In the Senate of the United States,
November 14, 2002.
Resolved, That the bill from the House of Representa-
tives (H.R. 5557) entitled ‘‘An Act to amend the Internal
Revenue Code of 1986 to provide a special rule for members
of the uniformed services and Foreign Service in determining
the exclusion of gain from the sale of a principal residence
and to restore the tax exempt status of death gratuity pay-
ments to members of the uniformed services, and for other
purposes.’’, do pass with the following
AMENDMENT:
Page 10, strike out line 10 and insert:
SEC. 8. CLARIFICATION RELATING TO EXCEPTION FROM
ADDITIONAL TAX ON CERTAIN DISTRIBU-
TIONS FROM QUALIFIED TUITION PROGRAMS,
ETC. ON ACCOUNT OF ATTENDANCE AT MILI-
TARY ACADEMY.
(a) IN
GENERAL.—Subparagraph (B) of section
530(d)(4) of the Internal Revenue Code of 1986 (relating
to exceptions from additional tax for distributions not used
for educational purposes) is amended by striking ‘‘or’’ at
the end of clause (iii), by redesignating clause (iv) as clause
(v), and by inserting after clause (iii) the following new
clause:
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‘‘(iv) made on account of the attend-
ance of the account holder at the United
States Military Academy, the United States
Naval Academy, the United States Air
Force Academy, the United States Coast
Guard Academy, or the United States Mer-
chant Marine Academy, to the extent that
the amount of the payment or distribution
does not exceed the costs of advanced edu-
cation (as defined by section 2005(e)(3) of
title 10, United States Code, as in effect on
the date of the enactment of this section) at-
tributable to such attendance, or’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect for taxable years beginning after De-
cember 31, 2002.
SEC. 9. SUSPENSION OF TAX-EXEMPT STATUS OF DES-
IGNATED TERRORIST ORGANIZATIONS.
(a) IN GENERAL.—Section 501 of the Internal Revenue
Code of 1986 (relating to exemption from tax on corpora-
tions, certain trusts, etc.) is amended by redesignating sub-
section (p) as subsection (q) and by inserting after sub-
section (o) the following new subsection:
‘‘(p) SUSPENSION OF TAX-EXEMPT STATUS OF DES-
IGNATED TERRORIST ORGANIZATIONS.—
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‘‘(1) IN
GENERAL.—The exemption from tax
under subsection (a) with respect to any organization
shall be suspended during any period in which the or-
ganization is a designated terrorist organization.
‘‘(2) DESIGNATED TERRORIST ORGANIZATION.—
For purposes of this subsection, the term ‘designated
terrorist 
organization’ 
means 
an 
organization
which—
‘‘(A) is designated as a terrorist organiza-
tion in or pursuant to an Executive order, or
otherwise designated, under the authority of—
‘‘(i) section 212(a)(3) or 219 of the Im-
migration and Nationality Act,
‘‘(ii) the International Emergency Eco-
nomic Powers Act, or
‘‘(iii) section 5 of the United Nations
Participation Act, or
‘‘(B) is designated in or pursuant to an Ex-
ecutive order as supporting terrorist activity (as
defined in section 212(a)(3)(B) of the Immigra-
tion and Nationality Act) or terrorism (as de-
fined in section 140(d)(2) of the Foreign Rela-
tions Authorization Act, Fiscal Years 1988 and
1989).
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‘‘(3) DENIAL
OF
DEDUCTION.—No deduction
shall be allowed under section 170, 545(b)(2),
556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 for any
contribution to an organization during the period
such organization is a designated terrorist organiza-
tion.
‘‘(4) DENIAL OF ADMINISTRATIVE OR JUDICIAL
CHALLENGE OF SUSPENSION OR DENIAL OF DEDUC-
TION.—Notwithstanding section 7428 or any other
provision of law, no organization or other person may
challenge a suspension under paragraph (1), a des-
ignation described in paragraph (2), or a denial of
a deduction under paragraph (3) in any administra-
tive or judicial proceeding relating to the Federal tax
liability of such organization or other person.
‘‘(5) CREDIT
OR
REFUND
IN
CASE
OF
ERRO-
NEOUS DESIGNATION.—
‘‘(A) IN GENERAL.—If a designation of an
organization pursuant to 1 or more of the provi-
sions of law described in paragraph (2) is deter-
mined to be erroneous pursuant to such law and
the erroneous designation results in an overpay-
ment of income tax for any taxable year with re-
spect to such organization, credit or refund (with
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HR 5557 EAS
interest) with respect to such overpayment shall
be made.
‘‘(B) WAIVER OF LIMITATIONS.—If credit or
refund of any overpayment of tax described in
subparagraph (A) is prevented at any time be-
fore the close of the 1-year period beginning on
the date of the determination of such credit or re-
fund by the operation of any law or rule of law
(including res judicata), such refund or credit
may nevertheless be made or allowed if claim
therefor is filed before the close of such period.’’.
(b) NOTICE OF SUSPENSIONS.—If the tax exemption
of any organization is suspended under section 501(p) of
the Internal Revenue Code of 1986 (as added by subsection
(a)), the Internal Revenue Service shall update the listings
of tax-exempt organizations and shall publish appropriate
notice to taxpayers of such suspension and of the fact that
contributions to such organization are not deductible dur-
ing the period of such suspension.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
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SEC. 10. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT
TRAVEL EXPENSES OF NATIONAL GUARD AND
RESERVE MEMBERS.
(a) DEDUCTION ALLOWED.—Section 162 of the Inter-
nal Revenue Code of 1986 (relating to certain trade or busi-
ness expenses) is amended by redesignating subsection (p)
as subsection (q) and inserting after subsection (o) the fol-
lowing new subsection:
‘‘(p) TREATMENT OF EXPENSES OF MEMBERS OF RE-
SERVE COMPONENT OF ARMED FORCES OF THE UNITED
STATES.—For purposes of subsection (a)(2), in the case of
an individual who performs services as a member of a re-
serve component of the Armed Forces of the United States
at any time during the taxable year, such individual shall
be deemed to be away from home in the pursuit of a trade
or business for any period during which such individual
is away from home in connection with such services.’’.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ELECTS TO ITEMIZE.—Section 62(a)(2) (relating to
certain trade and business deductions of employees) is
amended by adding at the end the following new subpara-
graph:
‘‘(E) CERTAIN EXPENSES OF MEMBERS OF
RESERVE COMPONENTS OF THE ARMED FORCES
OF
THE
UNITED
STATES.—The deductions al-
lowed by section 162 which consist of expenses,
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not in excess of $1,500, paid or incurred by the
taxpayer in connection with the performance of
services by such taxpayer as a member of a re-
serve component of the Armed Forces of the
United States for any period during which such
individual is more than 100 miles away from
home in connection with such services.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to amounts paid or incurred in taxable
years beginning after December 31, 2002.
SEC. 11. EXTENSION OF INTERNAL REVENUE SERVICE
USER FEES.
(a) IN GENERAL.—Chapter 77 of the Internal Revenue
Code of 1986 (relating to miscellaneous provisions) is
amended by adding at the end the following new section:
‘‘SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.
‘‘(a) GENERAL RULE.—The Secretary shall establish
a program requiring the payment of user fees for—
‘‘(1) requests to the Internal Revenue Service for
ruling letters, opinion letters, and determination let-
ters, and
‘‘(2) other similar requests.
‘‘(b) PROGRAM CRITERIA.—
‘‘(1) IN GENERAL.—The fees charged under the
program required by subsection (a)—
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‘‘(A) shall vary according to categories (or
subcategories) established by the Secretary,
‘‘(B) shall be determined after taking into
account the average time for (and difficulty of)
complying with requests in each category (and
subcategory), and
‘‘(C) shall be payable in advance.
‘‘(2) EXEMPTIONS, ETC.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide for such exemptions (and reduced fees)
under such program as the Secretary determines
to be appropriate.
‘‘(B) EXEMPTION FOR CERTAIN REQUESTS
REGARDING
PENSION
PLANS.—The Secretary
shall not require payment of user fees under such
program for requests for determination letters
with respect to the qualified status of a pension
benefit plan maintained solely by 1 or more eli-
gible employers or any trust which is part of the
plan. The preceding sentence shall not apply to
any request—
‘‘(i) made after the later of—
‘‘(I) the fifth plan year the pen-
sion benefit plan is in existence, or
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‘‘(II) the end of any remedial
amendment period with respect to the
plan beginning within the first 5 plan
years, or
‘‘(ii) made by the sponsor of any proto-
type or similar plan which the sponsor in-
tends to market to participating employers.
‘‘(C) DEFINITIONS AND SPECIAL RULES.—
For purposes of subparagraph (B)—
‘‘(i) PENSION
BENEFIT
PLAN.—The
term ‘pension benefit plan’ means a pen-
sion, profit-sharing, stock bonus, annuity,
or employee stock ownership plan.
‘‘(ii) ELIGIBLE EMPLOYER.—The term
‘eligible employer’ means an eligible em-
ployer 
(as 
defined 
in 
section
408(p)(2)(C)(i)(I)) which has at least 1 em-
ployee who is not a highly compensated em-
ployee (as defined in section 414(q)) and is
participating in the plan. The determina-
tion of whether an employer is an eligible
employer under subparagraph (B) shall be
made as of the date of the request described
in such subparagraph.
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‘‘(iii) DETERMINATION
OF
AVERAGE
FEES CHARGED.—For purposes of any de-
termination of average fees charged, any re-
quest to which subparagraph (B) applies
shall not be taken into account.
‘‘(3) AVERAGE FEE REQUIREMENT.—The average
fee charged under the program required by subsection
(a) shall not be less than the amount determined
under the following table:
Average
‘‘Category
Fee
Employee plan ruling and opinion ..............................................
$250
Exempt organization ruling .........................................................
$350
Employee plan determination ......................................................
$300
Exempt organization determination ............................................
$275
Chief counsel ruling .......................................................................
$200.
‘‘(c) TERMINATION.—No fee shall be imposed under
this section with respect to requests made after September
30, 2012.’’.
(b) CONFORMING AMENDMENTS.—
(1) The table of sections for chapter 77 of the In-
ternal Revenue Code of 1986 is amended by adding
at the end the following new item:
‘‘Sec. 7527. Internal Revenue Service user fees.’’.
(2) Section 10511 of the Revenue Act of 1987 is
repealed.
(3) Section 620 of the Economic Growth and
Tax Relief Reconciliation Act of 2001 is repealed.
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(c) LIMITATIONS.—Notwithstanding any other provi-
sion of law, any fees collected pursuant to section 7527 of
the Internal Revenue Code of 1986, as added by subsection
(a), shall not be expended by the Internal Revenue Service
unless provided by an appropriations Act.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to requests made after the date of the
enactment of this Act.
SEC. 12. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALL-
MENT AGREEMENTS.
(a) IN GENERAL.—
(1) Section 6159(a) of the Internal Revenue Code
of 1986 (relating to authorization of agreements) is
amended—
(A) by striking ‘‘satisfy liability for pay-
ment of’’ and inserting ‘‘make payment on’’, and
(B) by inserting ‘‘full or partial’’ after ‘‘fa-
cilitate’’.
(2) Section 6159(c) of such Code (relating to Sec-
retary required to enter into installment agreements
in certain cases) is amended in the matter preceding
paragraph (1) by inserting ‘‘full’’ before ‘‘payment’’.
(b) REQUIREMENT TO REVIEW PARTIAL PAYMENT
AGREEMENTS EVERY TWO YEARS.—Section 6159 of the In-
ternal Revenue Code of 1986 is amended by redesignating
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subsections (d) and (e) as subsections (e) and (f), respec-
tively, and inserting after subsection (c) the following new
subsection:
‘‘(d) SECRETARY REQUIRED TO REVIEW INSTALL-
MENT AGREEMENTS FOR PARTIAL COLLECTION EVERY TWO
YEARS.—In the case of an agreement entered into by the
Secretary under subsection (a) for partial collection of a
tax liability, the Secretary shall review the agreement at
least once every 2 years.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to agreements entered into on or after
the date of the enactment of this Act.
SEC. 13. PROTECTION OF SOCIAL SECURITY.
Attest:
Secretary.