I 
113TH CONGRESS 
2D SESSION 
H. R. 5636 
To amend the Internal Revenue Code of 1986 to cut and reduce excess 
and duplicative tax assessments and paperwork for entrepreneurs. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 18, 2014 
Mr. PETERS of California (for himself, Mrs. NAPOLITANO, Mr. VARGAS, Mr. 
MURPHY of Florida, and Mr. DELANEY) 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 cut and 
reduce excess and duplicative tax assessments and paper-
work for entrepreneurs. 
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 ‘‘Cut REDTAPE Act’’. 
SEC. 2. EXEMPTION OF NEW SMALL BUSINESSES FROM ES-
TIMATED INCOME TAX PAYMENTS. 
(a) INDIVIDUALS.—Section 6654 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
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(n) as subsection (o) and by inserting after subsection (m) 
the following new subsection: 
‘‘(n) SPECIAL
RULE
FOR
NEW
SMALL
BUSI-
NESSES.— 
‘‘(1) IN GENERAL.—No addition to tax shall be 
imposed under subsection (a) with respect to income 
from a new small business. 
‘‘(2) INCOME FROM A NEW SMALL BUSINESS.— 
For purposes of paragraph (1), income from a new 
small business means, with respect to any individual, 
income from a trade or business if the gross receipts 
of such trade or business for the calendar year end-
ing with or within the taxable year of the individual 
do not exceed $1,000,000. 
‘‘(3) LIMITED
APPLICATION.—Paragraph (1) 
shall not apply to income from a new small business 
for any taxable year beginning after 2 years after 
the date on which the new small business is formed. 
‘‘(4) CONTROLLED GROUPS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, all persons treated as a single em-
ployer under subsection (a) or (b) of section 52 
or subsection (m) or (o) of section 414 shall be 
treated as a single trade or business. 
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‘‘(B) INCLUSION
OF
FOREIGN
CORPORA-
TIONS.—For purposes of subparagraph (A), in 
applying subsections (a) and (b) of section 52 
to this section, section 1563 shall be applied 
without regard to subsection (b)(2)(C) there-
of.’’. 
(b) CORPORATIONS.—Section 6655 of the Internal 
Revenue Code of 1986 is amended by redesignating sub-
section (j) as subsection (k) and by inserting after sub-
section (i) the following new subsection: 
‘‘(j) SPECIAL RULE FOR NEW SMALL BUSINESSES.— 
‘‘(1) IN GENERAL.—No addition to tax shall be 
imposed under subsection (a) with respect to income 
from a new small business. 
‘‘(2) INCOME FROM A NEW SMALL BUSINESS.— 
For purposes of paragraph (1), income from a new 
small business means income from a trade or busi-
ness if the gross receipts of such trade or business 
for the taxable year do not exceed $1,000,000. 
‘‘(3) LIMITED
APPLICATION.—Paragraph (1) 
shall not apply to income from a new small business 
for any taxable year beginning after 2 years after 
the date on which the new small business is incor-
porated. 
‘‘(4) CONTROLLED GROUPS.— 
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‘‘(A) IN GENERAL.—For purposes of this 
subsection, all persons treated as a single em-
ployer under subsection (a) or (b) of section 52 
or subsection (m) or (o) of section 414 shall be 
treated as a single trade or business. 
‘‘(B) INCLUSION
OF
FOREIGN
CORPORA-
TIONS.—For purposes of subparagraph (A), in 
applying subsections (a) and (b) of section 52 
to this section, section 1563 shall be applied 
without regard to subsection (b)(2)(C) there-
of.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
Æ 
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