1016 
‘‘(D) REGULATIONS.— The Secretary shall 
issue such regulations or other guidance as may 
be necessary or appropriate to carry out the 
purposes of this paragraph, including regula-
tions or other guidance providing for the appro-
priate allocation of costs with respect to facili-
ties used for parking.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
December 31, 2025. 
SEC. 112025. NAME AND LOGO ROYALTIES TREATED AS UN-
RELATED BUSINESS TAXABLE INCOME. 
(a) IN GENERAL.—Section 513 is amended by adding 
at the end the following new subsection: 
‘‘(k) NAME AND LOGO ROYALTIES.—Any sale or li-
censing by an organization of any name or logo of the 
organization (including any trademark or copyright relat-
ing to such name or logo) shall be treated as an unrelated 
trade or business regularly carried on by such organiza-
tion.’’. 
(b) CALCULATION OF UNRELATED BUSINESS TAX-
ABLE INCOME.—Section 512(b) is amended by adding at 
the end the following new paragraph: 
‘‘(20) SPECIAL
RULE
FOR
NAME
AND
LOGO 
ROYALTIES.—Notwithstanding any other paragraph 
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of this subsection, any income derived from any sale 
or licensing described in section 513(k) shall be in-
cluded as an item of gross income derived from an 
unrelated trade or business.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 112026. EXCLUSION OF RESEARCH INCOME LIMITED 
TO PUBLICLY AVAILABLE RESEARCH. 
(a) IN GENERAL.—Section 512(b)(9) is amended by 
striking ‘‘from research’’ and inserting ‘‘from such re-
search’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts received or accrued 
after December 31, 2025. 
SEC. 112027. LIMITATION ON EXCESS BUSINESS LOSSES OF 
NONCORPORATE TAXPAYERS. 
(a) RULE MADE PERMANENT.—Section 461(l)(1) is 
amended by striking ‘‘and before January 1, 2029,’’ each 
place it appears. 
(b) CERTAIN NET OPERATING LOSS CARRYOVER 
TAKEN INTO ACCOUNT.—Section 461(l)(3) is amended— 
(1) by inserting ‘‘(except as provided in sub-
paragraph (B))’’ after ‘‘section 172’’, 
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1018 
(2) by redesignating subparagraphs (B) and 
(C) as subparagraphs (C) and (D), respectively, and 
(3) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) CERTAIN NET OPERATING LOSS CAR-
RYOVER TAKEN INTO ACCOUNT.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(i), the aggregate deduc-
tions of the taxpayer shall be increased by 
so much of the net operating loss carried 
to the taxable year as is attributable to the 
treatment of a specified loss as a net oper-
ating loss under paragraph (2). 
‘‘(ii) SPECIFIED LOSS.—For purposes 
of this subparagraph, the term ‘specified 
loss’ means a loss which is disallowed 
under paragraph (1) for a taxable year be-
ginning after December 31, 2024.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
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SEC. 112028. 1-PERCENT FLOOR ON DEDUCTION OF CHARI-
TABLE CONTRIBUTIONS MADE BY CORPORA-
TIONS. 
(a) IN GENERAL.—Section 170(b)(2)(A) is amended 
to read as follows: 
‘‘(A) IN
GENERAL.—Any charitable con-
tribution (other than any contribution to which 
subparagraph (B) or subparagraph (C) applies 
or any contribution for which a deduction is not 
allowable under this section without regard to 
this paragraph) shall be allowed as a deduction 
under this subsection (a) only to the extent that 
the aggregate of such contributions— 
‘‘(i) exceeds 1 percent of the tax-
payer’s taxable income, and 
‘‘(ii) does not exceed 10 percent of the 
taxpayer’s taxable income.’’. 
(b) APPLICATION
OF
CARRYFORWARD.—Section 
170(d)(2) is amended to read as follows: 
‘‘(2) CORPORATIONS.— 
‘‘(A) IN
GENERAL.—Any charitable con-
tribution taken into account under subsection 
(b)(2)(A) for any taxable year which is not al-
lowed as a deduction by reason of clause (ii) 
thereof shall be taken into account as a chari-
table contribution for the succeeding taxable 
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year, except that, for purposes of determining 
under this subparagraph whether such contribu-
tion is allowed in such succeeding taxable year, 
contributions in such succeeding taxable year 
(determined without regard to this paragraph) 
shall be taken into account under subsection 
(b)(2)(A) before any contribution taken into ac-
count by reason of this paragraph. 
‘‘(B) 5-YEAR CARRYFORWARD.—No chari-
table contribution may be carried forward under 
subparagraph (A) to any taxable year following 
the fifth taxable year after the taxable year in 
which the charitable contribution was first 
taken into account. For purposes of the pre-
ceding sentence, contributions shall be treated 
as allowed on a first-in first-out basis. 
‘‘(C) CONTRIBUTIONS DISALLOWED BY 1- 
PERCENT
FLOOR
CARRIED
FORWARD
ONLY 
FROM YEARS IN WHICH 10 PERCENT LIMITA-
TION IS EXCEEDED.—In the case of any taxable 
year from which a charitable contribution is 
carried forward under subparagraph (A) (deter-
mined without regard this subparagraph), sub-
paragraph (A) shall be applied by substituting 
‘clause (i) or (ii)’ for ‘clause (ii)’. 
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1021 
‘‘(D) SPECIAL RULE FOR NET OPERATING 
LOSS CARRYOVERS.—The amount of charitable 
contributions carried forward under subpara-
graph (A) shall be reduced to the extent that 
such carryfoward would (but for this subpara-
graph) reduce taxable income (as computed for 
purposes of the second sentence of section 
172(b)(2)) and increase a net operating loss 
carryover under section 172 to a succeeding 
taxable year.’’. 
(c) 
CONFORMING
AMENDMENTS.—Subparagraph 
(B)(ii) and (C)(ii) of section 170(b)(2) are each amended 
by inserting ‘‘other than subparagraph (C) thereof’’ after 
‘‘subsection (d)(2)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 112029. ENFORCEMENT OF REMEDIES AGAINST UN-
FAIR FOREIGN TAXES. 
(a) IN GENERAL.—Subpart D of part II of sub-
chapter N of chapter 1 is amended by adding at the end 
the following new section: 
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‘‘(vi) the rate of tax specified in sec-
tion 4948(a). 
‘‘(C) APPLICATION OF INCREASED RATES 
TO EFFECTIVELY CONNECTED INCOME OF NON-
RESIDENT
ALIEN
INDIVIDUALS
LIMITED
TO 
GAINS ON UNITED STATES REAL PROPERTY IN-
TERESTS.—In the case of any individual to 
whom subparagraph (A) applies, the tax im-
posed under section 1 on such individual (after 
application of subparagraph (A)) shall be re-
duced (but not below zero) by the excess of— 
‘‘(i) the tax which would be imposed 
under such section (after application of 
subparagraph (A)) if FIRPTA items were 
not taken into account, over 
‘‘(ii) the tax which would be imposed 
under such section if FIRPTA items were 
not taken into account, and subparagraph 
(A) did not apply. 
For purposes of this clause, the term ‘FIRPTA 
items’ means gains and losses taken into ac-
count under section 871(b)(1) by reason of sec-
tion 897(a)(1)(A). 
‘‘(D) APPLICATION OF INCREASED RATES 
TO CERTAIN FOREIGN GOVERNMENTS.—In the 
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1024 
case of any applicable person described in sub-
section (b)(1)(A), section 892(a) shall not 
apply. 
‘‘(2) MODIFICATION
OF
BASE
EROSION
AND 
ANTI-ABUSE TAX.—In the case of any corporation 
described in subsection (b)(1)(E) (applied by sub-
stituting ‘corporation’ for ‘foreign corporation’)— 
‘‘(A) such corporation shall be treated as 
described in subparagraphs (B) and (C) of sec-
tion 59A(e)(1) for purposes of determining 
whether such corporation is an applicable tax-
payer, 
‘‘(B) section 59A(b)(1) shall be applied 
by— 
‘‘(i) substituting ‘12.5 percent’ for ‘10 
percent’ in subparagraph (A), and 
‘‘(ii) by treating the amount described 
in section 59A(b)(1)(B)(ii) as being zero, 
‘‘(C) subsections (c)(2)(B), (c)(4)(B)(ii), 
and (d)(5) of section 59A shall not apply, and 
‘‘(D) if any amount (other than the pur-
chase price of depreciable or amortizable prop-
erty or inventory) would have been a base ero-
sion payment described in section 59A(d)(1) 
but for the fact that the taxpayer capitalizes 
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1025 
the amount, then solely for purposes of calcu-
lating the taxpayer’s base erosion payments 
(within the meaning of section 59A(d)) and 
base erosion tax benefits (within the meaning of 
section 59A(c)(2)), such amount shall be treat-
ed as if it had been deducted rather than cap-
italized. 
‘‘(3) WITHHOLDING TAXES.— 
‘‘(A) IN
GENERAL.—In the case of any 
payment to an applicable person, each rate of 
tax specified in section 1441(a) or 1442(a) (or 
any rate of tax applicable in lieu of such statu-
tory rate) shall be increased by the applicable 
number of percentage points. The preceding 
sentence shall not apply to the 14 percent rate 
of tax specified in section 1441(a). 
‘‘(B) DISPOSITION
OF
UNITED
STATES 
REAL PROPERTY INTERESTS.—In the case of 
any disposition of a United States real property 
interest (as defined in section 897(c)) by an ap-
plicable person, the rate of tax specified in sec-
tion 1445(a) (or any rate of tax applicable in 
lieu of such statutory rate) shall be increased 
by the applicable number of percentage points. 
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1026 
‘‘(C) OTHER DISPOSITIONS AND DISTRIBU-
TIONS
RELATED
TO
UNITED
STATES
REAL 
PROPERTY INTERESTS.—In the case of any dis-
position or distribution described in any para-
graph of section 1445(e), each rate of tax in 
such paragraph (or any rate of tax applicable in 
lieu of such statutory rate) shall be increased 
by the applicable number of percentage points 
if— 
‘‘(i) in the case of section 1445(e)(1), 
the foreign person referred to in subpara-
graph (A) or (B) of such section is an ap-
plicable person, 
‘‘(ii) in the case of section 1445(e)(2), 
the foreign corporation referred to in such 
section is an applicable person, 
‘‘(iii) 
in 
the 
case 
of 
section 
1445(e)(3), the foreign shareholder re-
ferred to in such section is an applicable 
person, 
‘‘(iv) in the case of section 1445(e)(4), 
the foreign person referred to in such sec-
tion is an applicable person, 
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‘‘(v) in the case of section 1445(e)(5), 
the Secretary issues regulations or other 
guidance providing for such increase, and 
‘‘(vi) in the case of section 1445(e)(6), 
the nonresident alien individual or foreign 
corporation referred to in such section is 
an applicable person. 
‘‘(4) APPLICABLE
NUMBER
OF
PERCENTAGE 
POINTS.—For purposes of this paragraph— 
‘‘(A) IN GENERAL.—The term ‘applicable 
number of percentage points’ means, with re-
spect to any discriminatory foreign country— 
‘‘(i) with respect to the 1-year period 
beginning on the applicable date with re-
spect to such foreign country, 5 percentage 
points, and 
‘‘(ii) with respect to any period after 
the 1-year period to which clause (i) ap-
plies, the sum of — 
‘‘(I) 5 percentage points, plus 
‘‘(II) an additional 5 percentage 
points for each annual anniversary of 
such applicable date which has oc-
curred before the beginning of such 
period. 
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‘‘(B) CAP ON INCREASE.—Notwithstanding 
subparagraph (A), the increase in any rate 
under paragraph (1) or (3) shall not result in 
such rate exceeding the amount of the statutory 
rate (determined without regard to any rate ap-
plicable in lieu of such statutory rate) increased 
by 20 percentage points. 
‘‘(C) APPLICABLE DATE.—For purposes of 
this section, the term ‘applicable date’ means, 
with respect to any discriminatory foreign coun-
try, the first day of the first calendar year be-
ginning on or after the latest of— 
‘‘(i) 90 days after the date of enact-
ment of this section, 
‘‘(ii) 180 days after the date of enact-
ment of the unfair foreign tax that causes 
such country to be treated as a discrimina-
tory foreign country, or 
‘‘(iii) the first date that an unfair for-
eign tax of such country begins to apply. 
‘‘(D) APPLICATION TO TAXABLE YEARS.— 
For purposes of paragraph (1), the applicable 
number of percentage points is the applicable 
number of percentage points in effect for the 
discriminatory foreign country during the tax-
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1029 
payer’s taxable year. If more than one applica-
ble number of percentage points is in effect for 
the discriminatory foreign country during the 
taxpayer’s taxable year, the applicable number 
of percentage points shall be determined by 
using a weighted average rate based on each 
applicable number of percentage points in effect 
during such taxable year and the number of 
days during which it was in effect. For pur-
poses of the prior sentence, the applicable num-
ber of percentage points in effect for the dis-
criminatory foreign country for the period be-
fore the applicable date is treated as zero, and, 
if the taxpayer ceases to be an applicable per-
son during its taxable year, the applicable num-
ber of percentage points in effect for the dis-
criminatory foreign country for the period after 
the taxpayer ceased to be an applicable person 
is treated as zero. 
‘‘(E) 
APPLICATION
TO
WITHHOLDING 
TAXES.—For purposes of paragraph (3), the 
applicable number of percentage points shall be 
determined with respect to the date of the pay-
ment or disposition, as the case may be. 
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1030 
‘‘(F) MULTIPLE DISCRIMINATORY FOREIGN 
COUNTRIES.—For purposes of paragraphs (1) 
and (3), if, on any day, the taxpayer is an ap-
plicable person with respect to more than one 
discriminatory foreign country, the highest ap-
plicable number of percentage points in effect 
shall apply. 
‘‘(G) INCREASE NOT APPLICABLE TO NON-
DISCRIMINATORY FOREIGN COUNTRIES.—In the 
case of any foreign country which is not a dis-
criminatory foreign country, the applicable 
number of percentage points is zero. 
‘‘(5) YEARS TO WHICH APPLICABLE.— 
‘‘(A) TAXABLE YEAR.—In the case of any 
person, paragraphs (1) and (2) shall apply to 
each taxable year beginning— 
‘‘(i) after the later of— 
‘‘(I) 90 days after the date of en-
actment of this section, 
‘‘(II) 180 days after the date of 
enactment of the unfair foreign tax 
that causes such country to be treated 
as a discriminatory foreign country, 
or 
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1031 
‘‘(III) the first date that an un-
fair foreign tax of such country begins 
to apply, and 
‘‘(ii) before the last date on which the 
discriminatory foreign country imposes an 
unfair foreign tax. 
‘‘(B) WITHHOLDING.—In the case of any 
person, paragraph (3) shall apply to each cal-
endar year beginning during the period that 
such person is an applicable person. 
‘‘(C) SAFE HARBOR FOR WITHHOLDING.— 
Paragraph (3) shall not apply— 
‘‘(i) in the case of any applicable per-
son to which clause (ii) does not apply, if 
the discriminatory foreign country with re-
spect to which such person is an applicable 
person is not listed by the Secretary as a 
discriminatory foreign country, and 
‘‘(ii) in the case of any applicable per-
son described in subparagraph (E) or (F) 
of subsection (b)(1), if the discriminatory 
foreign country with respect to which such 
person is an applicable person (and such 
country’s applicable date) has been listed 
in such guidance for less than 90 days. 
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‘‘(D) TEMPORARY
SAFE
HARBOR
FOR 
WITHHOLDING AGENTS.—No penalties or inter-
est shall be imposed with respect to failures, be-
fore January 1, 2027, to deduct or withhold 
any amounts by reason of paragraph (3) if the 
person required to deduct or withhold such 
amounts demonstrates to the satisfaction of the 
Secretary that such person made best efforts to 
comply with paragraph (3) in a timely manner. 
‘‘(b) APPLICABLE PERSON.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided by the Secretary, the term ‘applicable person’ 
means— 
‘‘(A) any government (within the meaning 
of section 892) of any discriminatory foreign 
country, 
‘‘(B) any individual (other than a citizen 
or resident of the United States) who is tax 
resident of a discriminatory foreign country, 
‘‘(C) any foreign corporation (other than a 
United States-owned foreign corporation, as de-
fined in section 904(h)(6)) which is a tax resi-
dent of a discriminatory foreign country, 
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1033 
‘‘(D) any private foundation (within the 
meaning of section 4948) created or organized 
in a discriminatory foreign country, 
‘‘(E) any foreign corporation (other than a 
publicly held corporation) if more than 50 per-
cent of— 
‘‘(i) the total combined voting power 
of all classes of stock of such corporation 
entitled to vote, or 
‘‘(ii) the total value of the stock of 
such corporation, 
is owned (within the meaning of section 958(a)) 
by persons described in this paragraph, 
‘‘(F) any trust the majority of the bene-
ficial interests of which are held (directly or in-
directly) by persons described in this para-
graph, and 
‘‘(G) foreign partnerships, branches, and 
any other entity identified with respect to a dis-
criminatory foreign country by the Secretary 
for purposes of this subsection. 
‘‘(2) CONTINUATION
OF
TREATMENT
DURING 
CERTAIN PERIODS.—For purposes of this section, if 
a person would cease to be an applicable person for 
a period of less than one year, such person shall con-
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1034 
tinue to be treated as an applicable person during 
such period. 
‘‘(c) UNFAIR FOREIGN TAX.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘unfair foreign 
tax’ means an undertaxed profits rule (UTPR), dig-
ital services tax, diverted profits tax, and, to the ex-
tent provided by the Secretary, an extraterritorial 
tax, discriminatory tax, or any other tax enacted 
with a public or stated purpose indicating the tax 
will be economically borne, directly or indirectly, dis-
proportionately by United States persons. Such term 
shall not include any tax which neither applies to— 
‘‘(A) any United States person (including 
a trade or business of a United States person), 
nor 
‘‘(B) any foreign corporation (including a 
trade or business of such foreign corporation) if 
the foreign corporation is a controlled foreign 
corporation and more than 50 percent of the 
total combined voting power of all classes of 
stock of such corporation entitled to vote, or the 
total value of the stock of such corporation) is 
owned (within the meaning of section 958(a)) 
by United States persons. 
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‘‘(2) 
EXTRATERRITORIAL
TAX.—The 
term 
‘extraterritorial tax’ means any tax imposed by a 
foreign country on a corporation (including any 
trade or business of such corporation) which is de-
termined by reference to any income or profits re-
ceived by any person (including any trade or busi-
ness of any person) by reason of such person being 
connected to such corporation through any chain of 
ownership, determined without regard to the owner-
ship interests of any individual, and other than by 
reason of such corporation having a direct or indi-
rect ownership interest in such person. 
‘‘(3) DISCRIMINATORY
TAX.—The term ‘dis-
criminatory tax’ means any tax imposed by a foreign 
country if— 
‘‘(A) such tax applies more than inciden-
tally to items of income that would not be con-
sidered to be from sources, or effectively con-
nected to a trade or business, within the foreign 
country under the rules of part I of this sub-
chapter if such part were applied by treating 
such foreign country as though it were the 
United States, 
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1036 
‘‘(B) such tax is imposed on a base other 
than net income and is not computed by per-
mitting recovery of costs and expenses, 
‘‘(C) such tax is exclusively or predomi-
nantly applicable, in practice or by its terms, to 
nonresident individuals and foreign corporations 
or partnerships (as determined under rules 
similar to paragraphs (4) and (5) of section 
7701(a) by treating the foreign country as 
though it were the United States) because of 
the application of revenue thresholds, exemp-
tions or exclusions for taxpayers subject to such 
foreign country’s corporate income tax, or re-
strictions of scope that ensure that substantially 
all residents (other than foreign corporations 
and partnerships (as so determined)) supplying 
comparable goods or services are excluded from 
the application of such tax, or 
‘‘(D) such tax is not treated as an income 
tax under the laws of such foreign country or 
is otherwise treated by such foreign country as 
outside the scope of any agreements that are in 
force between such foreign country and one or 
more other jurisdictions for the avoidance of 
double taxation with respect to taxes on income. 
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1037 
‘‘(4) EXCEPTIONS.—Except as otherwise pro-
vided by the Secretary, the terms ‘extraterritorial 
tax’ and ‘discriminatory tax’ shall not include any 
generally applicable tax which constitutes— 
‘‘(A) an income tax generally imposed on 
the income of citizens or residents of the for-
eign country, even if the computation of income 
includes payments that would be foreign source 
income under part I of this subchapter, 
‘‘(B) an income tax which would be an un-
fair foreign tax (determined without regard to 
this subparagraph) solely because it is imposed 
on the income of nonresidents attributable to a 
trade or business in such foreign country, 
‘‘(C) an income tax which would be an un-
fair foreign tax (determined without regard to 
this subparagraph) solely because it is imposed 
on citizens or residents of such foreign country 
by reference to the income of a corporate sub-
sidiary of such person, 
‘‘(D) a withholding tax, or other gross 
basis tax, on any amount described in section 
871(a)(1) or 881(a), other than any with-
holding tax, or other gross basis tax, imposed 
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1038 
with respect to services performed by persons 
other than individuals, 
‘‘(E) a value added tax, goods and services 
tax, sales tax, or other similar tax on consump-
tion, 
‘‘(F) a tax imposed with respect to trans-
actions on a per-unit or per-transaction basis 
rather than on an ad valorem basis, 
‘‘(G) a tax on real or personal property, an 
estate tax, a gift tax, other similar tax, 
‘‘(H) a tax which would not be an 
extraterritorial tax or discriminatory tax (deter-
mined without regard to this subparagraph) ex-
cept by reason of consolidation or loss sharing 
rules that generally apply only with respect to 
income of tax residents of the foreign country, 
or 
‘‘(I) any other tax identified by the Sec-
retary for purposes of this paragraph. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section— 
‘‘(1) DISCRIMINATORY
FOREIGN
COUNTRY.— 
The term ‘discriminatory foreign country’ means any 
foreign country which has one or more unfair for-
eign taxes. 
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1039 
‘‘(2) FOREIGN
COUNTRY.—The term ‘foreign 
country’ means a foreign country (or political sub-
division thereof) or a dependent territory or posses-
sion of a foreign country. Such term does not in-
clude any possession of the United States. 
‘‘(3) TAX.—The term ‘tax’ includes any in-
crease in tax whether effectuated by an increase in 
the rate or base of a tax, by a denial of deductions 
or credits, or otherwise. 
‘‘(e) REGULATIONS
AND OTHER GUIDANCE.—The 
Secretary shall issue such regulations or other guidance 
as may be necessary or appropriate to carry out the pur-
poses of this section, including regulations or other guid-
ance which— 
‘‘(1) provide for such adjustments to the appli-
cation of this section as are necessary to prevent the 
avoidance of the purposes of this section, including 
the application of this section (including subsections 
(b)(1)(E) 
and 
(c)(2)(A)(ii)) 
with 
respect 
to 
branches, partnerships, and other entities (whether 
or not otherwise disregarded for purposes of this 
chapter), 
‘‘(2) list the discriminatory foreign countries 
(and each such country’s applicable date) in guid-
ance, and update such guidance on a quarterly basis, 
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1040 
‘‘(3) provide notice to Congress with respect to 
changes to the list under paragraph (2), 
‘‘(4) exercise the authority to provide exceptions 
under subsections (b)(1), (c)(4), and 
‘‘(5) prevent the application of subsection 
(a)(2)(D) from resulting in double counting of 
amounts for purposes of section 59A(c)(4)(A)(ii).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part II of subchapter N of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 899. Enforcement of remedies against unfair foreign taxes.’’. 
SEC. 112030. REDUCTION OF EXCISE TAX ON FIREARMS SI-
LENCERS. 
(a) IN GENERAL.—Section 5811(a) is amended to 
read as follows: 
‘‘(a) RATE.—There shall be levied, collected, and paid 
on firearms transferred a tax at the rate of— 
‘‘(1) $5 for each firearm transferred in the case 
of a weapon classified as any other weapon under 
section 5845(e), 
‘‘(2) $0 for each firearm transferred in the case 
of a silencer (as defined in section 5845(a)(7)), and 
‘‘(3) $200 for any other firearm transferred.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to transfers after the date of the 
enactment of this Act. 
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1041 
SEC. 112031. MODIFICATIONS TO DE MINIMIS ENTRY PRIVI-
LEGE FOR COMMERCIAL SHIPMENTS. 
(a) CIVIL PENALTY.— 
(1) ADDITIONAL
PENALTY
IMPOSED.—Section 
321 of the Tariff Act of 1930 (19 U.S.C. 1321) is 
amended by adding at the end the following new 
subsection: 
‘‘(c) Any person who enters, introduces, facilitates, 
or attempts to introduce an article into the United States 
using the privilege of this section, the importation of which 
violates any other provision of United States law, shall be 
assessed, in addition to any other penalty permitted by 
law, a civil penalty of up to $5,000 for the first violation 
and up to $10,000 for each subsequent violation.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall take effect 30 days after the 
date of the enactment of this Act. 
(b) REPEAL
OF COMMERCIAL SHIPMENT EXCEP-
TION.— 
(1) REPEAL.—Section 321(a)(2)(B) of such Act 
(19 U.S.C. 1321(a)(2)(B)) is amended by striking 
‘‘of this Act, or’’ and all that follows through ‘‘sub-
division (2); and’’ and inserting ‘‘of this Act; and’’. 
(2) CONFORMING REPEAL.—Subsection (c) of 
such section 321, as added by subsection (a) of this 
section, is repealed. 
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1042 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on July 1, 2027. 
SEC. 112032. LIMITATION ON DRAWBACK OF TAXES PAID 
WITH RESPECT TO SUBSTITUTED MERCHAN-
DISE. 
Effective for claims filed on or after July 1, 2026, 
for purposes of drawback of internal revenue tax imposed 
under chapter 52 of the Internal Revenue Code of 1986, 
the amount of drawback granted under such Code, or the 
Tariff Act of 1930, on the export or destruction of sub-
stituted merchandise may not exceed the amount of taxes 
paid (and not returned by refund, credit, or drawback) 
on the substituted merchandise. 
PART 2—REMOVING TAXPAYER BENEFITS FOR 
ILLEGAL IMMIGRANTS 
SEC. 112101. PERMITTING PREMIUM TAX CREDIT ONLY FOR 
CERTAIN INDIVIDUALS. 
(a) IN GENERAL.—Section 36B(e)(1) is amended by 
inserting ‘‘or, in the case of aliens who are lawfully 
present, are not eligible aliens’’ after ‘‘individuals who are 
not lawfully present’’. 
(b) ELIGIBLE ALIENS.—Section 36B(e)(2) is amend-
ed— 
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(1) by striking ‘‘For purposes of this section, 
an individual’’ and inserting the following: ‘‘For pur-
poses of this section— 
‘‘(A) IN GENERAL.—An individual’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) ELIGIBLE
ALIENS.—An individual 
who is an alien and lawfully present shall be 
treated as an eligible alien if and only if such 
individual is, and is reasonably expected to be 
for the entire period of enrollment for which the 
credit under this section is being claimed— 
‘‘(i) an alien who is lawfully admitted 
for permanent residence under the Immi-
gration and Nationality Act (8 U.S.C. 
1101 et seq.), 
‘‘(ii) an alien who— 
‘‘(I) is a citizen or national of the 
Republic of Cuba, 
‘‘(II) is the beneficiary of an ap-
proved petition under section 203(a) 
of the Immigration and Nationality 
Act (8 U.S.C. 1153(a)), 
‘‘(III) meets all eligibility re-
quirements for an immigrant visa but 
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1044 
for whom such a visa is not imme-
diately available, 
‘‘(IV) is not otherwise inadmis-
sible under section 212(a) of such Act 
(8 U.S.C. 1182(a)), and 
‘‘(V) is physically present in the 
United States pursuant to a grant of 
parole in furtherance of the commit-
ment of the United States to the min-
imum level of annual legal migration 
of Cuban nationals to the United 
States specified in the U.S.-Cuba 
Joint 
Communique´
on 
Migration, 
done at New York September 9, 1994, 
and reaffirmed in the Cuba-United 
States: Joint Statement on Normal-
ization of Migration, Building on the 
Agreement of September 9, 1994, 
done at New York May 2, 1995, or 
‘‘(iii) an individual who lawfully re-
sides in the United States in accordance 
with a Compact of Free Association re-
ferred to in section 402(b)(2)(G) of the 
Personal Responsibility and Work Oppor-
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1045 
tunity Reconciliation Act of 1996 (8 
U.S.C. 1612(b)(2)(G)).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) VERIFICATION OF INFORMATION.—Section 
1411 of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18081) is amended— 
(A) in subsection (a)— 
(i) in paragraph (1), by striking ‘‘and 
section 36B(e) of the Internal Revenue 
Code of 1986’’; and 
(ii) in paragraph (2)— 
(I) in subparagraph (A), by strik-
ing ‘‘and’’ at the end; 
(II) in subparagraph (B), by add-
ing ‘‘and’’ at the end; and 
(III) by adding at the end the 
following new subparagraph: 
‘‘(C) in the case such individual is an alien 
lawfully present in the United States, whether 
such individual is an eligible alien (within the 
meaning of section 36B(e)(2) of such Code);’’; 
(B) in subsection (b)(3), by adding at the 
end the following new subparagraph: 
‘‘(D) IMMIGRATION STATUS.—In the case 
the individual’s eligibility is based on an attes-
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1046 
tation of the enrollee’s immigration status, an 
attestation that such individual is an eligible 
alien (within the meaning of 36B(e)(2) of the 
Internal Revenue Code of 1986).’’; and 
(C) in subsection (c)(2)(B)(ii), by adding 
at the end the following new subclause: 
‘‘(III) In the case of an indi-
vidual described in clause (i)(I) with 
respect to whom a premium tax credit 
or reduced cost-sharing under section 
36B of the Internal Revenue Code of 
1986 or section 1402 is being claimed, 
the attestation that the individual is 
an eligible alien (within the meaning 
of section 36B(e)(2) of such Code).’’. 
(2) 
ADVANCE
DETERMINATIONS.—Section 
1412(d) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18082(d)) is amended by in-
serting before the period at the end the following: 
‘‘or, in the case of aliens who are lawfully present, 
are not eligible aliens (within the meaning of section 
36B(e)(2) of the Internal Revenue Code of 1986)’’. 
(3) 
COST-SHARING
REDUCTIONS.—Section 
1402(e) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18071(e)) is amended— 
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1047 
(A) in the header, by inserting ‘‘OR NOT 
ELIGIBLE ALIENS’’ after ‘‘INDIVIDUALS NOT 
LAWFULLY PRESENT’’; 
(B) in paragraph (1), in the matter pre-
ceding subparagraph (A), by inserting ‘‘or, in 
the case of an alien who is lawfully present, is 
not an eligible alien (within the meaning of sec-
tion 36B(e)(2) of the Internal Revenue Code of 
1986)’’ after ‘‘not lawfully present’’; and 
(C) by amending paragraph (2) to read as 
follows: 
‘‘(2) ELIGIBLE ALIENS.—For purposes of this 
section, an individual shall be treated as an eligible 
alien (within the meaning of section 36B(e)(2) of 
the Internal Revenue Code of 1986) if, and only if, 
the individual is, and for the entire period of enroll-
ment for which the cost-sharing reduction under this 
section is being claimed is reasonably expected to be, 
such an alien.’’. 
(4) 
BASIC
HEALTH
PROGRAMS.—Section 
1331(e)(1) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18051(e)(1)) is amended by in-
serting before the period at the end the following: 
‘‘or, in the case of an alien who is lawfully present, 
an individual who is not an eligible alien (as defined 
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in section 36B(e)(2) of the Internal Revenue Code 
of 1986’’. 
(5) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to plan 
years beginning on or after January 1, 2027. 
(d) CLERICAL AMENDMENTS.— 
(1) The heading for section 36B(e) is amended 
by inserting ‘‘AND NOT ELIGIBLE ALIENS’’ after 
‘‘INDIVIDUALS NOT LAWFULLY PRESENT’’. 
(2) The heading for section 36B(e)(2) is 
amended by inserting ‘‘; ELIGIBLE ALIENS’’ after 
‘‘LAWFULLY PRESENT’’. 
(e) REQUIREMENT TO MAINTAIN MINIMUM ESSEN-
TIAL COVERAGE.—Section 5000A(d)(3) is amended by 
striking ‘‘an alien lawfully present in the United States’’ 
and inserting ‘‘an eligible alien (within the meaning of sec-
tion 36B(e)(2))’’. 
(f) REGULATIONS.—The Secretary of the Treasury 
and the Secretary of Health and Human Services may 
each prescribe such rules and other guidance as may be 
necessary or appropriate to carry out the amendments 
made by this section. 
(g) EFFECTIVE DATE.—The amendments made by 
this section (other than the amendments made by sub-
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1049 
section (c)) shall apply to taxable years beginning after 
December 31, 2026. 
SEC. 112102. CERTAIN ALIENS TREATED AS INELIGIBLE 
FOR PREMIUM TAX CREDIT. 
(a) IN GENERAL.—Section 36B(e)(2), as amended by 
the preceding provisions of this Act, is amended by adding 
at the end the following new subparagraph: 
‘‘(C) ELIGIBLE ALIENS.—Notwithstanding 
subparagraph (B), an individual who is an alien 
and lawfully present shall be treated as an eligi-
ble alien if and only if such individual is not, 
and is reasonably expected not to be for the en-
tire period of enrollment for which the credit 
under this section is being claimed— 
‘‘(i) an alien granted, or with a pend-
ing application for, asylum under section 
208 of the Immigration and Nationality 
Act, 
‘‘(ii) an alien granted parole under 
section 212(d)(5) or 236(a)(2)(B) of the 
Immigration and Nationality Act, 
‘‘(iii) an alien granted temporary pro-
tected status under section 244 of the Im-
migration and Nationality Act, 
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1050 
‘‘(iv) an alien granted deferred action 
or deferred enforced departure, or 
‘‘(v) an alien granted withholding of 
removal under section 241(b)(3) of the Im-
migration and Nationality Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2026. 
SEC. 112103. DISALLOWING PREMIUM TAX CREDIT DURING 
PERIODS OF MEDICAID INELIGIBILITY DUE 
TO ALIEN STATUS. 
(a) IN GENERAL.—Section 36B(c)(1) is amended by 
striking subparagraph (B) and by redesignating subpara-
graphs (C), (D), and (E) as subparagraphs (B), (C), and 
(D), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 36B(g)(4)(A) is amended by strik-
ing ‘‘subsection (c)(1)(C)’’ and inserting ‘‘subsection 
(c)(1)(B)’’. 
(2) Section 1331(e)(1)(B) of the Patient Pro-
tection and Affordable Care Act (42 U.S.C. 
18051(e)(1)(B)) is amended by striking ‘‘, or, in the 
case of’’ and all that follows through ‘‘such alien 
status’’. 
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1051 
(3) Section 1402(b) of such Act (42 U.S.C. 
18071(b)) is amended by striking the second sen-
tence. 
(c) REGULATIONS.—The Secretary of the Treasury 
and the Secretary of Health and Human Services may 
each prescribe such rules and other guidance as may be 
necessary or appropriate to carry out the amendments 
made by this section. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 112104. LIMITING MEDICARE COVERAGE OF CERTAIN 
INDIVIDUALS. 
Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 1899C. LIMITING MEDICARE COVERAGE OF CERTAIN 
INDIVIDUALS. 
‘‘(a) IN GENERAL.—Notwithstanding section 226, 
section 226A, section 401 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, or any 
other provision of this title, but subject to subsection (b), 
an individual may be entitled to, or enrolled for, benefits 
under this title only if the individual is— 
‘‘(1) a citizen or national of the United States; 
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1052 
‘‘(2) an alien who is lawfully admitted for per-
manent residence under the Immigration and Na-
tionality Act; 
‘‘(3) an alien who— 
‘‘(A) is a citizen or national of the Repub-
lic of Cuba; 
‘‘(B) is the beneficiary of an approved peti-
tion under section 203(a) of the Immigration 
and Nationality Act; 
‘‘(C) meets all eligibility requirements for 
an immigrant visa but for whom such a visa is 
not immediately available; 
‘‘(D) is not otherwise inadmissible under 
section 212(a) of such Act; and 
‘‘(E) is physically present in the United 
States pursuant to a grant of parole in further-
ance of the commitment of the United States to 
the minimum level of annual legal migration of 
Cuban nationals to the United States specified 
in the U.S.-Cuba Joint Communique´ on Migra-
tion, done at New York September 9, 1994, and 
reaffirmed in the Cuba-United States: Joint 
Statement on Normalization of Migration, 
Building on the Agreement of September 9, 
1994, done at New York May 2, 1995; or 
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1053 
‘‘(4) an individual who lawfully resides in the 
United States in accordance with a Compact of Free 
Association referred to in section 402(b)(2)(G) of 
the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996. 
‘‘(b) APPLICATION TO INDIVIDUALS CURRENTLY EN-
TITLED TO OR ENROLLED FOR BENEFITS.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is entitled to, or enrolled for, benefits under this 
title as of the date of the enactment of this section, 
subsection (a) shall apply beginning on the date that 
is 1 year after such date of enactment. 
‘‘(2) REVIEW BY COMMISSIONER OF SOCIAL SE-
CURITY.— 
‘‘(A) IN
GENERAL.—Not later than 6 
months after the date of the enactment of this 
section, the Commissioner of Social Security 
shall complete a review of individuals entitled 
to, or enrolled for, benefits under this title as 
of such date of enactment for purposes of iden-
tifying individuals not described in any of para-
graphs (1) through (4) of subsection (a). 
‘‘(B) NOTICE.—The Commissioner of So-
cial Security shall notify each individual identi-
fied under the review conducted under subpara-
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1054 
graph (A) that such individual’s entitlement to, 
or enrollment for, benefits under this title will 
be terminated as of the date that is 1 year after 
the date of the enactment of this section. Such 
notification shall be made as soon as practicable 
after such identification and in a manner de-
signed to ensure such individual’s comprehen-
sion of such notification.’’. 
SEC. 112105. EXCISE TAX ON REMITTANCE TRANSFERS. 
(a) IN GENERAL.—Chapter 36 is amended by insert-
ing after subchapter B the following new subchapter: 
‘‘Subchapter C—Remittance Transfers 
‘‘Sec. 4475. Imposition of tax. 
‘‘SEC. 4475. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—There is hereby imposed on any 
remittance transfer a tax equal to 5 percent of the amount 
of such transfer. 
‘‘(b) PAYMENT OF TAX.— 
‘‘(1) IN GENERAL.—The tax imposed by this 
section with respect to any remittance transfer shall 
be paid by the sender with respect to such transfer. 
‘‘(2) COLLECTION.—The remittance transfer 
provider with respect to any remittance transfer 
shall collect the amount of the tax imposed under 
subsection (a) with respect to such transfer from the 
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1055 
sender and remit such tax quarterly to the Secretary 
at such time and in such manner as provided by the 
Secretary. 
‘‘(3) SECONDARY
LIABILITY.—Where any tax 
imposed by subsection (a) is not paid at the time the 
transfer is made, then to the extent that such tax 
is not collected, such tax shall be paid by the remit-
tance transfer provider. 
‘‘(c) EXCEPTION
FOR
REMITTANCE
TRANSFERS 
SENT BY CITIZENS AND NATIONALS OF THE UNITED 
STATES THROUGH CERTAIN PROVIDERS.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply to any remittance transfer with respect to 
which the remittance transfer provider is a qualified 
remittance transfer provider and the sender is a 
verified United States sender. 
‘‘(2) QUALIFIED REMITTANCE TRANSFER PRO-
VIDER.—For purposes of this subsection, the term 
‘qualified remittance transfer provider’ means any 
remittance transfer provider which enters into a 
written agreement with the Secretary pursuant to 
which such provider agrees to verify the status of 
senders as citizens or nationals of the United States 
in such manner, and in accordance with such proce-
dures, as the Secretary may specify. 
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‘‘(3) VERIFIED UNITED STATES SENDER.—For 
purposes of this subsection, the term ‘verified United 
States sender’ means any sender who is verified by 
a qualified remittance transfer provider as being a 
citizen or national of the United States pursuant to 
an agreement described in paragraph (2). 
‘‘(d) DEFINITIONS.—For purposes of this section, the 
terms ‘remittance transfer’, ‘remittance transfer provider’, 
‘designated recipient’, and ‘sender’ shall each have the re-
spective meanings given such terms by section 920(g) of 
the Electronic Fund Transfer Act (15 U.S.C. 1693o-1; re-
lating to ‘‘Remittance Transfers’’). 
‘‘(e) APPLICATION OF ANTI-CONDUIT RULES.—For 
purposes of section 7701(l) with respect to any multiple- 
party arrangements involving the sender, a remittance 
transfer shall be treated as a financing transaction.’’. 
(b) REFUNDABLE INCOME TAX CREDIT ALLOWED 
TO CITIZENS AND NATIONALS OF THE UNITED STATES 
FOR EXCISE TAX ON REMITTANCE TRANSFERS.—Subpart 
C of part IV of subchapter A of chapter 1 is amended 
by inserting after section 36B the following new section: 
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1057 
‘‘SEC. 36C. CREDIT FOR EXCISE TAX ON REMITTANCE 
TRANSFERS OF CITIZENS AND NATIONALS OF 
THE UNITED STATES. 
‘‘(a) IN GENERAL.—In the case of any individual, 
there shall be allowed as a credit against the tax imposed 
by this subtitle for any taxable year an amount equal to 
the aggregate amount of taxes paid by such individual 
under section 4475 during such taxable year. 
‘‘(b) SOCIAL SECURITY NUMBER REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under this section unless the taxpayer includes on 
the return of tax for the taxable year— 
‘‘(A) the individual’s social security num-
ber, and 
‘‘(B) if the individual is married, the social 
security number of such individuals’s spouse. 
‘‘(2) SOCIAL
SECURITY
NUMBER.—For pur-
poses of this subsection, the term ‘social security 
number’ has the meaning given such term in section 
24(h)(7). 
‘‘(3) MARRIED INDIVIDUALS.—Rules similar to 
the rules of section 32(d) shall apply to this section. 
‘‘(c) SUBSTANTIATION REQUIREMENTS.—No credit 
shall be allowed under this section unless the taxpayer 
demonstrates to the satisfaction of the Secretary that the 
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1058 
tax under section 4475 with respect to which such credit 
is determined— 
‘‘(1) was paid by the taxpayer, and 
‘‘(2) is with respect to a remittance transfer 
with respect to which the taxpayer provided to the 
remittance transfer provider the certification and in-
formation referred to in section 6050AA(a)(2). 
‘‘(d) DEFINITIONS.—Any term used in this section 
which is also used in section 4475 shall have the meaning 
given such term in section 4475. 
‘‘(e) APPLICATION OF ANTI-CONDUIT RULES.—For 
rules providing for the application of the anti-conduit rules 
of section 7701(l) to remittance transfers, see section 
4475(e).’’. 
(c) REPORTING BY REMITTANCE TRANSFER PRO-
VIDERS.— 
(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 is amended by adding at 
the end the following new section: 
‘‘SEC. 
6050AA. 
RETURNS 
RELATING 
TO 
REMITTANCE 
TRANSFERS. 
‘‘(a) IN GENERAL.—Each remittance transfer pro-
vider shall make a return at such time as the Secretary 
may provide setting forth— 
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‘‘(1) in the case of a qualified remittance trans-
fer provider with respect to remittance transfers to 
which section 4475(a) does not apply by reason of 
section 4475(c), the aggregate number and value of 
such transfers, 
‘‘(2) in the case of any remittance transfer not 
described in paragraph (1) and with respect to 
which the sender certifies to the remittance transfer 
provider an intent to claim the credit under section 
36C and provides the information described in para-
graph (1)— 
‘‘(A) the name, address, and social security 
number of the sender, 
‘‘(B) the amount of tax paid by the sender 
under section 4475(b)(1), and 
‘‘(C) the amount of tax remitted by the re-
mittance 
transfer 
provider 
under 
section 
4475(b)(2), and 
‘‘(3) in the case of any remittance transfer not 
included under paragraph (1) or (2)— 
‘‘(A) the aggregate amount of tax paid 
under section 4475(b)(1) with respect to such 
transfers, and 
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‘‘(B) the aggregate amount of tax remitted 
under section 4475(b)(2) with respect to such 
transfers. 
‘‘(b) STATEMENT TO BE FURNISHED TO NAMED 
PERSONS.—Every person required to make a return under 
subsection (a) shall furnish, at such time as the Secretary 
may provide, to each person whose name is required to 
be set forth in such return a written statement showing— 
‘‘(1) the name and address of the information 
contact of the required reporting person, and 
‘‘(2) the information described in subsection 
(a)(2) which relates to such person. 
‘‘(c) DEFINITIONS.—Any term used in this section 
which is also used in section 4475 shall have the meaning 
given such term in such section.’’. 
(2) PENALTIES.—Section 6724(d), as amended 
by the preceding provisions of this Act, is amend-
ed— 
(A) in paragraph (1)(B), by striking ‘‘or’’ 
at the end of clause (xxvii), by striking ‘‘and’’ 
at the end of clause (xxviii) and inserting ‘‘or’’, 
and by adding at the end the following new 
clause: 
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‘‘(xxix) section 6050AA(a) (relating to 
returns relating to remittance transfers), 
and’’, and 
(B) in paragraph (2), by striking ‘‘or’’ at 
the end of subparagraph (MM), by striking the 
period at the end of subparagraph (NN) and in-
serting ‘‘, or’’, and by inserting after subpara-
graph (NN) the following new subparagraph: 
‘‘(OO) section 6050AA(b) (relating to 
statements relating to remittance transfers).’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) is amended by insert-
ing ‘‘36C,’’ after ‘‘36B,’’. 
(2) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘and’’ at the end of subparagraph (Z), by the strik-
ing the period at the end of subparagraph (AA) and 
inserting ‘‘, and’’, and by inserting after subpara-
graph (AA) the following new subparagraph: 
‘‘(BB) an omission of a correct social secu-
rity number under section 36C(b) to be in-
cluded on a return.’’. 
(3) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘36C,’’ after 
‘‘36B,’’. 
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(4) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 36B the fol-
lowing new item: 
‘‘Sec. 36C. Credit for excise tax on remittance transfers of citizens and nation-
als of the United States.’’. 
(5) The table of sections for subpart B of part 
III of subchapter A of chapter 61 is amended by 
adding at the end the following new item: 
‘‘Sec. 6050AA. Returns relating to remittance transfers.’’. 
(6) The table of subchapters for chapter 36 is 
amended by inserting after the item relating to sub-
chapter B the following new item: 
‘‘SUBCHAPTER C—REMITTANCE TRANSFERS’’. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to transfers made after De-
cember 31, 2025. 
(2) TAX CREDIT.—The amendments made by 
subsection (b), and paragraphs (1) through (4) of 
subsection (d), shall apply to taxable years ending 
after December 31, 2025. 
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1063 
SEC. 112106. SOCIAL SECURITY NUMBER REQUIREMENT 
FOR AMERICAN OPPORTUNITY AND LIFE-
TIME LEARNING CREDITS. 
(a) SOCIAL SECURITY NUMBER OF TAXPAYER RE-
QUIRED.—Section 25A(g)(1) is amended to read as fol-
lows: 
‘‘(1) IDENTIFICATION REQUIREMENT.— 
‘‘(A) SOCIAL SECURITY NUMBER REQUIRE-
MENT.—No credit shall be allowed under sub-
section (a) to a taxpayer unless the taxpayer in-
cludes on the return of tax for the taxable 
year— 
‘‘(i) such individual’s social security 
number, 
‘‘(ii) if the individual is married, the 
social security number of such individual’s 
spouse, and 
‘‘(iii) in the case of a credit with re-
spect to the qualified tuition and related 
expenses of an individual other than the 
taxpayer or the taxpayer’s spouse, the 
name and social security number of such 
individual. 
‘‘(B) INSTITUTION.—No American Oppor-
tunity Tax Credit shall be allowed under this 
section unless the taxpayer includes the em-
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ployer identification number of any institution 
to which the taxpayer paid qualified tuition and 
related expenses taken into account under this 
section on the return of tax for the taxable 
year. 
‘‘(C) SOCIAL
SECURITY
NUMBER
DE-
FINED.—For purposes of this paragraph, the 
term ‘social security number’ shall have the 
meaning given such term in section 24(h)(7).’’. 
(b) RULES RELATED TO MARRIED INDIVIDUALS.— 
Section 25A(g)(6) is amended to read as follows: 
‘‘(6) RULES
RELATED
TO
MARRIED
INDIVID-
UALS.—Rules similar to the rules of section 32(d) 
shall apply to this section.’’. 
(c) OMISSION
TREATED
AS
MATHEMATICAL
OR 
CLERICAL ERROR.—Section 6213(g)(2)(J) is amended by 
striking ‘‘TIN’’ and inserting ‘‘social security number or 
employer identification number’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
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PART 3—PREVENTING FRAUD, WASTE, AND 
ABUSE 
SEC. 112201. REQUIRING EXCHANGE VERIFICATION OF ELI-
GIBILITY FOR HEALTH PLAN. 
(a) IN GENERAL.—Section 36B(c) is amended by 
adding at the end the following new paragraphs: 
‘‘(5) EXCHANGE
ENROLLMENT
VERIFICATION 
REQUIREMENT.— 
‘‘(A) IN
GENERAL.—The term ‘coverage 
month’ shall not include, with respect to any in-
dividual covered by a qualified health plan en-
rolled in through an Exchange, any month be-
ginning before the Exchange verifies, using ap-
plicable enrollment information that shall be 
provided or verified by the applicant, such indi-
vidual’s eligibility— 
‘‘(i) to enroll in the plan through the 
Exchange, 
‘‘(ii) for any advance payment under 
section 1412 of the Patient Protection and 
Affordable Care Act of the credit allowed 
under this section, and 
‘‘(iii) for any reduced cost-sharing 
under section 1402 of such Act. 
‘‘(B) APPLICABLE ENROLLMENT INFORMA-
TION.—For purposes of subparagraph (A), ap-
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plicable enrollment information shall at least in-
clude affirmation of the following information 
(to the extent relevant in determining eligibility 
described in subparagraph (A)): 
‘‘(i) Income. 
‘‘(ii) Any immigration status. 
‘‘(iii) Any health coverage status or 
eligibility for coverage. 
‘‘(iv) Place of residence. 
‘‘(v) Family size. 
‘‘(vi) Such other information as may 
be determined by the Secretary (in con-
sultation with the Secretary of Health and 
Human Services) as necessary to the 
verification prescribed under subparagraph 
(A). 
‘‘(C) VERIFICATION OF PAST MONTHS.—In 
the case of a month that begins before 
verification prescribed by subparagraph (A), 
such month shall be treated as a coverage 
month if, and only if, the Exchange verifies for 
such month (using applicable enrollment infor-
mation that shall be provided or verified by the 
applicant) such individual’s eligibility to have so 
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1067 
enrolled, for any such advance payment, and for 
any such reduced cost-sharing. 
‘‘(D) EXCHANGE PARTICIPATION; COORDI-
NATION WITH OTHER PROCEDURES FOR DETER-
MINING ELIGIBILITY.—An individual shall not, 
solely by reason of failing to meet the require-
ments of this paragraph with respect to a 
month, be treated for such month as ineligible 
to enroll in a qualified health plan through an 
Exchange. 
‘‘(6) EXCHANGE COMPLIANCE WITH FILING RE-
QUIREMENTS.—The term ‘coverage month’ shall not 
include, with respect to any individual covered by a 
qualified health plan enrolled in through an Ex-
change, any month for which the Exchange does not 
meet the requirements of section 155.305(f)(4) of 
title 45, Code of Federal Regulations (as published 
in the Federal Register on March 19, 2025 (90 FR 
12942)), with respect to the individual.’’. 
(b) PRE-ENROLLMENT VERIFICATION PROCESS RE-
QUIRED.—Section 36B(c)(3)(A) is amended— 
(1) by striking ‘‘HEALTH
PLAN.—The term’’ 
and inserting the following: ‘‘HEALTH PLAN.— 
‘‘(i) IN GENERAL.—The term’’, and 
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1068 
(2) by adding at the end the following new 
clause: 
‘‘(ii) PRE-ENROLLMENT VERIFICATION 
PROCESS REQUIRED.—Such term shall not 
include any plan enrolled in through an 
Exchange, unless such Exchange provides 
a process for pre-enrollment verification 
through which any applicant may, begin-
ning not later than August 1, verify with 
the Exchange the applicant’s eligibility for 
enrollment in such plan for plan years be-
ginning in the subsequent year, for any ad-
vance payment of the credit allowed under 
this section, and for reduced cost-sharing 
under section 1402 of the Patient Protec-
tion and Affordable Care Act.’’. 
(c) REGULATIONS.—The Secretary of the Treasury 
and the Secretary of Health and Human Services may 
each prescribe such rules and other guidance as may be 
necessary or appropriate to carry out the amendments 
made by this section. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2027. 
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1069 
SEC. 112202. DISALLOWING PREMIUM TAX CREDIT IN CASE 
OF CERTAIN COVERAGE ENROLLED IN DUR-
ING SPECIAL ENROLLMENT PERIOD. 
(a) IN GENERAL.—Section 36B(c)(3)(A), as amend-
ed by the preceding provisions of this Act, is amended by 
adding at the end the following new clause: 
‘‘(iii) EXCEPTION
IN
CASE
OF
CER-
TAIN
SPECIAL
ENROLLMENT
PERIODS.— 
Such term shall not include any plan en-
rolled in during a special enrollment period 
provided for by an Exchange— 
‘‘(I) on the basis of the relation-
ship of the individual’s expected 
household income to such a percent-
age of the poverty line (or such other 
amount) as is prescribed by the Sec-
retary of Health and Human Services 
for purposes of such period, and 
‘‘(II) not in connection with the 
occurrence of an event or change in 
circumstances specified by the Sec-
retary of Health and Human Services 
for such purposes.’’. 
(b) REGULATIONS.—The Secretary of Treasury and 
the Secretary of Health and Human Services shall pre-
scribe such rules (including interim final and temporary 
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1070 
regulations) and other guidance as may be necessary to 
carry out the purposes of the amendments made by this 
section. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plans enrolled in 
during calendar months beginning after the third calendar 
month ending after the date of the enactment of this Act. 
SEC. 112203. ELIMINATING LIMITATION ON RECAPTURE OF 
ADVANCE PAYMENT OF PREMIUM TAX CRED-
IT. 
(a) IN GENERAL.—Section 36B(f)(2) is amended by 
striking subparagraph (B). 
(b) CONFORMING AMENDMENTS.— 
(1) Section 36B(f)(2) is amended by striking 
‘‘ADVANCE
PAYMENTS.—’’ and all that follows 
through ‘‘If the advance payments’’ and inserting 
the following: ‘‘ADVANCE
PAYMENTS.—If the ad-
vance payments’’. 
(2) Section 35(g)(12)(B)(ii) is amended by 
striking ‘‘then section 36B(f)(2)(B) shall be applied 
by substituting the amount determined under clause 
(i) for the amount determined under section 
36B(f)(2)(A)’’ and inserting ‘‘then the amount de-
termined under clause (i) shall be substituted for the 
amount determined under section 36B(f)(2)’’. 
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(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 112204. IMPLEMENTING ARTIFICIAL INTELLIGENCE 
TOOLS FOR PURPOSES OF REDUCING AND 
RECOUPING IMPROPER PAYMENTS UNDER 
MEDICARE. 
(a) IN GENERAL.—Part E of title XVIII of the Social 
Security Act (42 U.S.C. 1395x et seq.), as amended by 
the preceding provisions of this Act, is amended by adding 
at the end the following new section: 
‘‘SEC. 1899D. IMPLEMENTING ARTIFICIAL INTELLIGENCE 
TOOLS FOR PURPOSES OF REDUCING AND 
RECOUPING IMPROPER PAYMENTS. 
‘‘(a) IN GENERAL.—Not later than January 1, 2027, 
the Secretary shall implement such artificial intelligence 
tools determined appropriate by the Secretary for pur-
poses of— 
‘‘(1) reducing improper payments made under 
parts A and B; and 
‘‘(2) identifying any such improper payments so 
made. 
‘‘(b) CONTRACTS.—The Secretary shall seek to con-
tract with a vendor of artificial intelligence tools and with 
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1072 
data scientists for purposes of implementing the artificial 
intelligence tools required under subsection (a). 
‘‘(c) RECOUPMENT.—The Secretary shall, to the ex-
tent practicable, recoup payments identified using the arti-
ficial intelligence tools implemented under subsection (a). 
‘‘(d) REPORT.—Not later than January 1, 2029, and 
not less frequently than annually thereafter, the Secretary 
shall report to Congress on the implementation of artificial 
intelligence tools under subsection (a) and the recoupment 
of improper payments under subsection (c). Such report 
shall include— 
‘‘(1) a description of any opportunities for fur-
ther reducing rates of improper payments described 
in subsection (a)(1) or further increasing rates of 
recoupment of such payments; 
‘‘(2) the total dollar amount of improper pay-
ments recouped in the most recent year for which 
data is available; and 
‘‘(3) in the case that the Secretary fails to re-
duce the rate of improper payments by 50 percent 
in such most recent year as compared to the year 
prior to such most recent year, a description of the 
reasons for such failure.’’. 
(b) IMPLEMENTATION FUNDING.— 
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1073 
(1) FEDERAL
HOSPITAL
INSURANCE
TRUST 
FUND.—The Secretary of Health and Human Serv-
ices shall provide for the transfer from the Federal 
Hospital Insurance Trust Fund established under 
section 1817 of the Social Security Act (42 U.S.C. 
1395i) to the Centers for Medicare & Medicaid Serv-
ices Program Management Account of $12,500,000 
for fiscal year 2025 for purposes of carrying out the 
amendment made by this section, to remain available 
until expended. 
(2) FEDERAL
SUPPLEMENTARY
MEDICAL
IN-
SURANCE TRUST FUND.—The Secretary of Health 
and Human Services shall provide for the transfer, 
from the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the 
Social Security Act (42 U.S.C. 1395t) to the Cen-
ters for Medicare & Medicaid Services Program 
Management Account of $12,500,000 for fiscal year 
2025 for purposes of carrying out the amendment 
made by this section, to remain available until ex-
pended. 
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1074 
SEC. 112205. ENFORCEMENT PROVISIONS WITH RESPECT 
TO COVID-RELATED EMPLOYEE RETENTION 
CREDITS. 
(a) INCREASE IN ASSESSABLE PENALTY ON COVID– 
ERTC PROMOTERS FOR AIDING AND ABETTING UNDER-
STATEMENTS OF TAX LIABILITY.— 
(1) IN GENERAL.—If any COVID–ERTC pro-
moter is subject to penalty under section 6701(a) of 
the Internal Revenue Code of 1986 with respect to 
any 
COVID–ERTC 
document, 
notwithstanding 
paragraphs (1) and (2) of section 6701(b) of such 
Code, the amount of the penalty imposed under such 
section 6701(a) shall be the greater of— 
(A) $200,000 ($10,000, in the case of a 
natural person), or 
(B) 75 percent of the gross income derived 
(or to be derived) by such promoter with re-
spect to the aid, assistance, or advice referred 
to in section 6701(a)(1) of such Code with re-
spect to such document. 
(2) NO INFERENCE.—Paragraph (1) shall not 
be construed to create any inference with respect to 
the proper application of the knowledge requirement 
of section 6701(a)(3) of the Internal Revenue Code 
of 1986. 
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1075 
(b) FAILURE TO COMPLY WITH DUE DILIGENCE RE-
QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES 
OF ASSESSABLE PENALTY FOR AIDING AND ABETTING 
UNDERSTATEMENT OF TAX LIABILITY.—In the case of 
any COVID–ERTC promoter, the knowledge requirement 
of section 6701(a)(3) of the Internal Revenue Code of 
1986 shall be treated as satisfied with respect to any 
COVID–ERTC document with respect to which such pro-
moter provided aid, assistance, or advice, if such promoter 
fails to comply with the due diligence requirements re-
ferred to in subsection (c)(1). 
(c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY 
WITH DUE DILIGENCE REQUIREMENTS.— 
(1) IN
GENERAL.—Any COVID–ERTC pro-
moter which provides aid, assistance, or advice with 
respect to any COVID–ERTC document and which 
fails to comply with due diligence requirements im-
posed by the Secretary with respect to determining 
eligibility for, or the amount of, any COVID-related 
employee retention tax credit, shall pay a penalty of 
$1,000 for each such failure. 
(2) DUE DILIGENCE REQUIREMENTS.—Except 
as otherwise provided by the Secretary, the due dili-
gence requirements referred to in paragraph (1) 
shall be similar to the due diligence requirements 
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1076 
imposed under section 6695(g) of the Internal Rev-
enue Code of 1986. 
(3) RESTRICTION
TO
DOCUMENTS
USED
IN 
CONNECTION WITH RETURNS OR CLAIMS FOR RE-
FUND.—Paragraph (1) shall not apply with respect 
to any COVID–ERTC document unless such docu-
ment constitutes, or relates to, a return or claim for 
refund. 
(4) TREATMENT
AS
ASSESSABLE
PENALTY, 
ETC.—For purposes of the Internal Revenue Code of 
1986, the penalty imposed under paragraph (1) shall 
be treated in the same manner as a penalty imposed 
under section 6695(g) of such Code. 
(5) SECRETARY.—For purposes of this sub-
section, the term ‘‘Secretary’’ means the Secretary 
of the Treasury or the Secretary’s delegate. 
(d) ASSESSABLE PENALTIES FOR FAILURE TO DIS-
CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.— 
For purposes of sections 6111, 6112, 6707 and 6708 of 
the Internal Revenue Code of 1986— 
(1) any COVID-related employee retention tax 
credit (whether or not the taxpayer claims such 
COVID-related employee retention tax credit) shall 
be treated as a listed transaction (and as a report-
able transaction) with respect to any COVID–ERTC 
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1077 
promoter if such promoter provides any aid, assist-
ance, or advice with respect to any COVID–ERTC 
document relating to such COVID-related employee 
retention tax credit, and 
(2) such COVID–ERTC promoter shall be 
treated as a material advisor with respect to such 
transaction. 
(e) COVID–ERTC PROMOTER.—For purposes of 
this section— 
(1) IN GENERAL.—The term ‘‘COVID–ERTC 
promoter’’ means, with respect to any COVID– 
ERTC document, any person which provides aid, as-
sistance, or advice with respect to such document 
if— 
(A) such person charges or receives a fee 
for such aid, assistance, or advice which is 
based on the amount of the refund or credit 
with respect to such document and, with respect 
to such person’s taxable year in which such per-
son provided such assistance or the preceding 
taxable year, the aggregate gross receipts of 
such person for aid, assistance, and advice with 
respect to all COVID-ERTC documents exceeds 
20 percent of the gross receipts of such person 
for such taxable year, or 
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(B) with respect to such person’s taxable 
year in which such person provided such assist-
ance or the preceding taxable year— 
(i) the aggregate gross receipts of 
such person for aid, assistance, and advice 
with respect to all COVID–ERTC docu-
ments exceeds 50 percent of the gross re-
ceipts of such person for such taxable year, 
or 
(ii) both— 
(I) such aggregate gross receipts 
exceeds 20 percent of the gross re-
ceipts of such person for such taxable 
year, and 
(II) the aggregate gross receipts 
of such person for aid, assistance, and 
advice with respect to all COVID– 
ERTC documents (determined after 
application of paragraph (3)) exceeds 
$500,000. 
(2) EXCEPTION FOR CERTIFIED PROFESSIONAL 
EMPLOYER
ORGANIZATIONS.—The term ‘‘COVID– 
ERTC promoter’’ shall not include a certified profes-
sional employer organization (as defined in section 
7705 of the Internal Revenue Code of 1986). 
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(3) AGGREGATION
RULE.—For purposes of 
paragraph (1)(B)(ii)(II), all persons treated as a 
single employer under subsection (a) or (b) of sec-
tion 52 of the Internal Revenue Code of 1986, or 
subsection (m) or (o) of section 414 of such Code, 
shall be treated as 1 person. 
(4) SHORT TAXABLE YEARS.—In the case of 
any taxable year of less than 12 months, paragraph 
(1) shall be applied with respect to the calendar year 
in which such taxable year begins (in addition to ap-
plying to such taxable year). 
(f) COVID–ERTC DOCUMENT.—For purposes of 
this section, the term ‘‘COVID–ERTC document’’ means 
any return, affidavit, claim, or other document related to 
any COVID-related employee retention tax credit, includ-
ing any document related to eligibility for, or the calcula-
tion or determination of any amount directly related to 
any COVID-related employee retention tax credit. 
(g) COVID-RELATED EMPLOYEE RETENTION TAX 
CREDIT.—For purposes of this section, the term 
‘‘COVID-related employee retention tax credit’’ means— 
(1) any credit, or advance payment, under sec-
tion 3134 of the Internal Revenue Code of 1986, 
and 
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1080 
(2) any credit, or advance payment, under sec-
tion 2301 of the CARES Act. 
(h) LIMITATION
ON
CREDIT
AND
REFUND
OF 
COVID-RELATED EMPLOYEE RETENTION TAX CRED-
ITS.—Notwithstanding section 6511 of the Internal Rev-
enue Code of 1986 or any other provision of law, no credit 
or refund of any COVID-related employee retention tax 
credit shall be allowed or made after the date of the enact-
ment of this Act, unless a claim for such credit or refund 
is filed by the taxpayer on or before January 31, 2024. 
(i) AMENDMENTS TO EXTEND LIMITATION ON AS-
SESSMENT.— 
(1) IN GENERAL.—Section 3134(l) is amended 
to read as follows: 
‘‘(l) EXTENSION OF LIMITATION ON ASSESSMENT.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
6501, the limitation on the time period for the as-
sessment of any amount attributable to a credit 
claimed under this section shall not expire before the 
date that is 6 years after the latest of— 
‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2), or 
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‘‘(C) the date on which the claim for credit 
or refund with respect to such credit is made. 
‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC-
COUNT
IN
DETERMINING
IMPROPERLY
CLAIMED 
CREDIT.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 6511, in the case of an assessment attrib-
utable to a credit claimed under this section, 
the limitation on the time period for credit or 
refund of any amount attributable to a deduc-
tion for improperly claimed ERTC wages shall 
not expire before the time period for such as-
sessment expires under paragraph (1). 
‘‘(B) 
IMPROPERLY
CLAIMED
ERTC 
WAGES.—For purposes of this paragraph, the 
term ‘improperly claimed ERTC wages’ means, 
with respect to an assessment attributable to a 
credit claimed under this section, the wages 
with respect to which a deduction would not 
have been allowed if the portion of the credit to 
which such assessment relates had been prop-
erly claimed.’’. 
(2) APPLICATION TO CARES ACT CREDIT.—Sec-
tion 2301 of the CARES Act is amended by adding 
at the end the following new subsection: 
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‘‘(o) EXTENSION OF LIMITATION ON ASSESSMENT.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
6501 of the Internal Revenue Code of 1986, the lim-
itation on the time period for the assessment of any 
amount attributable to a credit claimed under this 
section shall not expire before the date that is 6 
years after the latest of— 
‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2) of 
such Code, or 
‘‘(C) the date on which the claim for credit 
or refund with respect to such credit is made. 
‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC-
COUNT
IN
DETERMINING
IMPROPERLY
CLAIMED 
CREDIT.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 6511 of such Code, in the case of an as-
sessment attributable to a credit claimed under 
this section, the limitation on the time period 
for credit or refund of any amount attributable 
to a deduction for improperly claimed ERTC 
wages shall not expire before the time period 
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for such assessment expires under paragraph 
(1). 
‘‘(B) 
IMPROPERLY
CLAIMED
ERTC 
WAGES.—For purposes of this paragraph, the 
term ‘improperly claimed ERTC wages’ means, 
with respect to an assessment attributable to a 
credit claimed under this section, the wages 
with respect to which a deduction would not 
have been allowed if the portion of the credit to 
which such assessment relates had been prop-
erly claimed.’’. 
(j) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the provisions of this sec-
tion shall apply to aid, assistance, and advice pro-
vided after March 12, 2020. 
(2) DUE
DILIGENCE
REQUIREMENTS.—Sub-
sections (b) and (c) shall apply to aid, assistance, 
and advice provided after the date of the enactment 
of this Act. 
(3) LIMITATION ON CREDIT AND REFUND OF 
COVID-RELATED EMPLOYEE RETENTION TAX CRED-
ITS.—Subsection (h) shall apply to credits and re-
funds allowed or made after the date of the enact-
ment of this Act. 
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1084 
(4) AMENDMENTS TO EXTEND LIMITATION ON 
ASSESSMENT.—The amendments made by subsection 
(i) shall apply to assessments made after the date of 
the enactment of this Act. 
(k) TRANSITION RULE WITH RESPECT TO REQUIRE-
MENTS TO DISCLOSE INFORMATION, MAINTAIN CLIENT 
LISTS, ETC.—Any return under section 6111 of the Inter-
nal Revenue Code of 1986, or list under section 6112 of 
such Code, required by reason of subsection (d) of this 
section to be filed or maintained, respectively, with respect 
to any aid, assistance, or advice provided by a COVID– 
ERTC promoter with respect to a COVID–ERTC docu-
ment before the date of the enactment of this Act, shall 
not be required to be so filed or maintained (with respect 
to such aid, assistance or advice) before the date which 
is 90 days after the date of the enactment of this Act. 
(l) PROVISIONS NOT TO BE CONSTRUED TO CREATE 
NEGATIVE INFERENCES.— 
(1) NO INFERENCE WITH RESPECT TO APPLICA-
TION
OF
KNOWLEDGE
REQUIREMENT
TO
PRE-EN-
ACTMENT
CONDUCT
OF
COVID-ERTC
PROMOTERS, 
ETC.—Subsection (b) shall not be construed to cre-
ate any inference with respect to the proper applica-
tion of section 6701(a)(3) of the Internal Revenue 
Code of 1986 with respect to any aid, assistance, or 
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1085 
advice provided by any COVID-ERTC promoter on 
or before the date of the enactment of this Act (or 
with respect to any other aid, assistance, or advice 
to which such subsection does not apply). 
(2) REQUIREMENTS
TO
DISCLOSE
INFORMA-
TION, MAINTAIN CLIENT LISTS, ETC.—Subsections 
(d) and (k) shall not be construed to create any in-
ference with respect to whether any COVID-related 
employee retention tax credit is (without regard to 
subsection (d)) a listed transaction (or reportable 
transaction) with respect to any COVID–ERTC pro-
moter; and, for purposes of subsection (k), a return 
or list shall not be treated as required (with respect 
to such aid, assistance, or advice) by reason of sub-
section (d) if such return or list would be so re-
quired without regard to subsection (d). 
(m) REGULATIONS.—The Secretary (as defined in 
subsection (c)(5)) shall issue such regulations or other 
guidance as may be necessary or appropriate to carry out 
the purposes of this section (and the amendments made 
by this section). 
SEC. 112206. EARNED INCOME TAX CREDIT REFORMS. 
(a) EARNED INCOME TAX CREDIT CERTIFICATION 
PROGRAM.— 
(1) ESTABLISHMENT OF PROGRAM.— 
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(A) IN GENERAL.—Chapter 77 is amended 
by adding at the end the following new section: 
‘‘SEC. 7531. EARNED INCOME TAX CREDIT CERTIFICATION 
PROGRAM. 
‘‘(a) IN GENERAL.—To avoid duplicative and other 
erroneous claims under section 32 with respect to a child 
of the taxpayer, for taxable years beginning after Decem-
ber 31, 2027, the Secretary shall establish a program 
under which, on the taxpayer’s application with respect 
to the child, the Secretary shall issue an EITC certificate 
for purposes of section 32 establishing such child’s status 
as a qualifying child only of the taxpayer for a taxable 
year. 
‘‘(b) APPLICATION REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—The Secretary shall not 
issue to a taxpayer an EITC certificate with respect 
to a child for a taxable year unless the taxpayer ap-
plies under the program with respect to the child 
and provides such information and supporting docu-
mentation as the Secretary shall by regulation pre-
scribe as necessary to establish such child as a quali-
fying child only of the taxpayer for the taxable year. 
‘‘(2) TIME AND MANNER OF APPLICATION.— 
Such application shall be made, and such informa-
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1087 
tion and supporting documentation shall be pro-
vided— 
‘‘(A) in such manner as may be provided 
by the Secretary for purposes of this section 
(including establishing an on-line portal), and 
‘‘(B) not later than the due date for the 
return of tax for the taxable year or (if later) 
when the return is filed. 
‘‘(3) COMPETING CLAIMS.—In the case of more 
than 1 taxpayer making an application with respect 
to a child under the program for a taxable year be-
ginning during a calendar year, the Secretary shall 
not issue an EITC certificate to any such taxpayer 
with respect to such child for such a taxable year 
unless the Secretary can establish such child, based 
on information and supporting documentation pro-
vided under paragraph (1), as the qualifying child 
only of one such taxpayer for such a taxable year. 
‘‘(c) TREATMENT
OF CREDIT WITHOUT CERTIFI-
CATION UNDER PROGRAM.—For taxable years beginning 
after December 31, 2027— 
‘‘(1) IN GENERAL.—In the case of a taxpayer 
who takes into account as a qualifying child under 
section 32 a child for whom an EITC certificate has 
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not been issued for the taxable year to the tax-
payer— 
‘‘(A) the Secretary shall not credit the por-
tion of any overpayment for such taxable year 
that is attributable to the taxpayer taking into 
account such child as a qualifying child, unless 
the taxpayer obtains, not later than the due 
date for the return for the taxable year, an 
EITC certificate with respect to such child for 
such taxable year, and 
‘‘(B) if the taxpayer fails to so obtain an 
EITC certificate, such failure shall be treated— 
‘‘(i) as an omission of information re-
quired by section 32 with respect to such 
child, and 
‘‘(ii) as arising out of a mathematical 
or clerical error and assessed according to 
section 6213(b)(1). 
‘‘(2) TERMINATION OF CERTIFICATION.—In the 
case of a taxpayer who for a taxable year takes into 
account as a qualifying child under section 32 a 
child for whom an EITC certificate is terminated for 
such taxable year, such termination shall be treated 
in the same manner as a failure to obtain an EITC 
certificate under paragraph (1)(B). 
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‘‘(d) TRANSITION RULES FOR TAXABLE YEARS BE-
GINNING BEFORE 2028.— 
‘‘(1) IN GENERAL.—If for any taxable year be-
ginning after December 31, 2023, and before Janu-
ary 1, 2027, more than 1 taxpayer makes a claim 
for credit under section 32 taking into account the 
same child as a qualifying child, then the Secretary 
shall send notice to each such taxpayer (by certified 
or registered mail to the last known address of the 
taxpayer) detailing the resultant treatment of such 
taxpayers under paragraph (2) with respect to such 
child for any subsequent taxable years beginning be-
fore 2028. 
‘‘(2) SUBSEQUENT TAXABLE YEARS BEGINNING 
BEFORE 2028.—In the case of a child with respect 
to whom paragraph (1) applied by reason of claims 
for credit for a taxable year, for any subsequent tax-
able years beginning before January 1, 2028— 
‘‘(A) subject to subparagraph (B), the Sec-
retary shall not credit the portion of any over-
payment for the taxable year that is attrib-
utable to a taxpayer taking into account such 
child as a qualifying child under section 32 
until the 15th day of October following the end 
of the taxable year, and 
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1090 
‘‘(B) if more than one taxpayer makes a 
claim for such credit for the taxable year taking 
into account such child as a qualifying child, so 
taking such child into account shall be treat-
ed— 
‘‘(i) as an omission of information re-
quired by section 32 with respect to such 
child, and 
‘‘(ii) as arising out of a mathematical 
or clerical error and assessed according to 
section 6213(b)(1). 
‘‘(e) QUALIFYING CHILD.—For purposes of this sec-
tion, the term ‘qualifying child’ has the meaning given 
such term under section 32(c)(3). 
‘‘(f) REBUTTAL OF TREATMENT.—Treatment under 
subsection (c) or (d)(2)(B) as having omitted information 
required by section 32 may be rebutted by providing such 
information and supporting documentation as satisfac-
torily demonstrates the child is a qualifying child of the 
taxpayer for the taxable year. 
‘‘(g) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
ERLY USE PROGRAM.— 
‘‘(1) IN
GENERAL.—A taxpayer shall not be 
permitted to apply for an EITC certificate under the 
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program for any taxable year in the disallowance pe-
riod. 
‘‘(2) DISALLOWANCE PERIOD.—For purposes of 
paragraph (1), the disallowance period is— 
‘‘(A) the period of 10 taxable years after 
the most recent taxable year for which there 
was a penalty imposed under 6720D on the tax-
payer (but only if such penalty has been im-
posed on such taxpayer more than once, at least 
one instance of which was due to fraud under 
section 6720D(b)), 
‘‘(B) the period of 2 taxable years after 
the most recent taxable year for which there 
was a penalty imposed under 6720D on the tax-
payer (but only if such penalty has been im-
posed on such taxpayer more than once due to 
reckless or intentional disregard of rules and 
regulations (but not imposed due to fraud)), 
and 
‘‘(C) any disallowance period with respect 
to the taxpayer under section 32(k)(1). 
‘‘(h) REGULATIONS.—The Secretary shall prescribe 
such rules as may be necessary or appropriate to carry 
out the program and purposes of this section, including— 
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‘‘(1) a process for establishing alternating tax-
able year treatment of a child as a qualifying child 
under a custodial arrangement, 
‘‘(2) notwithstanding subsection (d)(2), a proc-
ess for— 
‘‘(A) establishing the status of a child as 
a qualifying child of the taxpayer under section 
32 for taxable years to which such subsection 
applies, and 
‘‘(B) allowing credit or refunds attrib-
utable to such status, 
‘‘(3) a simplified process for re-certifying a 
child as a qualifying child only of the taxpayer for 
a taxable year, and 
‘‘(4) a process for terminating EITC certifi-
cates in the case of competing claims with respect to 
a child or in cases in which issuance of the certifi-
cate is determined by the Secretary to be erro-
neous.’’. 
(B) CONFORMING
AMENDMENT.—Section 
32 amended by adding at the end the following 
new subsection: 
‘‘(o) EITC CERTIFICATE WITH RESPECT TO QUALI-
FYING CHILDREN.—For rules relating to EITC certifi-
cates with respect to qualifying children and duplicate 
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claims for the credit allowed under this section, see section 
7531.’’. 
(C) CLERICAL AMENDMENT.—The table of 
sections for chapter 77 is amended by adding at 
the end the following new item: 
‘‘Sec. 7531. Earned income tax credit certification program.’’. 
(2) PENALTIES FOR IMPROPER USE OF EITC 
CERTIFICATE PROGRAM.— 
(A) IN GENERAL.—Part I of subchapter B 
of chapter 68 is amended by adding at the end 
the following new section: 
‘‘SEC. 6720D. PENALTIES WITH RESPECT TO EITC CERTIFI-
CATE PROGRAM. 
‘‘(a) RECKLESS OR INTENTIONAL DISREGARD.—If— 
‘‘(1) any person makes a material misstatement 
or inaccurate representation in an application under 
section 7531 for an EITC certificate, and 
‘‘(2) such misstatement or representation was 
due to reckless or intentional disregard of rules and 
regulations (but not due to fraud), 
such person shall pay a penalty of $100 for each EITC 
certificate with respect to which such misstatement or rep-
resentation was made. 
‘‘(b) FRAUD.—If a misstatement or representation 
described in subsection (a)(1) is due to fraud on the part 
of the person making such misstatement or representa-
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1094 
tion, in addition to any criminal penalty, such person shall 
pay a penalty of $500 for each EITC certificate with re-
spect to which such a misstatement or representation was 
made.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for part I of subchapter B of chapter 
68 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 6720D. Penalties with respect to EITC certificate program.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2024. 
(b) TASK FORCE
TO DESIGN
A PRIVATE DATA 
BOUNCING SYSTEM FOR IMPROVEMENTS TO THE EARNED 
INCOME TAX CREDIT.—Out of any money in the Treasury 
not otherwise appropriated, there is hereby appropriated 
$10,000,000 for the fiscal year ending on September 30, 
2026, for necessary expenses of the Department of the 
Treasury, to establish, within 90 days following the date 
of the enactment of this Act, a task force to provide to 
the Secretary of the Treasury a report on the following 
with respect to the administration of the earned income 
tax credit: 
(1) Recommendations for improvement of the 
integrity of such administration. 
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(2) The potential use of third-party payroll and 
consumption datasets to verify income. 
(3) The integration of automated databases to 
allow horizontal verification to reduce improper pay-
ments, fraud, and abuse. 
(c) INCREASED EARNED INCOME TAX CREDIT FOR 
PURPLE HEART RECIPIENTS WHOSE SOCIAL SECURITY 
DISABILITY BENEFITS ARE TERMINATED BY REASON OF 
WORK ACTIVITY.— 
(1) IN GENERAL.—Section 32, as amended by 
the preceding provisions of this Act, is amended by 
adding at the end the following new subsection: 
‘‘(p) INCREASE IN CREDIT FOR PURPLE HEART RE-
CIPIENTS WHOSE SOCIAL SECURITY DISABILITY BENE-
FITS ARE TERMINATED BY REASON OF WORK ACTIV-
ITY.— 
‘‘(1) IN GENERAL.—In the case of a specified 
Purple Heart recipient, the credit otherwise deter-
mined under subsection (a) for the taxable year shall 
be increased (whether or not such specified Purple 
Heart recipient is an eligible individual) by the sum 
of the SSDI benefit substitution amounts with re-
spect to qualified benefit termination months during 
such taxable year. 
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‘‘(2) SPECIFIED PURPLE HEART RECIPIENT.— 
For purposes of this subsection, the term ‘specified 
Purple Heart recipient’ means any individual— 
‘‘(A) who received the Purple Heart, 
‘‘(B) who received disability insurance ben-
efit payments under section 223(a) of the So-
cial Security Act, and 
‘‘(C) with respect to whom such disability 
insurance benefit payments ceased to be pay-
able by reason of section 223(e)(1) of such Act. 
‘‘(3) 
QUALIFIED
BENEFIT
TERMINATION 
MONTH.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
benefit termination month’ means, with respect 
to any specified Purple Heart recipient, each 
month during the 12-month period beginning 
with the first month with respect to which dis-
ability insurance benefit payments described in 
paragraph (2)(B) ceased to be payable as de-
scribed in paragraph (2)(C). 
‘‘(B) EXCEPTION FOR MONTHS FOR WHICH 
BENEFITS ARE REINSTATED, ETC.—Such term 
shall not include any month if the specified 
Purple Heart recipient receives any benefit pay-
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ment under section 223(a) of the Social Secu-
rity Act with respect to such month. 
‘‘(4) SSDI BENEFIT SUBSTITUTION AMOUNT.— 
For purposes of this subsection, the term ‘SSDI 
benefit substitution amount’ means, with respect to 
specified Purple Heart recipient for any qualified 
benefit termination month, an amount equal to the 
disability insurance benefit payment received by such 
recipient under section 223(a) of the Social Security 
Act for the month immediately preceding the 12- 
month period described in paragraph (3)(A). 
‘‘(5) CERTAIN EITC LIMITATIONS NOT APPLICA-
BLE.—Subsections (a)(2), (d), (e), (f), and (i) shall 
not apply with respect to the increase under para-
graph (1).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to taxable years end-
ing after the date of the enactment of this Act. 
SEC. 112207. TASK FORCE ON THE TERMINATION OF DI-
RECT FILE. 
(a) TERMINATION OF DIRECT FILE.—As soon as 
practicable, and not later than 30 days after the date of 
the enactment of this Act, the Secretary of the Treasury 
shall ensure that the Internal Revenue Service Direct File 
program has been terminated. 
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(b) APPROPRIATION FOR TASK FORCE TO DESIGN A 
BETTER PUBLIC-PRIVATE PARTNERSHIP BETWEEN THE 
IRS AND PRIVATE SECTOR TAX PREPARATION SERVICES 
TO PROVIDE FOR FREE TAX FILING TO REPLACE THE 
EXISTING ‘‘FREE FILE’’ PROGRAM AND ANY ‘‘DIRECT 
EFILE’’ TAX RETURN SYSTEM.—Out of any money in the 
Treasury not otherwise appropriated, there is hereby ap-
propriated for the fiscal year ending September 30, 2026, 
for necessary expenses of the Department of the Treasury 
to deliver to Congress, within 90 days following the date 
of the enactment of this Act, a report on (1) the cost of 
a new public-private partnership to provide for free tax 
filing for up to 70 percent of all taxpayers calculated by 
adjusted gross income to replace free file and any IRS- 
run direct file programs; (2) taxpayer opinions and pref-
erences regarding a taxpayer-funded, government-run 
service or a free service provided by the private sector; 
and (3) assessment of the feasibility of a new approach, 
how to make the options consistent and simple for tax-
payers across all participating providers, how to provide 
features to address taxpayer needs, and how much money 
should be appropriated to advertise the new option, 
$15,000,000, to remain available until September 30, 
2026. 
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1099 
SEC. 112208. POSTPONEMENT OF TAX DEADLINES FOR HOS-
TAGES AND INDIVIDUALS WRONGFULLY DE-
TAINED ABROAD. 
(a) PROSPECTIVE RELIEF.— 
(1) IN GENERAL.—Chapter 77 is amended by 
inserting after section 7510 the following new sec-
tion: 
‘‘SEC. 7511. TIME FOR PERFORMING CERTAIN ACTS POST-
PONED FOR HOSTAGES AND INDIVIDUALS 
WRONGFULLY DETAINED ABROAD. 
‘‘(a) TIME TO BE DISREGARDED.— 
‘‘(1) IN GENERAL.—The period during which 
an applicable individual was unlawfully or wrongfully 
detained abroad, or held hostage abroad, shall be 
disregarded in determining, under the internal rev-
enue laws, in respect of any tax liability of such indi-
vidual— 
‘‘(A) whether any of the acts described in 
section 7508(a)(1) were performed within the 
time prescribed thereof (determined without re-
gard to extension under any other provision of 
this subtitle for periods after the initial date (as 
determined by the Secretary) on which such in-
dividual was unlawfully or wrongfully detained 
abroad or held hostage abroad), 
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1100 
‘‘(B) the amount of any interest, penalty, 
additional amount, or addition to the tax for 
periods after such date, and 
‘‘(C) the amount of any credit or refund. 
‘‘(2) APPLICATION TO SPOUSE.—The provisions 
of paragraph (1) shall apply to the spouse of any in-
dividual entitled to the benefits of such paragraph. 
‘‘(b) APPLICABLE INDIVIDUAL.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘applicable individual’ means any indi-
vidual who is— 
‘‘(A) a United States national unlawfully 
or wrongfully detained abroad, as determined 
under section 302 of the Robert Levinson Hos-
tage Recovery and Hostage-Taking Account-
ability Act (22 U.S.C. 1741), or 
‘‘(B) a United States national taken hos-
tage abroad, as determined pursuant to the 
findings of the Hostage Recovery Fusion Cell 
(as described in section 304 of the Robert 
Levinson Hostage Recovery and Hostage-Tak-
ing Accountability Act (22 U.S.C. 1741b)). 
‘‘(2) INFORMATION PROVIDED TO TREASURY.— 
For purposes of identifying individuals described in 
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1101 
paragraph (1), not later than January 1, 2026, and 
annually thereafter— 
‘‘(A) the Secretary of State shall provide 
the Secretary with a list of the individuals de-
scribed in paragraph (1)(A), as well as any 
other information necessary to identify such in-
dividuals, and 
‘‘(B) the Attorney General, acting through 
the Hostage Recovery Fusion Cell, shall provide 
the Secretary with a list of the individuals de-
scribed in paragraph (1)(B), as well as any 
other information necessary to identify such in-
dividuals. 
‘‘(c) SPECIAL RULE FOR OVERPAYMENTS.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply for purposes of determining the amount of in-
terest on any overpayment of tax. 
‘‘(2) SPECIAL RULES.—If an individual is enti-
tled to the benefits of subsection (a) with respect to 
any return and such return is timely filed (deter-
mined after the application of such subsection), sub-
sections (b)(3) and (e) of section 6611 shall not 
apply. 
‘‘(d) MODIFICATION OF TREASURY DATABASES AND 
INFORMATION SYSTEMS.—The Secretary shall ensure that 
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1102 
databases and information systems of the Department of 
the Treasury are updated as necessary to ensure that stat-
ute expiration dates, interest and penalty accrual, and col-
lection activities are suspended consistent with the appli-
cation of subsection (a). 
‘‘(e) REFUND AND ABATEMENT OF PENALTIES AND 
FINES IMPOSED PRIOR TO IDENTIFICATION AS APPLICA-
BLE INDIVIDUAL.—In the case of any applicable indi-
vidual— 
‘‘(1) for whom any interest, penalty, additional 
amount, or addition to the tax in respect to any tax 
liability for any taxable year ending during the pe-
riod described in subsection (a)(1) was assessed or 
collected, and 
‘‘(2) who was, subsequent to such assessment 
or collection, determined to be an individual de-
scribed in subparagraph (A) or (B) of subsection 
(b)(1), 
the Secretary shall abate any such assessment and refund 
any amount collected to such applicable individual in the 
same manner as any refund of an overpayment of tax 
under section 6402.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 77 is amended by inserting after 
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1103 
the item relating to section 7510 the following new 
item: 
‘‘Sec. 7511. Time for performing certain acts postponed for hostages and indi-
viduals wrongfully detained abroad.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years end-
ing after the date of enactment of this Act. 
(b) REFUND AND ABATEMENT OF PENALTIES AND 
FINES PAID BY ELIGIBLE INDIVIDUALS.— 
(1) IN GENERAL.—Section 7511, as added by 
subsection (a), is amended by adding at the end the 
following new subsection: 
‘‘(f) REFUND AND ABATEMENT OF PENALTIES AND 
FINES PAID BY ELIGIBLE INDIVIDUALS WITH RESPECT 
TO PERIODS PRIOR TO DATE OF ENACTMENT OF THIS 
SECTION.— 
‘‘(1) IN GENERAL.— 
‘‘(A) ESTABLISHMENT.—Not later than 
January 1, 2026, the Secretary (in consultation 
with the Secretary of State and the Attorney 
General) shall establish a program to allow any 
eligible individual (or the spouse or any depend-
ent (as defined in section 152) of such indi-
vidual) to apply for a refund or an abatement 
of any amount described in paragraph (2) (in-
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1104 
cluding interest) to the extent such amount was 
attributable to the applicable period. 
‘‘(B) IDENTIFICATION OF INDIVIDUALS.— 
Not later than January 1, 2026, the Secretary 
of State and the Attorney General, acting 
through the Hostage Recovery Fusion Cell (as 
described in section 304 of the Robert Levinson 
Hostage Recovery and Hostage-Taking Ac-
countability Act (22 U.S.C. 1741b)), shall— 
‘‘(i) compile a list, based on such in-
formation as is available, of individuals 
who were applicable individuals during the 
applicable period, and 
‘‘(ii) provide the list described in 
clause (i) to the Secretary. 
‘‘(C) NOTICE.—For purposes of carrying 
out the program described in subparagraph (A), 
the Secretary (in consultation with the Sec-
retary of State and the Attorney General) shall, 
with respect to any individual identified under 
subparagraph (B), provide notice to such indi-
vidual— 
‘‘(i) in the case of an individual who 
has been released on or before the date of 
enactment of this subsection, not later 
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1105 
than 90 days after the date of enactment 
of this subsection, or 
‘‘(ii) in the case of an individual who 
is released after the date of enactment of 
this subsection, not later than 90 days 
after the date on which such individual is 
released, 
that such individual may be eligible for a refund 
or an abatement of any amount described in 
paragraph (2) pursuant to the program de-
scribed in subparagraph (A). 
‘‘(D) AUTHORIZATION.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), in the case of any refund described in 
subparagraph (A), the Secretary shall 
issue such refund to the eligible individual 
in the same manner as any refund of an 
overpayment of tax. 
‘‘(ii) EXTENSION OF LIMITATION ON 
TIME FOR REFUND.—With respect to any 
refund under subparagraph (A)— 
‘‘(I) the 3-year period of limita-
tion prescribed by section 6511(a) 
shall be extended until the end of the 
1-year period beginning on the date 
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1106 
that the notice described in subpara-
graph (C) is provided to the eligible 
individual, and 
‘‘(II) any limitation under section 
6511(b)(2) shall not apply. 
‘‘(2) ELIGIBLE INDIVIDUAL.—For purposes of 
this subsection, the term ‘eligible individual’ means 
any applicable individual who, for any taxable year 
ending during the applicable period, paid or incurred 
any interest, penalty, additional amount, or addition 
to the tax in respect to any tax liability for such 
year of such individual based on a determination 
that an act described in section 7508(a)(1) which 
was not performed by the time prescribed therefor 
(without regard to any extensions). 
‘‘(3) APPLICABLE
PERIOD.—For purposes of 
this subsection, the term ‘applicable period’ means 
the period— 
‘‘(A) beginning on January 1, 2021, and 
‘‘(B) ending on the date of enactment of 
this subsection.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this section shall apply to taxable years ending on 
or before the date of enactment of this Act. 
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1107 
SEC. 112209. TERMINATION OF TAX-EXEMPT STATUS OF 
TERRORIST SUPPORTING ORGANIZATIONS. 
(a) IN GENERAL.—Section 501(p) is amended by 
adding at the end the following new paragraph: 
‘‘(8) APPLICATION TO TERRORIST SUPPORTING 
ORGANIZATIONS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, in the case of any terrorist sup-
porting organization— 
‘‘(i) such organization (and the des-
ignation of such organization under sub-
paragraph (B)) shall be treated as de-
scribed in paragraph (2), and 
‘‘(ii) the period of suspension de-
scribed in paragraph (3) with respect to 
such organization shall be treated as begin-
ning on the date that the Secretary des-
ignates such organization under subpara-
graph (B) and ending on the date that the 
Secretary rescinds such designation under 
subparagraph (D). 
‘‘(B) TERRORIST SUPPORTING ORGANIZA-
TION.—For purposes of this paragraph— 
‘‘(i) IN GENERAL.—the term ‘terrorist 
supporting organization’ means any orga-
nization which is designated by the Sec-
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1108 
retary as having provided, during the 3- 
year period ending on the date of such des-
ignation, material support or resources to 
an organization described in paragraph (2) 
(determined after the application of this 
paragraph to such organization) in excess 
of a de minimis amount. 
‘‘(ii) MATERIAL
SUPPORT
OR
RE-
SOURCES.—The term ‘material support or 
resources’ has the meaning given such 
term in subsection (g)(4) of section 2339B 
of title 18, United States Code, except that 
such term shall not include— 
‘‘(I) support or resources that 
were approved by the Secretary of 
State with the concurrence of the At-
torney General for purposes of sub-
section (j) of such section, or 
‘‘(II) humanitarian aid provided 
with the approval of the Office of For-
eign Assets Control. 
‘‘(C) DESIGNATION PROCEDURE.— 
‘‘(i) NOTICE REQUIREMENT.—Prior to 
designating any organization as a terrorist 
supporting organization under subpara-
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1109 
graph (B), the Secretary shall mail to the 
most recent mailing address provided by 
such organization on the organization’s an-
nual return or notice under section 6033 
(or subsequent form indicating a change of 
address) a written notice which includes— 
‘‘(I) a statement that the Sec-
retary will designate such organization 
as a terrorist supporting organization 
unless the organization satisfies the 
requirements of subclause (I) or (II) 
of clause (ii), 
‘‘(II) the name of the organiza-
tion or organizations with respect to 
which the Secretary has determined 
such organization provided material 
support or sources as described in 
subparagraph (B), 
‘‘(III) a description of such mate-
rial support or resources except to the 
extent that the Secretary determines 
that disclosure of such description 
would be inconsistent with national 
security or law enforcement interests, 
and 
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1110 
‘‘(IV) if the Secretary makes the 
determination described in subclause 
(III), a statement that the Secretary 
has made such determination and that 
all or part of the description of such 
material support or resources is not 
included in such notice by reason of 
such determination. 
‘‘(ii) OPPORTUNITY TO CURE.—In the 
case of any notice provided to an organiza-
tion under clause (i), the Secretary shall, 
at the close of the 90-day period beginning 
on the date that such notice was sent, des-
ignate such organization as a terrorist sup-
porting organization under subparagraph 
(B) if (and only if) such organization has 
not (during such period)— 
‘‘(I) demonstrated to the satisfac-
tion of the Secretary that such organi-
zation did not provide the material 
support or resources referred to in 
subparagraph (B), 
‘‘(II) made reasonable efforts to 
have such support or resources re-
turned to such organization and cer-
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1111 
tified in writing to the Secretary that 
such organization will not provide any 
further support or resources to orga-
nizations described in paragraph (2), 
or 
‘‘(III) if such notice included a 
statement described in clause (i)(IV), 
filed a complaint with a United States 
district court of competent jurisdiction 
alleging that Secretary’s determina-
tion under clause (i)(III) is erroneous. 
A certification under subclause (II) shall 
not be treated as valid if the organization 
making such certification has provided any 
other such certification during the pre-
ceding 5 years. 
‘‘(iii) APPLICATION OF OPPORTUNITY 
TO CURE FOLLOWING COMPLAINT REGARD-
ING
DETERMINATION
TO
WITHHOLD
DE-
SCRIPTION OF MATERIAL SUPPORT OR RE-
SOURCES.—In the case of a final judgment 
of a court of competent jurisdiction that 
the Secretary’s determination under clause 
(i)(III) was not erroneous, clause (ii) shall 
be applied without regard to subclause 
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1112 
(III) thereof and as though the notice re-
ferred to in such clause was sent on the 
first date that all rights of appeal with re-
spect to such final judgement have con-
cluded. 
‘‘(D) RESCISSION.—The Secretary shall re-
scind a designation under subparagraph (B) if 
(and only if)— 
‘‘(i) the Secretary determines that 
such designation was erroneous, 
‘‘(ii) after the Secretary receives a 
written certification from an organization 
that such organization did not receive the 
notice described in subparagraph (C)(i)— 
‘‘(I) the Secretary determines 
that it is reasonable to believe that 
such organization did not receive such 
notice, and 
‘‘(II) such organization satisfies 
the requirements of subclause (I) or 
(II) of subparagraph (C)(ii) (deter-
mined after taking into account the 
last sentence thereof), or 
‘‘(iii) the Secretary determines, with 
respect to all organizations to which the 
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1113 
material support or resources referred to 
in subparagraph (B) were provided, the pe-
riods of suspension under paragraph (3) 
have ended. 
A certification described in the matter pre-
ceding subclause (I) of clause (ii) shall not be 
treated as valid if the organization making such 
certification has provided any other such certifi-
cation during the preceding 5 years. 
‘‘(E) ADMINISTRATIVE REVIEW BY INTER-
NAL REVENUE SERVICE INDEPENDENT OFFICE 
OF APPEALS.—In the case of the designation of 
an organization by the Secretary as a terrorist 
supporting organization under subparagraph 
(B), a dispute regarding such designation shall 
be subject to resolution by the Internal Revenue 
Service Independent Office of Appeals under 
section 7803(e) in the same manner as if such 
designation were made by the Internal Revenue 
Service and paragraph (5) of this subsection 
did not apply. 
‘‘(F) JURISDICTION
OF
UNITED
STATES 
COURTS.—Notwithstanding paragraph (5), the 
United States district courts shall have exclu-
sive jurisdiction to review any determination of 
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1114 
the Secretary under subparagraph (C)(i)(III) 
and any final determination with respect to an 
organization’s designation as a terrorist sup-
porting organization under subparagraph (B). 
In the case of any such determination which 
was based on classified information (as defined 
in section 1(a) of the Classified Information 
Procedures Act), such information may be sub-
mitted to the reviewing court ex parte and in 
camera. For purposes of this subparagraph, a 
determination with respect to an organization’s 
designation as a terrorist supporting organiza-
tion shall not fail to be treated as a final deter-
mination merely because such organization fails 
to utilize the dispute resolution process of the 
Internal Revenue Service Independent Office of 
Appeals provided under subparagraph (E). 
‘‘(G) 
CLASSIFIED
INFORMATION.—The 
Secretary shall establish policies and procedures 
for purposes of this paragraph that ensure that 
employees of the Department of the Treasury 
comply with all laws regarding the handling and 
review of classified information (as defined in 
section 1(a) of the Classified Information Pro-
cedures Act).’’. 
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