I 
111TH CONGRESS 
1ST SESSION H. R. 4068 
To amend the Internal Revenue Code of 1986 to limit the penalty for 
failure to disclose reportable transactions based on resulting tax benefits, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 16, 2009 
Mr. LEWIS of Georgia (for himself and Mr. BOUSTANY) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to limit the 
penalty for failure to disclose reportable transactions 
based on resulting tax benefits, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Pen-
alty Relief Act of 2009’’. 
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SEC. 2. LIMITATION ON PENALTY FOR FAILURE TO DIS-
CLOSE REPORTABLE TRANSACTIONS BASED 
ON RESULTING TAX BENEFITS. 
(a) IN GENERAL.—Subsection (b) of section 6707A 
of the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the amount of the penalty 
under subsection (a) with respect to any reportable 
transaction shall be 75 percent of the decrease in 
tax shown on the return as a result of such trans-
action (or which would have resulted from such 
transaction if such transaction were respected for 
Federal tax purposes). 
‘‘(2) MAXIMUM PENALTY.—The amount of the 
penalty under subsection (a) with respect to any re-
portable transaction shall not exceed— 
‘‘(A) in the case of a listed transaction, 
$200,000 ($100,000 in the case of a natural 
person), or 
‘‘(B) in the case of any other reportable 
transaction, $50,000 ($10,000 in the case of a 
natural person). 
‘‘(3) MINIMUM PENALTY FOR LISTED TRANS-
ACTIONS.—In the case of a listed transaction, the 
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amount of the penalty under subsection (a) with re-
spect to such transaction shall not be less than 
$10,000 ($5,000 in the case of a natural person).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to penalties assessed after Decem-
ber 31, 2006. 
SEC. 3. REPORT ON TAX SHELTER PENALTIES AND CER-
TAIN OTHER ENFORCEMENT ACTIONS. 
(a) IN GENERAL.—The Commissioner of Internal 
Revenue, in consultation with the Secretary of the Treas-
ury, shall submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on 
Finance of the Senate an annual report on the penalties 
assessed by the Internal Revenue Service during the pre-
ceding year under each of the following provisions of the 
Internal Revenue Code of 1986: 
(1) Section 6662A (relating to accuracy-related 
penalty on understatements with respect to report-
able transactions). 
(2) Section 6700(a) (relating to promoting abu-
sive tax shelters). 
(3) Section 6707 (relating to failure to furnish 
information regarding reportable transactions). 
(4) Section 6707A (relating to failure to include 
reportable transaction information with return). 
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(5) Section 6708 (relating to failure to main-
tain lists of advisees with respect to reportable 
transactions). 
(b) ADDITIONAL
INFORMATION.—The report re-
quired under subsection (a) shall also include information 
on the following with respect to each year: 
(1) Any action taken under section 330(b) of 
title 31, United States Code, with respect to any re-
portable transaction (as defined in section 6707A(c) 
of the Internal Revenue Code of 1986). 
(2) Any extension of the time for assessment of 
tax enforced, or assessment of any amount under 
such an extension, under paragraph (10) of section 
6501(c) of the Internal Revenue Code of 1986. 
(c) DATE OF REPORT.—The first report required 
under subsection (a) shall be submitted not later than 
June 1, 2010. 
Æ 
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