(m), and (o)) who die or became disabled as a 
result of performing qualified military service 
prior to reemployment by the employer are cred-
ited with service and benefits on reasonably 
equivalent terms. 
‘‘(C) DETERMINATION OF BENEFITS.—The 
amount of employee contributions and the 
amount of elective deferrals of an individual 
treated as reemployed under subparagraph (A) 
for purposes of applying paragraph (8)(C) shall 
be determined on the basis of the individual’s av-
erage actual employee contributions or elective 
deferrals for the lesser of— 
‘‘(i) the 12-month period of service 
with the employer immediately prior to 
qualified military service, or 
‘‘(ii) if service with the employer is less 
than such 12-month period, the actual 
length of continuous service with the em-
ployer.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 404(a)(2) is amended by striking 
‘‘and (31)’’ and inserting ‘‘(31), and (37)’’. 
(2) Section 403(b) is amended by adding at the 
end the following new paragraph: 
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‘‘(14) DEATH BENEFITS UNDER USERRA-QUALI-
FIED
ACTIVE
MILITARY
SERVICE.—This subsection 
shall not apply to an annuity contract unless such 
contract 
meets 
the 
requirements 
of 
section 
401(a)(37).’’. 
(3) Section 457(g) is amended by adding at the 
end the following new paragraph: 
‘‘(4) DEATH BENEFITS UNDER USERRA-QUALI-
FIED ACTIVE MILITARY SERVICE.—A plan described 
in paragraph (1) shall not be treated as an eligible 
deferred compensation plan unless such plan meets 
the requirements of section 401(a)(37).’’. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply with respect to deaths and 
disabilities occurring on or after January 1, 2007. 
(2) PROVISIONS
RELATING
TO
PLAN
AMEND-
MENTS.— 
(A) IN GENERAL.—If this subparagraph ap-
plies to any plan or contract amendment, such 
plan or contract shall be treated as being oper-
ated in accordance with the terms of the plan 
during the period described in subparagraph 
(B)(iii). 
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(B) AMENDMENTS
TO
WHICH
SUBPARA-
GRAPH (A) APPLIES.— 
(i) IN
GENERAL.—Subparagraph (A) 
shall apply to any amendment to any plan 
or annuity contract which is made— 
(I) pursuant to the amendments 
made by subsection (a) or pursuant to 
any regulation issued by the Secretary 
of the Treasury under subsection (a), 
and 
(II) on or before the last day of 
the first plan year beginning on or 
after January 1, 2009. 
In the case of a governmental plan (as de-
fined in section 414(d) of the Internal Rev-
enue Code of 1986), this clause shall be ap-
plied by substituting ‘‘2011’’ for ‘‘2009’’ in 
subclause (II). 
(ii) 
CONDITIONS.—This 
paragraph 
shall not apply to any amendment unless— 
(I) the plan or contract is oper-
ated as if such plan or contract 
amendment were in effect for the pe-
riod described in clause (iii), and 
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(II) such plan or contract amend-
ment applies retroactively for such pe-
riod. 
(iii) PERIOD DESCRIBED.—The period 
described in this clause is the period— 
(I) beginning on the effective date 
specified by the plan, and 
(II) ending on the date described 
in clause (i)(II) (or, if earlier, the date 
the plan or contract amendment is 
adopted). 
SEC. 104. TREATMENT OF DIFFERENTIAL MILITARY PAY AS 
WAGES. 
(a) INCOME TAX WITHHOLDING ON DIFFERENTIAL 
WAGE PAYMENTS.— 
(1) IN GENERAL.—Section 3401 (relating to defi-
nitions) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(h) DIFFERENTIAL WAGE PAYMENTS
TO ACTIVE 
DUTY MEMBERS OF THE UNIFORMED SERVICES.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), any differential wage payment shall be treated as 
a payment of wages by the employer to the employee. 
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‘‘(2) DIFFERENTIAL WAGE PAYMENT.—For pur-
poses of paragraph (1), the term ‘differential wage 
payment’ means any payment which— 
‘‘(A) is made by an employer to an indi-
vidual with respect to any period during which 
the individual is performing service in the uni-
formed services (as defined in chapter 43 of title 
38, United States Code) while on active duty for 
a period of more than 30 days, and 
‘‘(B) represents all or a portion of the wages 
the individual would have received from the em-
ployer if the individual were performing service 
for the employer.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to remuneration paid after 
December 31, 2007. 
(b) TREATMENT OF DIFFERENTIAL WAGE PAYMENTS 
FOR RETIREMENT PLAN PURPOSES.— 
(1) PENSION PLANS.— 
(A) IN GENERAL.—Section 414(u) (relating 
to special rules relating to veterans’ reemploy-
ment rights under USERRA), as amended by 
section 103(b), is amended by adding at the end 
the following new paragraph: 
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‘‘(12) TREATMENT OF DIFFERENTIAL WAGE PAY-
MENTS.— 
‘‘(A) IN GENERAL.—Except as provided in 
this paragraph, for purposes of applying this 
title to a retirement plan to which this sub-
section applies— 
‘‘(i) an individual receiving a differen-
tial wage payment shall be treated as an 
employee of the employer making the pay-
ment, 
‘‘(ii) the differential wage payment 
shall be treated as compensation, and 
‘‘(iii) the plan shall not be treated as 
failing to meet the requirements of any pro-
vision described in paragraph (1)(C) by 
reason of any contribution or benefit which 
is based on the differential wage payment. 
‘‘(B) SPECIAL RULE FOR DISTRIBUTIONS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraph (A)(i), for purposes of section 
401(k)(2)(B)(i)(I), 
403(b)(7)(A)(ii), 
403(b)(11)(A), or 457(d)(1)(A)(ii), an indi-
vidual shall be treated as having been sev-
ered from employment during any period 
the individual is performing service in the 
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uniformed services described in section 
3401(h)(2)(A). 
‘‘(ii) LIMITATION.—If an individual 
elects to receive a distribution by reason of 
clause (i), the plan shall provide that the 
individual may not make an elective defer-
ral or employee contribution during the 6- 
month period beginning on the date of the 
distribution. 
‘‘(C) NONDISCRIMINATION REQUIREMENT.— 
Subparagraph (A)(iii) shall apply only if all 
employees of an employer (as determined under 
subsections (b), (c), (m), and (o)) performing 
service in the uniformed services described in sec-
tion 3401(h)(2)(A) are entitled to receive dif-
ferential wage payments on reasonably equiva-
lent terms and, if eligible to participate in a re-
tirement plan maintained by the employer, to 
make contributions based on the payments on 
reasonably equivalent terms. For purposes of ap-
plying this subparagraph, the provisions of 
paragraphs (3), (4), and (5) of section 410(b) 
shall apply. 
‘‘(D) DIFFERENTIAL WAGE PAYMENT.—For 
purposes of this paragraph, the term ‘differential 
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wage payment’ has the meaning given such term 
by section 3401(h)(2).’’. 
(B) CONFORMING AMENDMENT.—The head-
ing for section 414(u) is amended by inserting 
‘‘AND
TO DIFFERENTIAL WAGE PAYMENTS
TO 
MEMBERS ON ACTIVE DUTY’’ after ‘‘USERRA’’. 
(2) DIFFERENTIAL WAGE PAYMENTS TREATED AS 
COMPENSATION
FOR
INDIVIDUAL
RETIREMENT 
PLANS.—Section 219(f)(1) (defining compensation) is 
amended by adding at the end the following new sen-
tence: ‘‘The term compensation includes any differen-
tial 
wage 
payment 
(as 
defined 
in 
section 
3401(h)(2)).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to years beginning after 
December 31, 2007. 
(c) PROVISIONS RELATING TO PLAN AMENDMENTS.— 
(1) IN GENERAL.—If this subsection applies to 
any plan or annuity contract amendment, such plan 
or contract shall be treated as being operated in ac-
cordance with the terms of the plan or contract dur-
ing the period described in paragraph (2)(B)(i). 
(2) AMENDMENTS
TO
WHICH
SECTION
AP-
PLIES.— 
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(A) IN
GENERAL.—This subsection shall 
apply to any amendment to any plan or annu-
ity contract which is made— 
(i) pursuant to any amendment made 
by subsection (b)(1), and 
(ii) on or before the last day of the first 
plan year beginning on or after January 1, 
2009. 
In the case of a governmental plan (as defined 
in section 414(d) of the Internal Revenue Code 
of 1986), this subparagraph shall be applied by 
substituting ‘‘2011’’ for ‘‘2009’’ in clause (ii). 
(B) CONDITIONS.—This subsection shall not 
apply to any plan or annuity contract amend-
ment unless— 
(i) during the period beginning on the 
date the amendment described in subpara-
graph (A)(i) takes effect and ending on the 
date described in subparagraph (A)(ii) (or, 
if earlier, the date the plan or contract 
amendment is adopted), the plan or con-
tract is operated as if such plan or contract 
amendment were in effect, and 
(ii) such plan or contract amendment 
applies retroactively for such period. 
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SEC. 105. EXCLUSION FROM INCOME FOR BENEFITS PRO-
VIDED TO VOLUNTEER FIREFIGHTERS AND 
EMERGENCY MEDICAL RESPONDERS. 
(a) IN GENERAL.—Part III of subchapter B of chapter 
1 (relating to items specifically excluded from gross income) 
is amended by inserting after section 139A the following 
new section: 
‘‘SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIRE-
FIGHTERS AND EMERGENCY MEDICAL RE-
SPONDERS. 
‘‘(a) IN GENERAL.—In the case of any member of a 
qualified volunteer emergency response organization, gross 
income shall not include— 
‘‘(1) any qualified State and local tax benefit, 
and 
‘‘(2) any qualified payment. 
‘‘(b) DENIAL OF DOUBLE BENEFITS.—In the case of 
any member of a qualified volunteer emergency response or-
ganization— 
‘‘(1) the deduction under 164 shall be determined 
with regard to any qualified State and local tax ben-
efit, and 
‘‘(2) expenses paid or incurred by the taxpayer 
in connection with the performance of services as such 
a member shall be taken into account under section 
170 only to the extent such expenses exceed the 
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amount of any qualified payment excluded from gross 
income under subsection (a). 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
STATE
AND
LOCAL
TAX
BEN-
EFIT.—The term ‘qualified state and local tax benefit’ 
means any reduction or rebate of a tax described in 
paragraph (1), (2), or (3) of section 164(a) provided 
by a State or political division thereof on account of 
services performed as a member of a qualified volun-
teer emergency response organization. 
‘‘(2) QUALIFIED PAYMENT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
payment’ means any payment (whether reim-
bursement or otherwise) provided by a State or 
political division thereof on account of the per-
formance of services as a member of a qualified 
volunteer emergency response organization. 
‘‘(B) APPLICABLE
DOLLAR
LIMITATION.— 
The amount determined under subparagraph (A) 
for any taxable year shall not exceed $30 multi-
plied by the number of months during such year 
that the taxpayer performs such services. 
‘‘(3) QUALIFIED
VOLUNTEER
EMERGENCY
RE-
SPONSE ORGANIZATION.—The term ‘qualified volun-
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teer emergency response organization’ means any vol-
unteer organization— 
‘‘(A) which is organized and operated to 
provide firefighting or emergency medical serv-
ices for persons in the State or political subdivi-
sion, as the case may be, and 
‘‘(B) which is required (by written agree-
ment) by the State or political subdivision to 
furnish firefighting or emergency medical serv-
ices in such State or political subdivision.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
such part is amended by inserting after the item relating 
to section 139A the following new item: 
‘‘Sec. 139B. Benefits provided to volunteer firefighters and emergency medical re-
sponders.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
SEC. 106. SPECIAL PERIOD OF LIMITATION WHEN UNI-
FORMED SERVICES RETIRED PAY IS RE-
DUCED AS A RESULT OF AWARD OF DIS-
ABILITY COMPENSATION. 
(a) IN GENERAL.—Subsection (d) of section 6511 (re-
lating to special rules applicable to income taxes) is amend-
ed by adding at the end the following new paragraph: 
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‘‘(8) SPECIAL RULES WHEN UNIFORMED SERV-
ICES RETIRED PAY IS REDUCED AS A RESULT OF 
AWARD OF DISABILITY COMPENSATION.— 
‘‘(A) PERIOD
OF
LIMITATION
ON
FILING 
CLAIM.—If the claim for credit or refund relates 
to an overpayment of tax imposed by subtitle A 
on account of— 
‘‘(i) the reduction of uniformed services 
retired pay computed under section 1406 or 
1407 of title 10, United States Code, or 
‘‘(ii) the waiver of such pay under sec-
tion 5305 of title 38 of such Code, 
as a result of an award of compensation under 
title 38 of such Code pursuant to a determina-
tion by the Secretary of Veterans Affairs, the 3- 
year period of limitation prescribed in subsection 
(a) shall be extended, for purposes of permitting 
a credit or refund based upon the amount of such 
reduction or waiver, until the end of the 1-year 
period beginning on the date of such determina-
tion. 
‘‘(B) LIMITATION TO 5 TAXABLE YEARS.— 
Subparagraph (A) shall not apply with respect 
to any taxable year which began more than 5 
years before the date of such determination.’’. 
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(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to claims for credit or refund filed 
after the date of the enactment of this Act. 
(c) TRANSITION RULES.—In the case of a determina-
tion described in paragraph (8) of section 6511(d) of the 
Internal Revenue Code of 1986 (as added by this section) 
which is made by the Secretary of Veterans Affairs after 
December 31, 2000, and before the date of the enactment 
of this Act, such paragraph— 
(1) shall not apply with respect to any taxable 
year which began before January 1, 2001, and 
(2) shall be applied by substituting for ‘‘the date 
of such determination’’ in subparagraph (A) thereof. 
SEC. 107. DISTRIBUTIONS FROM RETIREMENT PLANS TO IN-
DIVIDUALS CALLED TO ACTIVE DUTY. 
(a) IN GENERAL.—Clause (iv) of section 72(t)(2)(G) 
is amended by striking ‘‘, and before December 31, 2007’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to individuals ordered or called to active 
duty on or after December 31, 2007. 
SEC. 108. DISCLOSURE OF RETURN INFORMATION RELAT-
ING TO VETERANS PROGRAMS MADE PERMA-
NENT. 
(a) IN
GENERAL.—Subparagraph (D) of section 
6103(l)(7) (relating to disclosure of return information to 
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Federal, State, and local agencies administering certain 
programs under the Social Security Act, the Food Stamp 
Act of 1977, or title 38, United States Code or certain hous-
ing assistance programs) is amended by striking the last 
sentence. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to requests made after September 30, 
2008. 
SEC. 109. CONTRIBUTIONS OF MILITARY DEATH GRATU-
ITIES TO ROTH IRAS AND EDUCATION SAV-
INGS ACCOUNTS. 
(a) PROVISION IN EFFECT BEFORE PENSION PROTEC-
TION ACT.—Subsection (e) of section 408A (relating to 
qualified rollover contribution), as in effect before the 
amendments made by section 824 of the Pension Protection 
Act of 2006, is amended to read as follows: 
‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified rollover 
contribution’ means a rollover contribution to a Roth 
IRA from another such account, or from an indi-
vidual retirement plan, but only if such rollover con-
tribution meets the requirements of section 408(d)(3). 
Such term includes a rollover contribution described 
in section 402A(c)(3)(A). For purposes of section 
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408(d)(3)(B), there shall be disregarded any qualified 
rollover contribution from an individual retirement 
plan (other than a Roth IRA) to a Roth IRA. 
‘‘(2) MILITARY DEATH GRATUITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
rollover contribution’ includes a contribution to 
a Roth IRA maintained for the benefit of an in-
dividual made before the end of the 1-year period 
beginning on the date on which such individual 
receives an amount under section 1477 of title 
10, United States Code, or section 1967 of title 
38 of such Code, with respect to a person, to the 
extent that such contribution does not exceed— 
‘‘(i) the sum of the amounts received 
during such period by such individual 
under such sections with respect to such 
person, reduced by 
‘‘(ii) the amounts so received which 
were contributed to a Coverdell education 
savings account under section 530(d)(9). 
‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLL-
OVERS
NOT
TO
APPLY.—Section 408(d)(3)(B) 
shall not apply with respect to amounts treated 
as a rollover by subparagraph (A). 
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‘‘(C) APPLICATION
OF
SECTION
72.—For 
purposes of applying section 72 in the case of a 
distribution which is not a qualified distribu-
tion, the amount treated as a rollover by reason 
of subparagraph (A) shall be treated as invest-
ment in the contract.’’. 
(b) PROVISION IN EFFECT AFTER PENSION PROTEC-
TION ACT.—Subsection (e) of section 408A, as in effect after 
the amendments made by section 824 of the Pension Protec-
tion Act of 2006, is amended to read as follows: 
‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified rollover 
contribution’ means a rollover contribution— 
‘‘(A) to a Roth IRA from another such ac-
count, 
‘‘(B) from an eligible retirement plan, but 
only if— 
‘‘(i) in the case of an individual retire-
ment plan, such rollover contribution meets 
the requirements of section 408(d)(3), and 
‘‘(ii) in the case of any eligible retire-
ment 
plan 
(as 
defined 
in 
section 
402(c)(8)(B) other than clauses (i) and (ii) 
thereof), such rollover contribution meets the 
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requirements of section 402(c), 403(b)(8), or 
457(e)(16), as applicable. 
For purposes of section 408(d)(3)(B), there shall 
be disregarded any qualified rollover contribu-
tion from an individual retirement plan (other 
than a Roth IRA) to a Roth IRA. 
‘‘(2) MILITARY DEATH GRATUITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
rollover contribution’ includes a contribution to 
a Roth IRA maintained for the benefit of an in-
dividual made before the end of the 1-year period 
beginning on the date on which such individual 
receives an amount under section 1477 of title 
10, United States Code, or section 1967 of title 
38 of such Code, with respect to a person, to the 
extent that such contribution does not exceed— 
‘‘(i) the sum of the amounts received 
during such period by such individual 
under such sections with respect to such 
person, reduced by 
‘‘(ii) the amounts so received which 
were contributed to a Coverdell education 
savings account under section 530(d)(9). 
‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLL-
OVERS
NOT
TO
APPLY.—Section 408(d)(3)(B) 
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shall not apply with respect to amounts treated 
as a rollover by the subparagraph (A). 
‘‘(C) APPLICATION
OF
SECTION
72.—For 
purposes of applying section 72 in the case of a 
distribution which is not a qualified distribu-
tion, the amount treated as a rollover by reason 
of subparagraph (A) shall be treated as invest-
ment in the contract.’’. 
(c) EDUCATION SAVINGS ACCOUNTS.—Subsection (d) 
of section 530 is amended by adding at the end the following 
new paragraph: 
‘‘(9) MILITARY DEATH GRATUITY.— 
‘‘(A) IN
GENERAL.—For purposes of this 
section, the term ‘rollover contribution’ includes 
a contribution to a Coverdell education savings 
account made before the end of the 1-year period 
beginning on the date on which the contributor 
receives an amount under section 1477 of title 
10, United States Code, or section 1967 of title 
38 of such Code, with respect to a person, to the 
extent that such contribution does not exceed— 
‘‘(i) the sum of the amounts received 
during such period by such contributor 
under such sections with respect to such 
person, reduced by 
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‘‘(ii) the amounts so received which 
were contributed to a Roth IRA under sec-
tion 408A(e)(2) or to another Coverdell edu-
cation savings account. 
‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLL-
OVERS
NOT
TO
APPLY.—The last sentence of 
paragraph (5) shall not apply with respect to 
amounts treated as a rollover by the subpara-
graph (A). 
‘‘(C) APPLICATION
OF
SECTION
72.—For 
purposes of applying section 72 in the case of a 
distribution which is includible in gross income 
under paragraph (1), the amount treated as a 
rollover by reason of subparagraph (A) shall be 
treated as investment in the contract.’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided by para-
graphs (2) and (3), the amendments made by this sec-
tion shall apply with respect to deaths from injuries 
occurring on or after the date of the enactment of this 
Act. 
(2) APPLICATION OF AMENDMENTS TO DEATHS 
FROM INJURIES OCCURRING ON OR AFTER OCTOBER 7, 
2001, AND
BEFORE
ENACTMENT.—The amendments 
made by this section shall apply to any contribution 
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made pursuant to section 408A(e)(2) or 530(d)(5) of 
the Internal Revenue Code of 1986, as amended by 
this Act, with respect to amounts received under sec-
tion 1477 of title 10, United States Code, or under 
section 1967 of title 38 of such Code, for deaths from 
injuries occurring on or after October 7, 2001, and 
before the date of the enactment of this Act if such 
contribution is made not later than 1 year after the 
date of the enactment of this Act. 
(3) PENSION PROTECTION ACT CHANGES.—Sec-
tion 408A(e)(1) of the Internal Revenue Code of 1986 
(as in effect after the amendments made by subsection 
(b)) shall apply to taxable years beginning after De-
cember 31, 2007. 
SEC. 110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE 
WITH THE PEACE CORPS. 
(a) IN GENERAL.—Subsection (d) of section 121 (relat-
ing to special rules) is amended by adding at the end the 
following new paragraph: 
‘‘(12) PEACE CORPS.— 
‘‘(A) IN GENERAL.—At the election of an 
individual with respect to a property, the run-
ning of the 5-year period described in subsections 
(a) and (c)(1)(B) and paragraph (7) of this sub-
section with respect to such property shall be sus-
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pended during any period that such individual 
or such individual’s spouse is serving outside the 
United States— 
‘‘(i) on qualified official extended duty 
(as defined in paragraph (9)(C)) as an em-
ployee of the Peace Corps, or 
‘‘(ii) as an enrolled volunteer or volun-
teer leader under section 5 or 6 (as the case 
may be) of the Peace Corps Act (22 U.S.C. 
2504, 2505). 
‘‘(B) APPLICABLE RULES.—For purposes of 
subparagraph (A), rules similar to the rules of 
subparagraphs (B) and (D) shall apply.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to taxable years beginning after De-
cember 31, 2007. 
TITLE 
II—IMPROVEMENTS 
IN 
SUPPLEMENTAL 
SECURITY 
INCOME 
SEC. 201. TREATMENT OF UNIFORMED SERVICE CASH RE-
MUNERATION AS EARNED INCOME. 
(a) IN GENERAL.—Section 1612(a)(1)(A) of the Social 
Security Act (42 U.S.C. 1382a(a)(1)(A)) is amended by in-
serting ‘‘(and, in the case of cash remuneration paid for 
service as a member of a uniformed service (other than pay-
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ments described in paragraph (2)(H) of this subsection or 
subsection (b)(20)), without regard to the limitations con-
tained in section 209(d))’’ before the semicolon. 
(b) CERTAIN HOUSING PAYMENTS TREATED AS IN- 
KIND SUPPORT AND MAINTENANCE.—Section 1612(a)(2) of 
such Act (42 U.S.C. 1382a(a)(2)) is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (F); 
(2) by striking the period at the end of subpara-
graph (G) and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(H) payments to or on behalf of a member 
of a uniformed service for housing of the member 
(and his or her dependents, if any) on a facility 
of a uniformed service, including payments pro-
vided under section 403 of title 37, United States 
Code, for housing that is acquired or constructed 
under subchapter IV of chapter 169 of title 10 of 
such Code, or any related provision of law, and 
any such payments shall be treated as support 
and maintenance in kind subject to subpara-
graph (A) of this paragraph.’’. 
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ual’s being a veteran (as defined in section 101 of 
title 38, United States Code) and blind.’’. 
SEC. 203. EXCLUSION OF AMERICORPS BENEFITS FOR PUR-
POSES OF DETERMINING SUPPLEMENTAL SE-
CURITY INCOME ELIGIBILITY AND BENEFIT 
AMOUNTS. 
Section 1612(b) of the Social Security Act (42 U.S.C. 
1382a(b)), as amended by section 202(a) of this Act, is 
amended— 
(1) in paragraph (23), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (24), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(25) any benefit (whether cash or in-kind) con-
ferred upon (or paid on behalf of) a
participant in 
an AmeriCorps position approved by the Corporation 
for
National and Community Service under section 
123 of the National and Community Service Act of 
1990 (42 U.S.C. 12573).’’. 
SEC. 204. EFFECTIVE DATE. 
The amendments made by this title shall be effective 
with respect to benefits payable for months beginning after 
60 days after the date of the enactment of this Act. 
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TITLE III—REVENUE 
PROVISIONS 
SEC. 301. MODIFICATION OF PENALTY FOR FAILURE TO 
FILE PARTNERSHIP RETURNS. 
(a) EXTENSION OF TIME LIMITATION.—Subsection (a) 
of section 6698 (relating to general rule) is amended by 
striking ‘‘5 months’’ and inserting ‘‘12 months’’. 
(b) INCREASE IN PENALTY AMOUNT.—Paragraph (1) 
of section 6698(b) is amended by striking ‘‘$50’’ and insert-
ing ‘‘$100’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to returns required to be filed after the 
date of the enactment of this Act. 
SEC. 302. PENALTY FOR FAILURE TO FILE S CORPORATION 
RETURNS. 
(a) IN GENERAL.—Part I of subchapter B of chapter 
68 (relating to assessable penalties) is amended by adding 
at the end the following new section: 
‘‘SEC. 6699. FAILURE TO FILE S CORPORATION RETURN. 
‘‘(a) GENERAL RULE.—In addition to the penalty im-
posed by section 7203 (relating to willful failure to file re-
turn, supply information, or pay tax), if any S corporation 
required to file a return under section 6037 for any taxable 
year— 
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‘‘(1) fails to file such return at the time pre-
scribed therefor (determined with regard to any exten-
sion of time for filing), or 
‘‘(2) files a return which fails to show the infor-
mation required under section 6037, 
such S corporation shall be liable for a penalty determined 
under subsection (b) for each month (or fraction thereof) 
during which such failure continues (but not to exceed 12 
months), unless it is shown that such failure is due to rea-
sonable cause. 
‘‘(b) AMOUNT PER MONTH.—For purposes of sub-
section (a), the amount determined under this subsection 
for any month is the product of— 
‘‘(1) $100, multiplied by 
‘‘(2) the number of persons who were share-
holders in the S corporation during any part of the 
taxable year. 
‘‘(c) ASSESSMENT OF PENALTY.—The penalty imposed 
by subsection (a) shall be assessed against the S corpora-
tion. 
‘‘(d) DEFICIENCY PROCEDURES NOT TO APPLY.—Sub-
chapter B of chapter 63 (relating to deficiency procedures 
for income, estate, gift, and certain excise taxes) shall not 
apply in respect of the assessment or collection of any pen-
alty imposed by subsection (a).’’. 
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(b) CLERICAL AMENDMENT.—The table of sections for 
part I of subchapter B of chapter 68 is amended by adding 
at the end the following new item: 
‘‘Sec. 6699. Failure to file S corporation return.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to returns required to be filed after the 
date of the enactment of this Act. 
SEC. 303. INCREASE IN INFORMATION RETURN PENALTIES. 
(a) FAILURE TO FILE CORRECT INFORMATION RE-
TURNS.— 
(1) IN GENERAL.—Subsections (a)(1), (b)(1)(A), 
and (b)(2)(A) of section 6721 are each amended by 
striking ‘‘$50’’ and inserting ‘‘$100’’. 
(2) AGGREGATE
ANNUAL
LIMITATION.—Sub-
sections (a)(1), (d)(1)(A), and (e)(3)(A) of section 
6721 are each amended by striking ‘‘$250,000’’ and 
inserting ‘‘$600,000’’. 
(b) REDUCTION WHERE CORRECTION WITHIN 30 
DAYS.— 
(1) IN GENERAL.—Subparagraph (A) of section 
6721(b)(1) is amended by striking ‘‘$15’’ and insert-
ing ‘‘$25’’. 
(2) AGGREGATE
ANNUAL
LIMITATION.—Sub-
sections (b)(1)(B) and (d)(1)(B) of section 6721 are 
each amended by striking ‘‘$75,000’’ and inserting 
‘‘$200,000’’. 
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(c) REDUCTION WHERE CORRECTION ON OR BEFORE 
AUGUST 1.— 
(1) IN GENERAL.—Subparagraph (A) of section 
6721(b)(2) is amended by striking ‘‘$30’’ and insert-
ing ‘‘$60’’. 
(2) AGGREGATE
ANNUAL
LIMITATION.—Sub-
sections (b)(2)(B) and (d)(1)(C) of section 6721 are 
each amended by striking ‘‘$150,000’’ and inserting 
‘‘$400,000’’. 
(d) AGGREGATE ANNUAL LIMITATIONS FOR PERSONS 
WITH GROSS RECEIPTS OF NOT MORE THAN $5,000,000.— 
Paragraph (1) of section 6721(d) is amended— 
(1) by striking ‘‘$100,000’’ in subparagraph (A) 
and inserting ‘‘$250,000’’, 
(2) by striking ‘‘$25,000’’ in subparagraph (B) 
and inserting ‘‘$75,000’’, and 
(3) by striking ‘‘$50,000’’ in subparagraph (C) 
and inserting ‘‘$150,000’’. 
(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.— 
Paragraph (2) of section 6721(e) is amended by striking 
‘‘$100’’ and inserting ‘‘$250’’. 
(f) FAILURE TO FURNISH CORRECT PAYEE STATE-
MENTS.— 
(1) IN GENERAL.—Subsection (a) of section 6722 
is amended by striking ‘‘$50’’ and inserting ‘‘$100’’. 
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(2) AGGREGATE
ANNUAL
LIMITATION.—Sub-
sections (a) and (c)(2)(A) of section 6722 are each 
amended by striking ‘‘$100,000’’ and inserting 
‘‘$600,000’’. 
(3) PENALTY
IN
CASE
OF
INTENTIONAL
DIS-
REGARD.—Paragraph (1) of section 6722(c) is 
amended by striking ‘‘$100’’ and inserting ‘‘$250’’. 
(g) FAILURE TO COMPLY WITH OTHER INFORMATION 
REPORTING REQUIREMENTS.—Section 6723 is amended— 
(1) by striking ‘‘$50’’ and inserting ‘‘$100’’, and 
(2) by striking ‘‘$100,000’’ and inserting 
‘‘$600,000’’. 
(h) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to information returns re-
quired to be filed on or after January 1, 2008. 
SEC. 304. INCREASE IN MINIMUM PENALTY ON FAILURE TO 
FILE A RETURN OF TAX. 
(a) IN GENERAL.—Subsection (a) of section 6651 is 
amended by striking ‘‘$100’’ in the last sentence and insert-
ing ‘‘$225’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to returns the due date for the filing 
of which (including extensions) is after December 31, 2007. 
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Union Calendar No. 268 
110TH CONGRESS 
1ST SESSION 
H. R. 3997 
[Report No. 110–426] 
A BILL 
To amend the Internal Revenue Code of 1986 to 
provide earnings assistance and tax relief to 
members of the uniformed services, volunteer 
firefighters, and Peace Corps volunteers, and for 
other purposes. 
NOVEMBER 5, 2007 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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