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(b) REPORTING OF ATTORNEYS’ FEES PAYABLE TO
CORPORATIONS.—The regulations providing an exception
under section 6041 of the Internal Revenue Code of 1986
for payments made to corporations shall not apply to pay-
ments of attorneys’ fees.
(c) EFFECTIVE DATE.—The amendment made by
this section shall apply to payments made after December
31, 1997.
SEC. 1032. DECREASE OF THRESHOLD FOR REPORTING
PAYMENTS TO CORPORATIONS PERFORMING
SERVICES FOR FEDERAL AGENCIES.
(a) IN GENERAL.—Subsection (d) of section 6041A
(relating to returns regarding payments of remuneration
for services and direct sales) is amended by adding at the
end the following new paragraph:
‘‘(3) PAYMENTS
TO
CORPORATIONS
BY
FED-
ERAL EXECUTIVE AGENCIES.—
‘‘(A) IN GENERAL.—Notwithstanding any
regulation prescribed by the Secretary before
the date of the enactment of this paragraph,
subsection (a) shall apply to remuneration paid
to a corporation by any Federal executive agen-
cy (as defined in section 6050M(b)).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply to—
360
‘‘(i) services under contracts described
in section 6050M(e)(3) with respect to
which 
the 
requirements 
of 
section
6050M(e)(2) are met, and
‘‘(ii) such other services as the Sec-
retary may specify in regulations pre-
scribed after the date of the enactment of
this paragraph.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to returns the due date for which
(determined without regard to any extension) is more than
90 days after the date of the enactment of this Act.
SEC. 1033. DISCLOSURE OF RETURN INFORMATION FOR AD-
MINISTRATION OF CERTAIN VETERANS PRO-
GRAMS.
(a) GENERAL RULE.—Subparagraph (D) of section
6103(l)(7) (relating to disclosure of return information to
Federal, State, and local agencies administering certain
programs) is amended by striking ‘‘Clause (viii) shall not
apply after September 30, 1998.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
361
SEC. 1034. CONTINUOUS LEVY ON CERTAIN PAYMENTS.
(a) IN GENERAL.—Section 6331 (relating to levy and
distraint) is amended—
(1) by redesignating subsection (h) as sub-
section (i), and
(2) by inserting after subsection (g) the follow-
ing new subsection:
‘‘(h) CONTINUING LEVY ON CERTAIN PAYMENTS.—
‘‘(1) IN
GENERAL.—The effect of a levy on
specified payments to or received by a taxpayer shall
be continuous from the date such levy is first made
until such levy is released. Notwithstanding section
6334, such continuous levy shall attach to up to 15
percent of any specified payment due to the tax-
payer.
‘‘(2) SPECIFIED PAYMENT.—For the purposes
of paragraph (1), the term ‘specified payment’
means—
‘‘(A) any Federal payment other than a
payment for which eligibility is based on the in-
come or assets (or both) of a payee,
‘‘(B) any payment described in paragraph
(4), (7), (9), or (11) of section 6334(a), and
‘‘(C) any annuity or pension payment
under the Railroad Retirement Act or benefit
under the Railroad Unemployment Insurance
362
Act described in subsection (a)(6) of this sec-
tion.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to levies issued after the date
of the enactment of this Act.
SEC. 1035. MODIFICATION OF LEVY EXEMPTION.
(a) IN GENERAL.—Section 6334 (relating to property
exempt from levy) is amended by redesignating subsection
(f) as subsection (g) and by inserting after subsection (e)
the following new subsection:
‘‘(f) LEVY ALLOWED ON CERTAIN SPECIFIED PAY-
MENTS.—Any payment described in subparagraph (B) or
(C) of section 6331(h)(2) shall not be exempt from levy
if the Secretary approves the levy thereon under section
6331(h).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to levies issued after the date
of the enactment of this Act.
SEC. 1036. CONFIDENTIALITY AND DISCLOSURE OF RE-
TURNS AND RETURN INFORMATION.
(a) IN GENERAL.—Subsection (k) of section 6103 is
amended by adding at the end the following new para-
graph:
‘‘(8) LEVIES ON CERTAIN GOVERNMENT PAY-
MENTS.—
363
‘‘(A) DISCLOSURE OF RETURN INFORMA-
TION IN LEVIES ON FINANCIAL MANAGEMENT
SERVICE.—In serving a notice of levy, or release
of such levy, with respect to any applicable gov-
ernment payment, the Secretary may disclose to
officers and employees of the Financial Man-
agement Service—
‘‘(i) return information, including tax-
payer identity information,
‘‘(ii) the amount of any unpaid liabil-
ity under this title (including penalties and
interest), and
‘‘(iii) the type of tax and tax period to
which such unpaid liability relates.
‘‘(B) RESTRICTION ON USE OF DISCLOSED
INFORMATION.—Return information disclosed
under subparagraph (A) may be used by offi-
cers and employees of the Financial Manage-
ment Service only for the purpose of, and to the
extent necessary in, transferring levied funds in
satisfaction of the levy, maintaining appropriate
agency records in regard to such levy or the re-
lease thereof, notifying the taxpayer and the
agency certifying such payment that the levy
364
has been honored, or in the defense of any liti-
gation ensuing from the honor of such levy.
‘‘(C) 
APPLICABLE
GOVERNMENT
PAY-
MENT.—For purposes of this paragraph, the
term ‘applicable government payment’ means—
‘‘(i) any Federal payment (other than
a payment for which eligibility is based on
the income or assets (or both) of a payee)
certified to the Financial Management
Service for disbursement, and
‘‘(ii) any other payment which is cer-
tified to the Financial Management Service
for disbursement and which the Secretary
designates by published notice.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 6301(p) is amended—
(A) in paragraph (3)(A), by striking ‘‘(2),
or (6)’’ and inserting ‘‘(2), (6), or (8), and
(B) 
in 
paragraph 
(4), 
by 
inserting
‘‘(k)(8),’’ after ‘‘(j) (1) or (2),’’ each place it
appears.
(2) Section 552a(a)(8)(B) of title 5, United
States Code, is amended by striking ‘‘or’’ at the end
of clause (v), by adding ‘‘or’’ at the end of clause
365
(vi), and by adding at the end the following new
clause:
‘‘(vii) matches performed incident to a
levy described in section 6103(k)(8) of the
Internal Revenue Code of 1986;’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to levies issued after the date of
the enactment of this Act.
SEC. 1037. RETURNS OF BENEFICIARIES OF ESTATES AND
TRUSTS REQUIRED TO FILE RETURNS CON-
SISTENT WITH ESTATE OR TRUST RETURN
OR TO NOTIFY SECRETARY OF INCONSIST-
ENCY.
(a) DOMESTIC
ESTATES
AND
TRUSTS.—Section
6034A (relating to information to beneficiaries of estates
and trusts) is amended by adding at the end the following
new subsection:
‘‘(c) BENEFICIARY’S RETURN MUST BE CONSISTENT
WITH ESTATE OR TRUST RETURN OR SECRETARY NOTI-
FIED OF INCONSISTENCY.—
‘‘(1) IN GENERAL.—A beneficiary of any estate
or trust to which subsection (a) applies shall, on
such beneficiary’s return, treat any reported item in
a manner which is consistent with the treatment of
such item on the applicable entity’s return.
366
‘‘(2) NOTIFICATION OF INCONSISTENT TREAT-
MENT.—
‘‘(A) IN GENERAL.—In the case of any re-
ported item, if—
‘‘(i)(I) the applicable entity has filed a
return but the beneficiary’s treatment on
such beneficiary’s return is (or may be) in-
consistent with the treatment of the item
on the applicable entity’s return, or
‘‘(II) the applicable entity has not
filed a return, and
‘‘(ii) the beneficiary files with the Sec-
retary a statement identifying the incon-
sistency,
paragraph (1) shall not apply to such item.
‘‘(B) BENEFICIARY RECEIVING INCORRECT
INFORMATION.—A beneficiary shall be treated
as having complied with clause (ii) of subpara-
graph (A) with respect to a reported item if the
beneficiary—
‘‘(i) demonstrates to the satisfaction
of the Secretary that the treatment of the
reported item on the beneficiary’s return is
consistent with the treatment of the item
on the statement furnished under sub-
367
section (a) to the beneficiary by the appli-
cable entity, and
‘‘(ii) elects to have this paragraph
apply with respect to that item.
‘‘(3) EFFECT OF FAILURE TO NOTIFY.—In any
case—
‘‘(A) described in subparagraph (A)(i)(I)
of paragraph (2), and
‘‘(B) in which the beneficiary does not
comply with subparagraph (A)(ii) of paragraph
(2),
any adjustment required to make the treatment of
the items by such beneficiary consistent with the
treatment of the items on the applicable entity’s re-
turn shall be treated as arising out of mathematical
or clerical errors and assessed according to section
6213(b)(1). Paragraph (2) of section 6213(b) shall
not apply to any assessment referred to in the pre-
ceding sentence.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) REPORTED
ITEM.—The term ‘re-
ported item’ means any item for which informa-
tion is required to be furnished under sub-
section (a).
368
‘‘(B) APPLICABLE ENTITY.—The term ‘ap-
plicable entity’ means the estate or trust of
which the taxpayer is the beneficiary.
‘‘(5) ADDITION TO TAX FOR FAILURE TO COM-
PLY WITH SECTION.—For addition to tax in the case
of a beneficiary’s negligence in connection with, or
disregard of, the requirements of this section, see
part II of subchapter A of chapter 68.’’
(b) FOREIGN TRUSTS.—Subsection (d) of section
6048 (relating to information with respect to certain for-
eign trusts) is amended by adding at the end the following
new paragraph:
‘‘(5) UNITED STATES PERSON’S RETURN MUST
BE
CONSISTENT
WITH
TRUST
RETURN
OR
SEC-
RETARY NOTIFIED OF INCONSISTENCY.—Rules simi-
lar to the rules of section 6034A(c) shall apply to
items reported by a trust under subsection (b)(1)(B)
and to United States persons referred to in such
subsection.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to returns of beneficiaries and own-
ers filed after the date of the enactment of this Act.
369
Subtitle E—Excise Tax Provisions
SEC. 1041. EXTENSION AND MODIFICATION OF AIRPORT
AND AIRWAY TRUST FUND TAXES.
(a) FUEL TAXES.—
(1) AVIATION
FUEL.—Clause (ii) of section
4091(b)(3)(A) is amended by striking ‘‘September
30, 1997’’ and inserting ‘‘September 30, 2007’’.
(2) AVIATION GASOLINE.—Subparagraph (B) of
section 4081(d)(2) is amended by striking ‘‘Septem-
ber 30, 1997’’ and inserting ‘‘September 30, 2007’’.
(3) 
NONCOMMERCIAL
AVIATION.—Subpara-
graph (B) of section 4041(c)(3) is amended by strik-
ing ‘‘September 30, 1997’’ and inserting ‘‘September
30, 2007’’.
(b) TICKET TAXES.—
(1) 
PERSONS.—Clause 
(ii) 
of 
section
4261(g)(1)(A) is amended by striking ‘‘September
30, 1997’’ and inserting ‘‘September 30, 2007’’.
(2) 
PROPERTY.—Clause 
(ii) 
of 
section
4271(d)(1)(A) is amended by striking ‘‘September
30, 1997’’ and inserting ‘‘September 30, 2007’’.
(c) MODIFICATIONS TO TAX ON TRANSPORTATION OF
PERSONS BY AIR.—
(1) IN
GENERAL.—Section 4261 (relating to
imposition of tax) is amended by striking sub-