117
(13) Section 6344 (relating to cross references). 
(14) Section 6411 (relating to carrybacks). 
(15) Section 6413 (relating to employment 
taxes). 
(16) Section 6414 (relating to withheld income 
taxes). 
(17) Section 6422 (relating to cross references). 
(18) Section 6425 (relating to overpayment of 
corporate estimated taxes). 
(19) Section 6504 (relating to cross references). 
(20) Section 6652 (relating to failure to file 
certain information returns). 
(21) Sections 6654 and 6655 (relating to fail-
ure to payment estimated income tax). 
(22) Section 6662 (relating to penalties). 
(23) Sections 6677 through 6711 (relating to 
income tax related penalties). 
(24) Part II of subchapter B of chapter 68 (re-
lating to certain information returns). 
(25) Part I of subchapter A of chapter 70 (re-
lating to termination of taxable year). 
(26) 
Section 
6864 
(relating 
to 
certain 
carrybacks). 
(27) Section 7103 (relating to cross references).
118
(28) Section 7204 (relating to withholding 
statements). 
(29) Section 7211 (relating certain statements). 
(30) Section 7231 (relating to failure to obtain 
certain licenses). 
(31) Section 7270 (relating to insurance poli-
cies). 
(32) Section 7404 (relating to estate taxes). 
(33) Section 7404 (relating to income tax pre-
parers). 
(34) Section 7408 (relating to income tax shel-
ters). 
(35) Section 7409 (relating to 501(c)(3) organi-
zations). 
(36) Section 7427 (relating to income tax pre-
parers). 
(37) Section 7428 (relating to 501(c)(3) organi-
zations). 
(38) Section 7476 (relating to declaratory judg-
ments relating to retirement plans). 
(39) Section 7478 (relating to declaratory judg-
ments relating to certain tax-exempt obligations). 
(40) Section 7508 (relating to postponing time 
for certain actions required by the income, estate, 
and gift tax).
119
(41) Section 7509 (relating to Postal Service 
payroll taxes). 
(42) Section 7512 (relating to payroll taxes). 
(43) Section 7517 (relating to estate and gift 
tax evaluation). 
(44) Section 7518 (relating to Merchant Marine 
tax incentives). 
(45) Section 7519 (relating to taxable years). 
(46) Section 7520 (relating to insurance and 
annuity valuation tables). 
(47) Section 7523 (relating to reporting Fed-
eral income and outlays on Form 1040s). 
(48) Section 7611 (relating to church income 
tax exemptions and church unrelated business in-
come tax inquiries). 
(49) Section 7654 (relating to possessions’ in-
come taxes). 
(50) Section 7655 (relating to cross references). 
(51) Section 7701(a)(16). 
(52) Section 7701(a)(19). 
(53) Section 7701(a)(20). 
(54) Paragraphs (32) through (38) of section 
7701(a). 
(55) Paragraphs (41) through (46) of section 
7701(a).
120
(56) Section 7701(b). 
(57) Subsections (e) through (m) of section 
7701. 
(58) Section 7702 (relating to life insurance 
contracts). 
(59) Section 7702A (relating to modified en-
dowment contracts). 
(60) Section 7702B (relating to long-term care 
insurance). 
(61) Section 7703 (relating to the determina-
tion of marital status). 
(62) Section 7704 (relating to publicly traded 
partnerships). 
(63) Section 7805. 
(64) Section 7851. 
(65) Section 7872. 
(66) Section 7873. 
(b) OTHER CONFORMING AND TECHNICAL AMEND-
MENTS.—
(1) Section 6151 is amended by striking sub-
section (b) and by redesignating subsection (c) as 
subsection (b). 
(2) Section 6161 is amended to read as follows:
121
‘‘SEC. 616. EXTENSION OF TIME FOR PAYING TAX. 
‘‘The Secretary, except as otherwise provided in this 
title, may extend the time for payment of the amount of 
the tax shown or required to be shown on any return, re-
port, or declaration required under authority of this title 
for a reasonable period not to exceed 6 months (12 months 
in the case of a taxpayer who is abroad).’’. 
(3) Section 6211(a) is amended—
(A) by striking ‘‘income, estate and gift 
taxes imposed by subtitles A and B and’’, 
(B) by striking ‘‘subtitle A or B, or’’, and 
(C) by striking ‘‘, as defined in subsection 
(b)(2),’’ in paragraph (2). 
(4) Section 6211(b) is amended to read as fol-
lows: 
‘‘(b) REBATE DEFINED.—For purposes of subsection 
(a)(2), the term ‘rebate’ means so much of an abatement, 
credit, refund, or other payment, as was made on the 
ground that the tax imposed by chapter 41, 42, 43, or 
44 was less than the excess of the amount specified in 
subsection (a)(1) over the rebates previously made.’’. 
(5) Section 6212 is amended to read as follows: 
‘‘(b) ADDRESS FOR NOTICE OF DEFICIENCY.—In the 
absence of notice to the Secretary under section 6903 of 
the existence of a fiduciary relationship, notice of a defi-
ciency in respect of a tax imposed by chapter 42, 43, or
122
44 if mailed to the taxpayer at his last known address, 
shall be sufficient for purposes of such chapter and this 
chapter even if such taxpayer is deceased, or is under a 
legal disability, or, in the case of a corporation has termi-
nated its existence.’’. 
(6) Section 6302(b) is amended by striking 
‘‘21,’’. 
(7) Section 6302 is amended by striking sub-
sections (g) and (i) and by redesignating subsection 
(h) as subsection (g) 
(8) Section 6325 is amended by striking sub-
section (c) and by redesignating subsections (d) 
through (h) as subsections (c) through (g), respec-
tively. 
(9) Section 6402(d) is amended by striking 
paragraph (3). 
(10) Section 6402 is amended by striking sub-
section (j) and by redesignating subsection (k) as 
subsection (j). 
(11) Section 6501 (b) is amended—
(A) by striking ‘‘except tax imposed by 
chapter 3, 21, or 24,’’ in paragraph (1), and 
(B) by striking paragraph (2) and by re-
designation paragraphs (3) and (4) as para-
graphs (2) and (3), respectively.
123
(12) Section 6501(c) is amended by striking 
paragraphs (5) through (9) 
(13) Section 6501(e) is amended by striking 
‘‘subsection (c)—’’ and all that follows through 
‘‘subtitle D’’ in paragraph (3) and inserting ‘‘sub-
section (c), in the case of a return of a tax imposed 
under a provision of subtitle B’’. 
(14) Section 6501 is amended by striking sub-
section (f) through (k) and subsections (m) and (n) 
and by redesignating subsection (1) as subsection 
(f). 
(15) Section 6503(a) is amended—
(A) by striking paragraph (2), 
(B) by striking ‘‘DEFICIENCY.—’’and all 
that follows through ‘‘The running’’ and insert-
ing ‘‘DEFICIENCY.—The running’’, and 
(C) by striking ‘‘income, estate, gift and’’. 
(16) Section 6503 is amended by striking sub-
sections (e), (f), (i), and (k) and by redesignating 
subsections (g), (h), and (j) as subsections (e), (f), 
and (g), respectively. 
(17) Section 6511 is amended by striking sub-
sections (d) and (g) and by redesignating sub-
sections (f) and (h) as subsections (d) and (e), re-
spectively.
124
(18) Section 6512(b)(1) is amended by striking 
‘‘of income tax for the same taxable year, of gift tax 
for the same calendar year or calendar quarter, of 
estate tax in respect of the taxable estate of the 
same decedent or’’. 
(19) Section 6513 is amended—
(A) by striking ‘‘(a) EARLY RETURN OR 
ADVANCE PAYMENT OF TAX.—’’,
(B) by striking subsections (b) and (e). 
(20) Chapter 67 is amended by striking sub-
chapters A through D and inserting the following: 
‘‘SEC. 6601. INTEREST ON OVERPAYMENTS AND UNDER-
PAYMENT. 
(a) UNDERPAYMENTS.—If any amount of tax im-
posed by this title is not paid on or before the last date 
prescribed for payment, interest on such amount at the 
Federal short-term rate (as defined in section 512(b)) 
shall be paid from such last date to the date paid. 
‘‘(b) OVERPAYMENTS.—Interest shall be allowed and 
paid upon any overpayment in respect of any internal rev-
enue tax at the Federal short-term rate (as defined in sec-
tion 512(b)) from 60 days after the date of the overpay-
ment until the date the overpayment is refunded.’’.
125
(21) Section 6651(a)(1) is amended by striking 
‘‘subchapter A of chapter 61 (other than part III 
thereof,’’. 
(22) Section 6656 is amended by striking sub-
section (c) and by redesignating subsection (d) as 
subsection (c). 
(23) Section 6663 is amended by striking sub-
section (c). 
(24) Section 6664(c) is amended—
(A) by striking ‘‘EXCEPTION.—’’ and all 
that follows through ‘‘No penalty’’ and insert-
ing ‘‘EXCEPTION.—No penalty,’’ and 
(B) by striking paragraphs (2) and (3). 
(25) Chapter 72 is amended by striking all 
matter preceding section 7011. 
(26) Section 7422 is amended by striking sub-
sections (h) and (i) and by redesignating subsections 
(j) and (k) as subsections (h) and (i), respectively. 
(27) Section 7451 is amended to read as fol-
lows: 
‘‘SEC. 7451. FEE FOR FILING PETITION. 
‘‘The Tax Court is authorized to impose a fee in an 
amount not in excess of $60 to be fixed by the Tax Court 
for the filing of any petition for the redetermination of 
a deficiency.’’.
126
(28) Section 7454 is amended by striking sub-
section (b) and by redesignating subsection (c) as 
subsection (b). 
(29) Section 7463(a) is amended—
(A) by striking paragraphs (2) and (3), 
(B) by redesignating paragraph (4) as 
paragraph (2), and 
(C) by striking ‘‘D’’ in paragraph (2) (as 
so redesignated) and inserting ‘‘B’’. 
(30) Section 7463(c) is amended by striking 
‘‘sections 6214(a) and’’ and inserting ‘‘section’’. 
(31) Section 7463(c) is amended by striking ‘‘, 
to the extent that the procedures described in sub-
chapter B of chapter 63 apply’’. 
(32) Section 7481 is amended by striking sub-
section (d). 
(33) Section 7608 is amended by striking ‘‘sub-
title E’’ each place it appears and inserting ‘‘subtitle 
C’’. 
(34) Section 7651 is amended by striking para-
graph (5).
(35) Section 7701(a)(29) is amended by strik-
ing ‘‘1986’’ and inserting ‘‘2003’’. 
(36) Section 7809(c) is amended by striking 
paragraphs (1) and (4) and by redesignating para-
127
graphs (2) and (3) as paragraphs (1) and (2), re-
spectively. 
(37) Section 7871(a) is amended by striking 
paragraphs (1) and (3) through (6) and by redesig-
nating paragraphs (2) and (7) as paragraphs (1) 
and (2), respectively. 
(38) Section 7871 is amended by striking sub-
section (c) and by redesignating subsections (d) and 
(e) as subsections (c) and (d), respectively. 
(39) Section 8021 is amended by striking sub-
section (a) and by redesignating subsections (b) 
through (f) as subsections (a) through (e), respec-
tively. 
(40) Section 8022(a)(2)(A) is amended by 
striking ‘‘, particularly the income tax’’. 
(41) Section 8023 is amended by striking ‘‘In-
ternal Revenue Service’’ each place it appears and 
inserting ‘‘Department of the Treasury’’. 
(42) Section 9501(b)(2) is amended by striking 
subparagraph (C). 
(43) Section 9702(a) is amended by striking 
paragraph (4). 
(44) Section 9705(a) is amended by striking 
paragraph (4) and by redesignating paragraph (5) 
as paragraph (4).
128
(45) Section 9706(d)(2)(A) is amended by 
striking ‘‘6103’’ and inserting ‘‘605(e)’’. 
(46) Section 9707 is amended by striking sub-
section (f). 
(47) Section 9712(d) is amended by striking 
paragraph (5) and by redesignating paragraph (6) 
as paragraph (5). 
(48) Section 9803(a) is amended by striking 
‘‘(as defined in section 414(f))’’. 
TITLE III—OTHER MATTERS 
SEC. 301. PHASE-OUT OF ADMINISTRATION OF REPEALED 
FEDERAL TAXES. 
(a) APPROPRIATIONS.—Appropriations for any ex-
penses of the Internal Revenue Service including proc-
essing tax returns for years prior to the repeal of the taxes 
repealed by title I of this Act, revenue accounting, man-
agement, transfer of payroll and wage data to the Social 
Security Administration for years after fiscal year 2007 
shall not be authorized. 
(b) RECORDS.—Federal records related to the admin-
istration of taxes repealed by title I of this Act shall be 
destroyed by the end of fiscal year 2007, except that any 
records necessary to calculate Social Security benefits 
shall be retained by the Social Security Administration 
and any records necessary to support ongoing litigation
129
with respect to taxes owed or refunds due shall be retained 
until final disposition of such litigation. 
(c) CONFORMING AMENDMENTS.—Section 7802 is 
amended—
(1) by striking subsections (a) and (b) and by 
redesignating subsections (c) and (d) as subsections 
(a) and (b), 
(2) by striking ‘‘Internal Revenue Service’’ each 
place it appears and inserting ‘‘Department of the 
Treasury’’, and 
(3) by striking ‘‘Commissioner’’ or ‘‘Commis-
sioner of Internal Revenue’’ each place they appear 
and inserting ‘‘Secretary’’. 
(d) EFFECTIVE DATE.—The amendments made by 
subsection (c) shall take effect on January 1, 2007. 
SEC. 302. ADMINISTRATION OF OTHER FEDERAL TAXES. 
(a) IN GENERAL.—Section 7801 (relating to the au-
thority of the Department of the Treasury) is amended 
by adding at the end the following: 
‘‘(d) EXCISE TAX BUREAU.—There shall be in the 
Department of the Treasury an Excise Tax Bureau to ad-
minister those excise taxes not administered by the Bu-
reau of Alcohol, Tobacco and Firearms. 
‘‘(e) SALES TAX BUREAU.—There shall be in the De-
partment of the Treasury a Sales Tax Bureau to admin-
130
ister the national sales tax in those States where it is re-
quired pursuant to section 404, and to discharge other 
Federal duties and powers relating to the national sales 
tax (including those required by sections 402, 403, and 
405). The Office of Revenue Allocation shall be within the 
Sales Tax Bureau.’’. 
(b) 
ASSISTANT
GENERAL
COUNSELS.—Section 
7801(b)(2) is amended to read as follows: 
‘‘(2) ASSISTANT
GENERAL
COUNSELS.—The 
Secretary of the Treasury may appoint, without re-
gard to the provisions of the civil service laws, and 
fix the duties of not more than 5 assistant general 
counsels.’’. 
SEC. 303. SALES TAX INCLUSIVE SOCIAL SECURITY BENE-
FITS INDEXATION. 
Subparagraph (D) of section 215(i)(1) of the Social 
Security Act (42 U.S.C. 415(i)(1)) (relating to cost-of-liv-
ing increases in Social Security benefits) is amended to 
read as follows: 
‘‘(D)(i) the term ‘CPI increase percentage’, 
with respect to a base quarter or cost-of-living quar-
ter in any calendar year, means the percentage 
(rounded to the nearest one-tenth of 1 percent) by 
which the Consumer Price Index for that quarter (as 
prepared by the Department of Labor) exceeds such
131
index for the most recent prior calendar quarter 
which was a base quarter under subparagraph 
(A)(ii) or, if later, the most recent cost-of-living 
computation quarter under subparagraph (B); 
‘‘(ii) if the Consumer Price Index (as so pre-
pared) does not include the national sales tax paid, 
then the term ‘CPI increase percentage’, with re-
spect to a base quarter or cost-of-living quarter in 
any calendar year, means the percentage (rounded 
to the nearest one-tenth of 1 percent) by which the 
product of—
‘‘(I) the Consumer Price Index for that 
quarter (as so prepared), and 
‘‘(II) the national sales tax factor, 
exceeds such index for the most recent prior calendar 
quarter which was a base quarter under subparagraph 
(A)(ii) or, if later, the most recent cost of living computa-
tion quarter under subparagraph (B); and 
‘‘(iii) the national sales tax factor is equal to 1 
plus the quotient that is—
‘‘(I) the sales tax rate imposed by section 
101 of the Internal Revenue Code of 2003, di-
vided by
132
‘‘(II) the quantity that is 1 minus such 
sales tax rate.’’.
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