
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individual shall not be treated as a lawful permanent 
resident for any taxable year if such individual is 
treated as a resident of a foreign country for the 
taxable year under the provisions of a tax treaty be-
tween the United States and the foreign country and 
does not waive the benefits of such treaty applicable 
to residents of the foreign country.’’. 
(6) Section 894(b) is amended by striking the 
last sentence. 
(7) Section 2107 is amended by striking sub-
section (e). 
(8) Section 2501(a) is amended by striking 
paragraphs (3) and (5) and by redesignating para-
graph (4) as paragraph (3). 
(9) Section 3405(e)(13)(B) is amended by 
striking ‘‘that such person is not—’’ and all that fol-
lows and inserting ‘‘that such person is not a United 
States citizen or a resident alien of the United 
States.’’. 
(10) Section 6039G(a) is amended by striking 
‘‘section 877(b) or 877A’’ and inserting ‘‘section 
877A’’. 
(11) Section 6039G(d) is amended by striking 
‘‘section 877(a) or 877A’’ and inserting ‘‘section 
877A’’. 
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(12) Section 7701(b) is amended by striking 
paragraph (10) and by redesignating paragraph (11) 
as paragraph (10). 
(c) EFFECTIVE DATE.—The amendments made by 
this subsection shall apply to individuals whose expatria-
tion date (as defined in section 877A(g)(3) of the Internal 
Revenue Code of 1986) is on or after June 17, 2008. 
SEC. 8044. REPEAL OF CERTAIN TRANSITION RULES ON IN-
COME FROM SOURCES WITHOUT UNITED 
STATES. 
(a) LIMITATION ON CREDIT.—Paragraph (2) of sec-
tion 904(d) is amended by striking subparagraph (J). 
(b) FOREIGN EARNED INCOME.—Clause (i) of section 
911(b)(2)(D) is amended to read as follows: 
‘‘(i) IN
GENERAL.—The exclusion 
amount for any calendar year is $80,000.’’. 
SEC. 8045. REPEAL OF PUERTO RICO AND POSSESSION TAX 
CREDIT. 
(a) IN GENERAL.—Subpart D of part III of sub-
chapter N of chapter 1 is amended by striking section 936 
(and by striking the item relating to such section in the 
table of sections of such subpart). 
(b) CONFORMING AMENDMENTS.— 
(1)(A) Section 27 is amended to read as fol-
lows: 
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‘‘SEC. 27. TAXES OF FOREIGN COUNTRIES AND POSSES-
SIONS OF THE UNITED STATES. 
‘‘The amount of taxes imposed by foreign countries 
and possessions of the United States shall be allowed as 
a credit against the tax imposed by this chapter to the 
extent provided in section 901.’’. 
(B) The item relating to section 27 in the table 
of sections for subpart B of part IV of subchapter 
A of chapter 1 is amended to read as follows: 
‘‘Sec. 27. Taxes of foreign countries and possessions of the United States.’’. 
(2) Section 243(b)(1)(B) is amended to read as 
follows: 
‘‘(B) if such dividend is distributed out of 
the earnings and profits of a taxable year of the 
distributing corporation which ends after De-
cember 31, 1963, and on each day of which the 
distributing corporation and the corporation re-
ceiving the dividend were members of such af-
filiated group.’’. 
(3) Section 246 is amended by striking sub-
section (e). 
(4) Section 338(h)(6)(B)(i) is amended by 
striking ‘‘, a DISC, or a corporation to which an 
election under section 936 applies’’ and inserting ‘‘or 
a DISC’’. 
(5) Section 861(a)(2) is amended— 
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(A) by striking subparagraph (A) and by 
redesignating subparagraphs (B), (C), and (D) 
as subparagraphs (A), (B), and (C), respec-
tively, and 
(B) by striking ‘‘subparagraph (B)’’ each 
place it appears and inserting ‘‘subparagraph 
(A)’’. 
(6) Section 864(d)(5) is amended to read as fol-
lows: 
‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.— 
The following provisions shall not apply to any 
amount treated as interest under paragraph (1) or 
(6): 
‘‘(A) Section 904(d)(2)(B)(iii)(I) (relating 
to exceptions for export financing interest). 
‘‘(B) 
Subparagraph 
(A) 
of 
section 
954(b)(3) (relating to exception where foreign 
base company income is less than 5 percent or 
$1,000,000). 
‘‘(C) 
Subparagraph 
(B) 
of 
section 
954(c)(2) (relating to certain export financing). 
‘‘(D) Clause (i) of section 954(c)(3)(A) 
(relating to certain income received from related 
persons).’’. 
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(d) The amendments made by this section shall apply 
to bonds and coupons purchased after July 1, 1982. 
SEC. 8058. AMOUNT AND METHOD OF ADJUSTMENT. 
Section 1314 is amended by striking subsection (d) 
and by redesignating subsection (e) as subsection (d). 
SEC. 8059. OLD-AGE, SURVIVORS, AND DISABILITY INSUR-
ANCE. 
Subsection (a) of section 1401 is amended by striking 
‘‘the following percent’’ and all that follows and inserting 
‘‘12.4 percent of the amount of the self-employment in-
come for such taxable year.’’. 
SEC. 8060. HOSPITAL INSURANCE. 
Paragraph (1) of section 1401(b) is amended by 
striking ‘‘the following percent’’and all that follows and 
inserting ‘‘2.9 percent of the amount of the self-employ-
ment income for such taxable year.’’. 
SEC. 8061. MINISTERS, MEMBERS OF RELIGIOUS ORDERS, 
AND CHRISTIAN SCIENCE PRACTITIONERS. 
Paragraph (3) of section 1402(e) is amended by 
striking ‘‘whichever of the following dates is later: (A)’’ 
and by striking ‘‘; or (B)’’ and all that follows and insert-
ing a period. 
SEC. 8062. AFFILIATED GROUP DEFINED. 
Subparagraph (A) of section 1504(a)(3) is amended 
by striking ‘‘for a taxable year which includes any period 
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