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‘‘(4) EXPANDED AFFILIATED GROUP.—The term
‘expanded affiliated group’ means an affiliated group
(as defined in section 1504(a) without regard to sec-
tion 1504(b)(3)); except that section 1504(a) shall be
applied by substituting ‘more than 50 percent’ for ‘at
least 80 percent’ each place it appears.
‘‘(f) SPECIAL RULES.—For purposes of this section—
‘‘(1) CANCELLATION OF RESTRICTION.—The can-
cellation of a restriction which by its terms will never
lapse shall be treated as a grant.
‘‘(2) PAYMENT OR REIMBURSEMENT OF TAX BY
CORPORATION TREATED AS SPECIFIED STOCK COM-
PENSATION.—Any payment of the tax imposed by this
section directly or indirectly by the inverted corpora-
tion or by any member of the expanded affiliated
group which includes such corporation—
‘‘(A) shall be treated as specified stock com-
pensation, and
‘‘(B) shall not be allowed as a deduction
under any provision of chapter 1.
‘‘(3) CERTAIN RESTRICTIONS IGNORED.—Wheth-
er there is specified stock compensation, and the value
thereof, shall be determined without regard to any re-
striction other than a restriction which by its terms
will never lapse.
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‘‘(4) PROPERTY
TRANSFERS.—Any transfer of
property shall be treated as a payment and any right
to a transfer of property shall be treated as a right
to a payment.
‘‘(5) OTHER ADMINISTRATIVE PROVISIONS.—For
purposes of subtitle F, any tax imposed by this sec-
tion shall be treated as a tax imposed by subtitle A.
‘‘(g) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section.’’.
(b) DENIAL OF DEDUCTION.—
(1) IN
GENERAL.—Paragraph (6) of section
275(a) is amended by inserting ‘‘48,’’ after ‘‘46,’’.
(2) $1,000,000 LIMIT
ON
DEDUCTIBLE
COM-
PENSATION REDUCED BY PAYMENT OF EXCISE TAX ON
SPECIFIED STOCK COMPENSATION.—Paragraph (4) of
section 162(m) is amended by adding at the end the
following new subparagraph:
‘‘(G) COORDINATION WITH EXCISE TAX ON
SPECIFIED
STOCK
COMPENSATION.—The dollar
limitation contained in paragraph (1) with re-
spect to any covered employee shall be reduced
(but not below zero) by the amount of any pay-
ment (with respect to such employee) of the tax
imposed by section 5000A directly or indirectly
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by the inverted corporation (as defined in such
section) or by any member of the expanded affili-
ated group (as defined in such section) which in-
cludes such corporation.’’.
(c) CONFORMING AMENDMENTS.—
(1) The last sentence of section 3121(v)(2)(A) is
amended by inserting before the period ‘‘or to any
specified stock compensation (as defined in section
5000A) on which tax is imposed by section 5000A’’.
(2) The table of chapters for subtitle D is amend-
ed by adding at the end the following new item:
‘‘Chapter 48. Stock compensation of insiders in inverted corpora-
tions.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall take effect on July 11, 2002; except that periods
before such date shall not be taken into account in applying
the periods in subsections (a) and (e)(1) of section 5000A
of the Internal Revenue Code of 1986, as added by this sec-
tion.
SEC. 343. REINSURANCE OF UNITED STATES RISKS IN FOR-
EIGN JURISDICTIONS.
(a) IN GENERAL.—Section 845(a) (relating to alloca-
tion in case of reinsurance agreement involving tax avoid-
ance or evasion) is amended by striking ‘‘source and char-
acter’’ and inserting ‘‘amount, source, or character’’.
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(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to any risk reinsured after April 11,
2002.
PART II—OTHER PROVISIONS
SEC. 344. DOUBLING OF CERTAIN PENALTIES, FINES, AND
INTEREST ON UNDERPAYMENTS RELATED TO
CERTAIN OFFSHORE FINANCIAL ARRANGE-
MENT.
(a) GENERAL RULE.—If—
(1) a taxpayer eligible to participate in—
(A) the Department of the Treasury’s Off-
shore Voluntary Compliance Initiative, or
(B) the Department of the Treasury’s vol-
untary disclosure initiative which applies to the
taxpayer by reason of the taxpayer’s under-
reporting of United States income tax liability
through financial arrangements which rely on
the use of offshore arrangements which were the
subject of the initiative described in subpara-
graph (A), and
(2) any interest or applicable penalty is imposed
with respect to any arrangement to which any initia-
tive described in paragraph (1) applied or to any un-
derpayment of Federal income tax attributable to
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items arising in connection with any arrangement
described in paragraph (1),
then, notwithstanding any other provision of law, the
amount of such interest or penalty shall be equal to twice
that determined without regard to this section.
(b) DEFINITIONS AND RULES.—For purposes of this
section—
(1) APPLICABLE PENALTY.—The term ‘‘applica-
ble penalty’’ means any penalty, addition to tax, or
fine imposed under chapter 68 of the Internal Rev-
enue Code of 1986.
(2) VOLUNTARY OFFSHORE COMPLIANCE INITIA-
TIVE.—The term ‘‘Voluntary Offshore Compliance
Initiative’’ means the program established by the De-
partment of the Treasury in January of 2003 under
which any taxpayer was eligible to voluntarily dis-
close previously undisclosed income on assets placed
in offshore accounts and accessed through credit card
and other financial arrangements.
(3) PARTICIPATION.—A taxpayer shall be treated
as having participated in the Voluntary Offshore
Compliance Initiative if the taxpayer submitted the
request in a timely manner and all information re-
quested by the Secretary of the Treasury or his dele-
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gate within a reasonable period of time following the
request.
(c) EFFECTIVE DATE.—The provisions of this section
shall apply to interest penalties, additions to tax, and fines
with respect to any taxable year if as of May 8, 2003, the
assessment of any tax, penalty, or interest with respect to
such taxable year is not prevented by the operation of any
law or rule of law.
SEC. 345. EFFECTIVELY CONNECTED INCOME TO INCLUDE
CERTAIN FOREIGN SOURCE INCOME.
(a) IN GENERAL.—Section 864(c)(4)(B) (relating to
treatment of income from sources without the United States
as effectively connected income) is amended by adding at
the end the following new flush sentence:
‘‘Any income or gain which is equivalent to any
item of income or gain described in clause (i),
(ii), or (iii) shall be treated in the same manner
as such item for purposes of this subparagraph.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after the date
of the enactment of this Act.
SEC. 346. DETERMINATION OF BASIS OF AMOUNTS PAID
FROM FOREIGN PENSION PLANS.
(a) IN GENERAL.—Section 72 (relating to annuities
and certain proceeds of endowment and life insurance con-
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tracts) is amended by redesignating subsection (w) as sub-
section (x) by inserting subsection (v) the following new
subsection:
‘‘(w) DETERMINATION OF BASIS OF FOREIGN PENSION
PLANS.—Notwithstanding any other provision of this sec-
tion, for purposes of determining the portion of any dis-
tribution from a foreign pension plan which is includible
in gross income of the distributee, the investment in the con-
tract with respect to the plan shall not include employer
or employee contributions to the plan (or any earnings on
such contributions) unless such contributions or earnings
were subject to taxation by the United States or any foreign
government.’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to distributions on or after the date of
the enactment of this Act.
SEC. 347. RECAPTURE OF OVERALL FOREIGN LOSSES ON
SALE OF CONTROLLED FOREIGN CORPORA-
TION.
(a) IN GENERAL.—Section 904(f)(3) (relating to dis-
positions) is amending by adding at the end the following
new subparagraph:
‘‘(D) APPLICATION
TO
DISPOSITIONS
OF
STOCK
IN
CONTROLLED
FOREIGN
CORPORA-
TIONS.—In the case of any disposition by a tax-
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payer of any share of stock in a controlled for-
eign corporation (as defined in section 957), this
paragraph shall apply to such disposition in the
same manner as if it were a disposition of prop-
erty described in subparagraph (A), except that
the exception contained in subparagraph (C)(i)
shall not apply.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to dispositions after the date of the en-
actment of this Act.
SEC. 348. PREVENTION OF MISMATCHING OF INTEREST
AND ORIGINAL ISSUE DISCOUNT DEDUC-
TIONS AND INCOME INCLUSIONS IN TRANS-
ACTIONS WITH RELATED FOREIGN PERSONS.
(a) ORIGINAL ISSUE DISCOUNT.—Section 163(e)(3)
(relating to special rule for original issue discount on obli-
gation held by related foreign person) is amended by redes-
ignating subparagraph (B) as subparagraph (C) and by in-
serting after subparagraph (A) the following new subpara-
graph:
‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN
ENTITIES.—Notwithstanding subparagraph (A)
(and any regulations thereunder), in the case of
any debt instrument having original issue dis-
count which is held by a related foreign person
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which is a foreign personal holding company (as
defined in section 552), a controlled foreign cor-
poration (as defined in section 957), or a passive
foreign investment company (as defined in sec-
tion 1297), a deduction shall be allowable to the
issuer with respect to such original issue dis-
count for any taxable year only to the extent
such original issue discount is included during
such taxable year in the gross income of a
United States person who owns (within the
meaning of section 958(a)) stock in such cor-
poration. For purposes of this subparagraph, the
determination as to the proper allocation of the
original issue discount to shareholders shall be
made in such manner as the Secretary may pre-
scribe.’’.
(b) INTEREST AND OTHER DEDUCTIBLE AMOUNTS.—
Section 267(a)(3) is amended—
(1) by striking ‘‘The Secretary’’ and inserting:
‘‘(A) IN GENERAL.—The Secretary’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) SPECIAL RULE FOR CERTAIN FOREIGN
ENTITIES.—Notwithstanding 
any 
regulations
issued under subparagraph (A), in the case of
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any amount payable to a foreign personal hold-
ing company (as defined in section 552), a con-
trolled foreign corporation (as defined in section
957), or a passive foreign investment company
(as defined in section 1297), a deduction shall be
allowable to the payor with respect to such
amount for any taxable year only to the extent
such amount is included during such taxable
year in the gross income of a United States per-
son who owns (within the meaning of section
958(a)) stock in such corporation. For purposes
of this subparagraph, the determination as to the
proper allocation of such amount to shareholders
shall be made in such manner as the Secretary
may prescribe.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to payments accrued on or after May
8, 2003.
SEC. 349. SALE OF GASOLINE AND DIESEL FUEL AT DUTY-
FREE SALES ENTERPRISES.
(a) PROHIBITION.—Section 555(b) of the Tariff Act of
1930 (19 U.S.C. 1555(b)) is amended—
(1) by redesignating paragraphs (6) through (8)
as paragraphs (7) through (9), respectively; and
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(2) by inserting after paragraph (5) the fol-
lowing:
‘‘(6) Any gasoline or diesel fuel sold at a duty-
free sales enterprise shall be considered to be entered
for consumption into the customs territory of the
United States.’’.
(b) CONSTRUCTION.—The amendments made by this
section shall not be construed to create any inference with
respect to the interpretation of any provision of law as such
provision was in effect on the day before the date of enact-
ment of this Act.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of enactment of this Act.
SEC. 350. REPEAL OF EARNED INCOME EXCLUSION OF CITI-
ZENS OR RESIDENTS LIVING ABROAD.
(a) REPEAL.—Section 911 (relating to citizens or resi-
dents living abroad) is amended by adding at the end the
following new subsection:
‘‘(g) TERMINATION.—This section shall not apply to
any taxable year beginning after December 31, 2003.’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2003.
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Subtitle E—Other Revenue
Provisions
SEC. 351. EXTENSION OF INTERNAL REVENUE SERVICE
USER FEES.
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 7528. INTERNAL REVENUE SERVICE USER FEES.
‘‘(a) GENERAL RULE.—The Secretary shall establish
a program requiring the payment of user fees for—
‘‘(1) requests to the Internal Revenue Service for
ruling letters, opinion letters, and determination let-
ters, and
‘‘(2) other similar requests.
‘‘(b) PROGRAM CRITERIA.—
‘‘(1) IN GENERAL.—The fees charged under the
program required by subsection (a)—
‘‘(A) shall vary according to categories (or
subcategories) established by the Secretary,
‘‘(B) shall be determined after taking into
account the average time for (and difficulty of)
complying with requests in each category (and
subcategory), and
‘‘(C) shall be payable in advance.
‘‘(2) EXEMPTIONS, ETC.—
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‘‘(A) IN
GENERAL.—The Secretary shall
provide for such exemptions (and reduced fees)
under such program as the Secretary determines
to be appropriate.
‘‘(B) EXEMPTION FOR CERTAIN REQUESTS
REGARDING
PENSION
PLANS.—The Secretary
shall not require payment of user fees under such
program for requests for determination letters
with respect to the qualified status of a pension
benefit plan maintained solely by 1 or more eli-
gible employers or any trust which is part of the
plan. The preceding sentence shall not apply to
any request—
‘‘(i) made after the later of—
‘‘(I) the fifth plan year the pen-
sion benefit plan is in existence, or
‘‘(II) the end of any remedial
amendment period with respect to the
plan beginning within the first 5 plan
years, or
‘‘(ii) made by the sponsor of any proto-
type or similar plan which the sponsor in-
tends to market to participating employers.
‘‘(C) DEFINITIONS AND SPECIAL RULES.—
For purposes of subparagraph (B)—
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‘‘(i) PENSION
BENEFIT
PLAN.—The
term ‘pension benefit plan’ means a pen-
sion, profit-sharing, stock bonus, annuity,
or employee stock ownership plan.
‘‘(ii) ELIGIBLE EMPLOYER.—The term
‘eligible employer’ means an eligible em-
ployer 
(as 
defined 
in 
section
408(p)(2)(C)(i)(I)) which has at least 1 em-
ployee who is not a highly compensated em-
ployee (as defined in section 414(q)) and is
participating in the plan. The determina-
tion of whether an employer is an eligible
employer under subparagraph (B) shall be
made as of the date of the request described
in such subparagraph.
‘‘(iii) DETERMINATION
OF
AVERAGE
FEES CHARGED.—For purposes of any de-
termination of average fees charged, any re-
quest to which subparagraph (B) applies
shall not be taken into account.
‘‘(3) AVERAGE FEE REQUIREMENT.—The average
fee charged under the program required by subsection
(a) shall not be less than the amount determined
under the following table:
Average
‘‘Category
Fee
Employee plan ruling and opinion ..............................................
$250
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Average
‘‘Category
Fee
Exempt organization ruling .........................................................
$350
Employee plan determination ......................................................
$300
Exempt organization determination ............................................
$275
Chief counsel ruling .......................................................................
$200.
‘‘(c) TERMINATION.—No fee shall be imposed under
this section with respect to requests made after September
30, 2013.’’.
(b) CONFORMING AMENDMENTS.—
(1) The table of sections for chapter 77 is amend-
ed by adding at the end the following new item:
‘‘Sec. 7528. Internal Revenue Service user fees.’’.
(2) Section 10511 of the Revenue Act of 1987 is
repealed.
(3) Section 620 of the Economic Growth and
Tax Relief Reconciliation Act of 2001 is repealed.
(c) LIMITATIONS.—Notwithstanding any other provi-
sion of law, any fees collected pursuant to section 7528 of
the Internal Revenue Code of 1986, as added by subsection
(a), shall not be expended by the Internal Revenue Service
unless provided by an appropriations Act.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to requests made after the date of the
enactment of this Act.
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SEC. 352. ADDITION OF VACCINES AGAINST HEPATITIS A TO
LIST OF TAXABLE VACCINES.
(a) IN GENERAL.—Section 4132(a)(1) (defining tax-
able vaccine) is amended by redesignating subparagraphs
(I), (J), (K), and (L) as subparagraphs (J), (K), (L), and
(M), respectively, and by inserting after subparagraph (H)
the following new subparagraph:
‘‘(I) Any vaccine against hepatitis A.’’.
(b) 
CONFORMING
AMENDMENT.—Section
9510(c)(1)(A) is amended by striking ‘‘October 18, 2000’’
and inserting ‘‘May 8, 2003’’.
(c) EFFECTIVE DATE.—
(1) SALES, ETC.—The amendments made by this
section shall apply to sales and uses on or after the
first day of the first month which begins more than
4 weeks after the date of the enactment of this Act.
(2) DELIVERIES.—For purposes of paragraph
(1) and section 4131 of the Internal Revenue Code of
1986, in the case of sales on or before the effective date
described in such paragraph for which delivery is
made after such date, the delivery date shall be con-
sidered the sale date.
SEC. 353. DISALLOWANCE OF CERTAIN PARTNERSHIP LOSS
TRANSFERS.
(a) TREATMENT OF CONTRIBUTED PROPERTY WITH
BUILT-IN LOSS.—Paragraph (1) of section 704(c) is
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amended by striking ‘‘and’’ at the end of subparagraph (A),
by striking the period at the end of subparagraph (B) and
inserting ‘‘, and’’, and by adding at the end the following:
‘‘(C) if any property so contributed has a
built-in loss—
‘‘(i) such built-in loss shall be taken
into account only in determining the
amount of items allocated to the contrib-
uting partner, and
‘‘(ii) except as provided in regulations,
in determining the amount of items allo-
cated to other partners, the basis of the con-
tributed property in the hands of the part-
nership shall be treated as being equal to its
fair market value immediately after the
contribution.
For purposes of subparagraph (C), the term ‘built-in
loss’ means the excess of the adjusted basis of the
property (determined without regard to subparagraph
(C)(ii)) over its fair market value immediately after
the contribution.’’.
(b) ADJUSTMENT TO BASIS OF PARTNERSHIP PROP-
ERTY ON TRANSFER OF PARTNERSHIP INTEREST IF THERE
IS SUBSTANTIAL BUILT-IN LOSS.—
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(1) ADJUSTMENT REQUIRED.—Subsection (a) of
section 743 (relating to optional adjustment to basis
of partnership property) is amended by inserting be-
fore the period ‘‘or unless the partnership has a sub-
stantial built-in loss immediately after such transfer’’.
(2) ADJUSTMENT.—Subsection (b) of section 743
is amended by inserting ‘‘or with respect to which
there is a substantial built-in loss immediately after
such transfer’’ after ‘‘section 754 is in effect’’.
(3) SUBSTANTIAL BUILT-IN LOSS.—Section 743
is amended by adding at the end the following new
subsection:
‘‘(d) SUBSTANTIAL BUILT-IN LOSS.—
‘‘(1) IN GENERAL.—For purposes of this section,
a partnership has a substantial built-in loss with re-
spect to a transfer of an interest in a partnership if
the transferee partner’s proportionate share of the ad-
justed basis of the partnership property exceeds by
more than $250,000 the basis of such partner’s inter-
est in the partnership.
‘‘(2) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be appropriate to
carry out the purposes of paragraph (1) and section
734(d), including regulations aggregating related
partnerships and disregarding property acquired by
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(3) SUBSTANTIAL
BASIS
REDUCTION.—Section
734 is amended by adding at the end the following
new subsection:
‘‘(d) SUBSTANTIAL BASIS REDUCTION.—
‘‘(1) IN GENERAL.—For purposes of this section,
there is a substantial basis reduction with respect to
a distribution if the sum of the amounts described in
subparagraphs (A) and (B) of subsection (b)(2) ex-
ceeds $250,000.
‘‘(2) REGULATIONS.—
‘‘For regulations to carry out this subsection, see
section 743(d)(2).’’.
(4) CLERICAL AMENDMENTS.—
(A) The section heading for section 734 is
amended to read as follows:
‘‘SEC. 734. ADJUSTMENT TO BASIS OF UNDISTRIBUTED
PARTNERSHIP PROPERTY WHERE SECTION
754 ELECTION OR SUBSTANTIAL BASIS RE-
DUCTION.’’.
(B) The table of sections for subpart B of
part II of subchapter K of chapter 1 is amended
by striking the item relating to section 734 and
inserting the following new item:
‘‘Sec. 734. Adjustment to basis of undistributed partnership prop-
erty where section 754 election or substantial basis
reduction.’’.
(d) EFFECTIVE DATES.—
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(1) SUBSECTION (a).—The amendment made by
subsection (a) shall apply to contributions made after
the date of the enactment of this Act.
(2) SUBSECTION (b).—The amendments made by
subsection (b) shall apply to transfers after the date
of the enactment of this Act.
(3) SUBSECTION (c).—The amendments made by
subsection (c) shall apply to distributions after the
date of the enactment of this Act.
SEC. 354. TREATMENT OF STRIPPED INTERESTS IN BOND
AND PREFERRED STOCK FUNDS, ETC.
(a) IN GENERAL.—Section 1286 (relating to tax treat-
ment of stripped bonds) is amended by redesignating sub-
section (f) as subsection (g) and by inserting after sub-
section (e) the following new subsection:
‘‘(f) TREATMENT OF STRIPPED INTERESTS IN BOND
AND PREFERRED STOCK FUNDS, ETC.—In the case of an
account or entity substantially all of the assets of which
consist of bonds, preferred stock, or a combination thereof,
the Secretary may by regulations provide that rules similar
to the rules of this section and 305(e), as appropriate, shall
apply to interests in such account or entity to which (but
for this subsection) this section or section 305(e), as the case
may be, would not apply.’’.
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(b) CROSS REFERENCE.—Subsection (e) of section 305
is amended by adding at the end the following new para-
graph:
‘‘(7) CROSS REFERENCE.—
‘‘For treatment of stripped interests in certain ac-
counts or entities holding preferred stock, see section
1286(f).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to purchases and dispositions after the
date of the enactment of this Act.
SEC. 355. REPORTING OF TAXABLE MERGERS AND ACQUISI-
TIONS.
(a) IN GENERAL.—Subpart B of part III of subchapter
A of chapter 61 is amended by inserting after section 6043
the following new section:
‘‘SEC. 6043A. TAXABLE MERGERS AND ACQUISITIONS.
‘‘(a) IN GENERAL.—The acquiring corporation in any
taxable acquisition shall make a return (according to the
forms or regulations prescribed by the Secretary) setting
forth—
‘‘(1) a description of the acquisition,
‘‘(2) the name and address of each shareholder of
the acquired corporation who is required to recognize
gain (if any) as a result of the acquisition,
‘‘(3) the amount of money and the fair market
value of other property transferred to each such share-
holder as part of such acquisition, and
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‘‘(4) such other information as the Secretary
may prescribe.
To the extent provided by the Secretary, the requirements
of this section applicable to the acquiring corporation shall
be applicable to the acquired corporation and not to the
acquiring corporation.
‘‘(b) NOMINEE REPORTING.—Any person who holds
stock as a nominee for another person shall furnish in the
manner prescribed by the Secretary to such other person
the information provided by the corporation under sub-
section (d).
‘‘(c) TAXABLE ACQUISITION.—For purposes of this sec-
tion, the term ‘taxable acquisition’ means any acquisition
by a corporation of stock in or property of another corpora-
tion if any shareholder of the acquired corporation is re-
quired to recognize gain (if any) as a result of such acquisi-
tion.
‘‘(d) STATEMENTS
TO BE FURNISHED
TO SHARE-
HOLDERS.—Every person required to make a return under
subsection (a) shall furnish to each shareholder whose name
is required to be set forth in such return a written statement
showing—
‘‘(1) the name, address, and phone number of the
information contact of the person required to make
such return,
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‘‘(2) the information required to be shown on
such return with respect to such shareholder, and
‘‘(3) such other information as the Secretary
may prescribe.
The written statement required under the preceding sen-
tence shall be furnished to the shareholder on or before Jan-
uary 31 of the year following the calendar year during
which the taxable acquisition occurred.’’.
(b) ASSESSABLE PENALTIES.—
(1) Subparagraph (B) of section 6724(d)(1) (re-
lating to definitions) is amended by redesignating
clauses (ii) through (xvii) as clauses (iii) through
(xviii), respectively, and by inserting after clause (i)
the following new clause:
‘‘(ii) section 6043A(a) (relating to re-
turns relating to taxable mergers and acqui-
sitions),’’.
(2) Paragraph (2) of section 6724(d) is amended
by redesignating subparagraphs (F) through (AA) as
subparagraphs (G) through (BB), respectively, and by
inserting after subparagraph (E) the following new
subparagraph:
‘‘(F) subsections (b) and (d) of section
6043A (relating to returns relating to taxable
mergers and acquisitions).’’.
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(c) CLERICAL AMENDMENT.—The table of sections for
subpart B of part III of subchapter A of chapter 61 is
amended by inserting after the item relating to section 6043
the following new item:
‘‘Sec. 6043A. Returns relating to taxable mergers and acquisi-
tions.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to acquisitions after the date of the en-
actment of this Act.
SEC. 356. MINIMUM HOLDING PERIOD FOR FOREIGN TAX
CREDIT ON WITHHOLDING TAXES ON INCOME
OTHER THAN DIVIDENDS.
(a) IN GENERAL.—Section 901 is amended by redesig-
nating subsection (l) as subsection (m) and by inserting
after subsection (k) the following new subsection:
‘‘(l) MINIMUM HOLDING PERIOD FOR WITHHOLDING
TAXES ON GAIN AND INCOME OTHER THAN DIVIDENDS
ETC.—
‘‘(1) IN GENERAL.—In no event shall a credit be
allowed under subsection (a) for any withholding tax
(as defined in subsection (k)) on any item of income
or gain with respect to any property if—
‘‘(A) such property is held by the recipient
of the item for 15 days or less during the 30-day
period beginning on the date which is 15 days