In the Senate of the United States,
March 27, 2003.
Resolved, That the bill from the House of Representa-
tives (H.R. 1307) entitled ‘‘An Act to amend the Internal
Revenue Code of 1986 to provide a special rule for members
of the uniformed services in determining the exclusion of gain
from the sale of a principal residence and to restore the tax
exempt status of death gratuity payments to members of the
uniformed services, and for other purposes.’’, do pass with
the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Armed Forces Tax Fairness Act of 2003’’.
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(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; etc.
TITLE I—IMPROVING TAX EQUITY FOR MILITARY PERSONNEL
Sec. 101. Exclusion of gain from sale of a principal residence by a member of
the uniformed services or the Foreign Service.
Sec. 102. Exclusion from gross income of certain death gratuity payments.
Sec. 103. Exclusion for amounts received under Department of Defense Home-
owners Assistance Program.
Sec. 104. Expansion of combat zone filing rules to contingency operations.
Sec. 105. Modification of membership requirement for exemption from tax for cer-
tain veterans’ organizations.
Sec. 106. Clarification of treatment of certain dependent care assistance pro-
grams.
Sec. 107. Clarification relating to exception from additional tax on certain dis-
tributions from qualified tuition programs, etc. on account of at-
tendance at military academy.
Sec. 108. Suspension of tax-exempt status of terrorist organizations.
Sec. 109. Above-the-line deduction for overnight travel expenses of National Guard
and Reserve members.
Sec. 110. Tax relief and assistance for families of Space Shuttle Columbia heroes.
TITLE II—OTHER PROVISIONS
Sec. 201. Extension of IRS user fees.
Sec. 202. Partial payment of tax liability in installment agreements.
Sec. 203. Revision of tax rules on expatriation.
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‘‘(B) MAXIMUM PERIOD OF SUSPENSION.—
The 5-year period described in subsection (a)
shall not be extended more than 10 years by rea-
son of subparagraph (A).
‘‘(C) 
QUALIFIED
OFFICIAL
EXTENDED
DUTY.—For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘qualified
official extended duty’ means any extended
duty while serving at a duty station which
is at least 50 miles from such property or
while residing under Government orders in
Government quarters.
‘‘(ii) 
UNIFORMED
SERVICES.—The
term ‘uniformed services’ has the meaning
given such term by section 101(a)(5) of title
10, United States Code, as in effect on the
date of the enactment of this paragraph.
‘‘(iii) FOREIGN
SERVICE
OF
THE
UNITED STATES.—The term ‘member of the
Foreign Service of the United States’ has
the meaning given the term ‘member of the
Service’ by paragraph (1), (2), (3), (4), or
(5) of section 103 of the Foreign Service Act
of 1980, as in effect on the date of the enact-
ment of this paragraph.
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‘‘(iv) EXTENDED DUTY.—The term ‘ex-
tended duty’ means any period of active
duty pursuant to a call or order to such
duty for a period in excess of 90 days or for
an indefinite period.
‘‘(D) SPECIAL RULES RELATING TO ELEC-
TION.—
‘‘(i) ELECTION
LIMITED
TO
PROP-
ERTY AT A TIME.—An election under sub-
paragraph (A) with respect to any property
may not be made if such an election is in
effect with respect to any other property.
‘‘(ii) REVOCATION OF ELECTION.—An
election under subparagraph (A) may be re-
voked at any time.’’.
(b) EFFECTIVE DATE; SPECIAL RULE.—
(1) EFFECTIVE DATE.—The amendments made
by this section shall take effect as if included in the
amendments made by section 312 of the Taxpayer Re-
lief Act of 1997.
(2) WAIVER OF LIMITATIONS.—If refund or cred-
it of any overpayment of tax resulting from the
amendments made by this section is prevented at any
time before the close of the 1-year period beginning on
the date of the enactment of this Act by the operation
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of any law or rule of law (including res judicata),
such refund or credit may nevertheless be made or al-
lowed if claim therefor is filed before the close of such
period.
SEC. 102. EXCLUSION FROM GROSS INCOME OF CERTAIN
DEATH GRATUITY PAYMENTS.
(a) IN GENERAL.—Subsection (b)(3) of section 134 (re-
lating to certain military benefits) is amended by adding
at the end the following new subparagraph:
‘‘(C) EXCEPTION FOR DEATH GRATUITY AD-
JUSTMENTS MADE BY LAW.—Subparagraph (A)
shall not apply to any adjustment to the amount
of death gratuity payable under chapter 75 of
title 10, United States Code, which is pursuant
to a provision of law enacted after September 9,
1986.’’.
(b) CONFORMING AMENDMENT.—Subparagraph (A) of
section 134(b)(3) is amended by striking ‘‘subparagraph
(B)’’ and inserting ‘‘subparagraphs (B) and (C)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to deaths occurring after
September 10, 2001.
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SEC. 103. EXCLUSION FOR AMOUNTS RECEIVED UNDER DE-
PARTMENT OF DEFENSE HOMEOWNERS AS-
SISTANCE PROGRAM.
(a) IN GENERAL.—Section 132(a) (relating to the ex-
clusion from gross income of certain fringe benefits) is
amended by striking ‘‘or’’ at the end of paragraph (6), by
striking the period at the end of paragraph (7) and insert-
ing ‘‘, or’’, and by adding at the end the following new
paragraph:
‘‘(8) qualified military base realignment and clo-
sure fringe.’’.
(b) QUALIFIED MILITARY BASE REALIGNMENT AND
CLOSURE FRINGE.—Section 132 is amended by redesig-
nating subsection (n) as subsection (o) and by inserting
after subsection (m) the following new subsection:
‘‘(n) QUALIFIED MILITARY BASE REALIGNMENT AND
CLOSURE FRINGE.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified military
base realignment and closure fringe’ means 1 or more
payments under the authority of section 1013 of the
Demonstration Cities and Metropolitan Development
Act of 1966 (42 U.S.C. 3374) (as in effect on the date
of the enactment of this subsection) to offset the ad-
verse effects on housing values as a result of a mili-
tary base realignment or closure.
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‘‘(2) LIMITATION.—With respect to any property,
such term shall not include any payment referred to
in paragraph (1) to the extent that the sum of all of
such payments related to such property exceeds the
maximum amount described in clause (1) of sub-
section (c) of such section (as in effect on such date).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to payments made after the date of the
enactment of this Act.
SEC. 104. EXPANSION OF COMBAT ZONE FILING RULES TO
CONTINGENCY OPERATIONS.
(a) IN GENERAL.—Section 7508(a) (relating to time
for performing certain acts postponed by reason of service
in combat zone) is amended—
(1) by inserting ‘‘, or when deployed outside the
United States away from the individual’s permanent
duty station while participating in an operation des-
ignated by the Secretary of Defense as a contingency
operation (as defined in section 101(a)(13) of title 10,
United States Code) or which became such a contin-
gency operation by operation of law’’ after ‘‘section
112’’,
(2) by inserting in the first sentence ‘‘or at any
time during the period of such contingency operation’’
after ‘‘for purposes of such section’’,
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(3) by inserting ‘‘or operation’’ after ‘‘such an
area’’, and
(4) by inserting ‘‘or operation’’ after ‘‘such
area’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 7508(d) is amended by inserting ‘‘or
contingency operation’’ after ‘‘area’’.
(2) The heading for section 7508 is amended by
inserting ‘‘OR CONTINGENCY OPERATION’’ after
‘‘COMBAT ZONE’’.
(3) The item relating to section 7508 in the table
of sections for chapter 77 is amended by inserting ‘‘or
contingency operation’’ after ‘‘combat zone’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to any period for performing an act
which has not expired before the date of the enactment of
this Act.
SEC. 105. MODIFICATION OF MEMBERSHIP REQUIREMENT
FOR EXEMPTION FROM TAX FOR CERTAIN
VETERANS’ ORGANIZATIONS.
(a) IN
GENERAL.—Subparagraph (B) of section
501(c)(19) (relating to list of exempt organizations) is
amended by striking ‘‘or widowers’’ and inserting ‘‘, wid-
owers, ancestors, or lineal descendants’’.
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(b) 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. CLARIFICATION OF THE TREATMENT OF CERTAIN
DEPENDENT CARE ASSISTANCE PROGRAMS.
(a) IN GENERAL.—Section 134(b) (defining qualified
military benefit) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) CLARIFICATION
OF
CERTAIN
BENEFITS.—
For purposes of paragraph (1), such term includes
any dependent care assistance program (as in effect
on the date of the enactment of this paragraph) for
any individual described in paragraph (1)(A).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 134(b)(3)(A), as amended by section
102, is amended by inserting ‘‘and paragraph (4)’’
after ‘‘subparagraphs (B) and (C)’’.
(2) Section 3121(a)(18) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
(3) Section 3306(b)(13) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
(4) Section 3401(a)(18) is amended by striking
‘‘or 129’’ and inserting ‘‘, 129, or 134(b)(4)’’.
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(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2002.
(d) NO INFERENCE.—No inference may be drawn from
the amendments made by this section with respect to the
tax treatment of any amounts under the program described
in section 134(b)(4) of the Internal Revenue Code of 1986
(as added by this section) for any taxable year beginning
before January 1, 2003.
SEC. 107. CLARIFICATION RELATING TO EXCEPTION FROM
ADDITIONAL TAX ON CERTAIN DISTRIBU-
TIONS FROM QUALIFIED TUITION PROGRAMS,
ETC. ON ACCOUNT OF ATTENDANCE AT MILI-
TARY ACADEMY.
(a) IN
GENERAL.—Subparagraph (B) of section
530(d)(4) (relating to exceptions from additional tax for
distributions not used for educational purposes) is amended
by striking ‘‘or’’ at the end of clause (iii), by redesignating
clause (iv) as clause (v), and by inserting after clause (iii)
the following new clause:
‘‘(iv) made on account of the attend-
ance of the designated beneficiary at the
United 
States 
Military 
Academy, 
the
United States Naval Academy, the United
States Air Force Academy, the United
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States Coast Guard Academy, or the United
States Merchant Marine Academy, to the
extent that the amount of the payment or
distribution does not exceed the costs of ad-
vanced education (as defined by section
2005(e)(3) of title 10, United States Code,
as in effect on the date of the enactment of
this section) attributable to such attendance,
or’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2002.
SEC. 108. SUSPENSION OF TAX-EXEMPT STATUS OF TER-
RORIST ORGANIZATIONS.
(a) IN GENERAL.—Section 501 (relating to exemption
from tax on corporations, certain trusts, etc.) is amended
by redesignating subsection (p) as subsection (q) and by in-
serting after subsection (o) the following new subsection:
‘‘(p) SUSPENSION OF TAX-EXEMPT STATUS OF TER-
RORIST ORGANIZATIONS.—
‘‘(1) IN
GENERAL.—The exemption from tax
under subsection (a) with respect to any organization
described in paragraph (2), and the eligibility of any
organization described in paragraph (2) to apply for
recognition of exemption under subsection (a), shall
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HR 1307 EAS
be suspended during the period described in para-
graph (3).
‘‘(2) TERRORIST ORGANIZATIONS.—An organiza-
tion is described in this paragraph if such organiza-
tion 
is 
designated 
or 
otherwise 
individually
identified—
‘‘(A) under section 212(a)(3)(B)(vi)(II) or
219 of the Immigration and Nationality Act as
a terrorist organization or foreign terrorist orga-
nization,
‘‘(B) in or pursuant to an Executive order
which is related to terrorism and issued under
the authority of the International Emergency
Economic Powers Act or section 5 of the United
Nations Participation Act of 1945 for the pur-
pose of imposing on such organization an eco-
nomic or other sanction, or
‘‘(C) in or pursuant to an Executive order
issued under the authority of any Federal law
if—
‘‘(i) the organization is designated or
otherwise individually identified in or pur-
suant to such Executive order as supporting
or engaging in terrorist activity (as defined
in section 212(a)(3)(B) of the Immigration
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and Nationality Act) or supporting ter-
rorism (as defined in section 140(d)(2) of
the Foreign Relations Authorization Act,
Fiscal Years 1988 and 1989); and
‘‘(ii) such Executive order refers to this
subsection.
‘‘(3) PERIOD OF SUSPENSION.—With respect to
any organization described in paragraph (2), the pe-
riod of suspension—
‘‘(A) begins on the later of—
‘‘(i) the date of the first publication of
a designation or identification described in
paragraph (2) with respect to such organi-
zation, or
‘‘(ii) the date of the enactment of this
subsection, and
‘‘(B) ends on the first date that all designa-
tions and identifications described in paragraph
(2) with respect to such organization are re-
scinded pursuant to the law or Executive order
under which such designation or identification
was made.
‘‘(4) DENIAL
OF
DEDUCTION.—No deduction
shall be allowed under any provision of this title, in-
cluding sections 170, 545(b)(2), 556(b)(2), 642(c),
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2055, 2106(a)(2), and 2522, with respect to any con-
tribution to an organization described in paragraph
(2) during the period described in paragraph (3).
‘‘(5) DENIAL OF ADMINISTRATIVE OR JUDICIAL
CHALLENGE OF SUSPENSION OR DENIAL OF DEDUC-
TION.—Notwithstanding section 7428 or any other
provision of law, no organization or other person may
challenge a suspension under paragraph (1), a des-
ignation or identification described in paragraph (2),
the period of suspension described in paragraph (3),
or a denial of a deduction under paragraph (4) in
any administrative or judicial proceeding relating to
the Federal tax liability of such organization or other
person.
‘‘(6) ERRONEOUS DESIGNATION.—
‘‘(A) IN GENERAL.—If—
‘‘(i) the tax exemption of any organi-
zation described in paragraph (2) is sus-
pended under paragraph (1),
‘‘(ii) each designation and identifica-
tion described in paragraph (2) which has
been made with respect to such organization
is determined to be erroneous pursuant to
the law or Executive order under which
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such designation or identification was
made, and
‘‘(iii) the erroneous designations and
identifications result in an overpayment of
income tax for any taxable year by such or-
ganization,
credit or refund (with interest) with respect to
such overpayment shall be made.
‘‘(B) WAIVER OF LIMITATIONS.—If the cred-
it or refund of any overpayment of tax described
in subparagraph (A)(iii) is prevented at any
time by the operation of any law or rule of law
(including res judicata), such credit or refund
may nevertheless be allowed or made if the claim
therefor is filed before the close of the 1-year pe-
riod beginning on the date of the last determina-
tion described in subparagraph (A)(ii).
‘‘(7) NOTICE OF SUSPENSIONS.—If the tax ex-
emption of any organization is suspended under this
subsection, the Internal Revenue Service shall update
the listings of tax-exempt organizations and shall
publish appropriate notice to taxpayers of such sus-
pension and of the fact that contributions to such or-
ganization are not deductible during the period of
such suspension.’’.
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(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to designations made before, on, or after
the date of the enactment of this Act.
SEC. 109. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT
TRAVEL EXPENSES OF NATIONAL GUARD AND
RESERVE MEMBERS.
(a) DEDUCTION ALLOWED.—Section 162 (relating to
certain trade or business expenses) is amended by redesig-
nating subsection (p) as subsection (q) and inserting after
subsection (o) the following new subsection:
‘‘(p) TREATMENT OF EXPENSES OF MEMBERS OF RE-
SERVE COMPONENT OF ARMED FORCES OF THE UNITED
STATES.—For purposes of subsection (a)(2), in the case of
an individual who performs services as a member of a re-
serve component of the Armed Forces of the United States
at any time during the taxable year, such individual shall
be deemed to be away from home in the pursuit of a trade
or business for any period during which such individual
is away from home in connection with such service.’’.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ELECTS TO ITEMIZE.—Section 62(a)(2) (relating to
certain trade and business deductions of employees) is
amended by adding at the end the following new subpara-
graph:
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‘‘(E) CERTAIN EXPENSES OF MEMBERS OF
RESERVE COMPONENTS OF THE ARMED FORCES
OF
THE
UNITED
STATES.—The deductions al-
lowed by section 162 which consist of expenses,
determined at a rate not in excess of the rates for
travel expenses (including per diem in lieu of
subsistence) authorized for employees of agencies
under subchapter I of chapter 57 of title 5,
United States Code, paid or incurred by the tax-
payer in connection with the performance of
services by such taxpayer as a member of a re-
serve component of the Armed Forces of the
United States for any period during which such
individual is more than 100 miles away from
home in connection with such services.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to amounts paid or incurred in taxable
years beginning after December 31, 2002.
SEC. 110. TAX RELIEF AND ASSISTANCE FOR FAMILIES OF
SPACE SHUTTLE COLUMBIA HEROES.
(a) INCOME TAX RELIEF.—
(1) IN GENERAL.—Subsection (d) of section 692
(relating to income taxes of members of Armed Forces
and victims of certain terrorist attacks on death) is
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amended by adding at the end the following new
paragraph:
‘‘(5) RELIEF WITH RESPECT TO ASTRONAUTS.—
The provisions of this subsection shall apply to any
astronaut whose death occurs in the line of duty, ex-
cept that paragraph (3)(B) shall be applied by using
the date of the death of the astronaut rather than Sep-
tember 11, 2001.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 5(b)(1) is amended by inserting
‘‘, astronauts,’’ after ‘‘Forces’’.
(B) Section 6013(f)(2)(B) is amended by
inserting ‘‘, astronauts,’’ after ‘‘Forces’’.
(3) CLERICAL AMENDMENTS.—
(A) The heading of section 692 is amended
by 
inserting 
‘‘, 
ASTRONAUTS,’’ 
after
‘‘FORCES’’.
(B) The item relating to section 692 in the
table of sections for part II of subchapter J of
chapter 1 is amended by inserting ‘‘, astro-
nauts,’’ after ‘‘Forces’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply with respect to any as-
tronaut whose death occurs after December 31, 2002.
(b) DEATH BENEFIT RELIEF.—
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(1) IN GENERAL.—Subsection (i) of section 101
(relating to certain death benefits) is amended by
adding at the end the following new paragraph:
‘‘(4) RELIEF WITH RESPECT TO ASTRONAUTS.—
The provisions of this subsection shall apply to any
astronaut whose death occurs in the line of duty.’’.
(2) CLERICAL
AMENDMENT.—The heading for
subsection (i) of section 101 is amended by inserting
‘‘OR ASTRONAUTS’’ after ‘‘VICTIMS’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to amounts paid after
December 31, 2002, with respect to deaths occurring
after such date.
(c) ESTATE TAX RELIEF.—
(1) IN
GENERAL.—Section 2201(b) (defining
qualified decedent) is amended by striking ‘‘and’’ at
the end of paragraph (1)(B), by striking the period
at the end of paragraph (2) and inserting ‘‘, and’’,
and by adding at the end the following new para-
graph:
‘‘(3) any astronaut whose death occurs in the
line of duty.’’.
(2) CLERICAL AMENDMENTS.—
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(A) The heading of section 2201 is amended
by inserting ‘‘, DEATHS OF ASTRONAUTS,’’
after ‘‘FORCES’’.
(B) The item relating to section 2201 in the
table of sections for subchapter C of chapter 11
is amended by inserting ‘‘, deaths of astronauts,’’
after ‘‘Forces’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to estates of decedents
dying after December 31, 2002.
TITLE II—OTHER PROVISIONS
SEC. 201. EXTENSION OF INTERNAL REVENUE SERVICE
USER FEES.
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 7528. INTERNAL REVENUE SERVICE USER FEES.
‘‘(a) GENERAL RULE.—The Secretary shall establish
a program requiring the payment of user fees for—
‘‘(1) requests to the Internal Revenue Service for
ruling letters, opinion letters, and determination let-
ters, and
‘‘(2) other similar requests.
‘‘(b) PROGRAM CRITERIA.—
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‘‘(1) IN GENERAL.—The fees charged under the
program required by subsection (a)—
‘‘(A) shall vary according to categories (or
subcategories) established by the Secretary,
‘‘(B) shall be determined after taking into
account the average time for (and difficulty of)
complying with requests in each category (and
subcategory), and
‘‘(C) shall be payable in advance.
‘‘(2) EXEMPTIONS, ETC.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide for such exemptions (and reduced fees)
under such program as the Secretary determines
to be appropriate.
‘‘(B) EXEMPTION FOR CERTAIN REQUESTS
REGARDING
PENSION
PLANS.—The Secretary
shall not require payment of user fees under such
program for requests for determination letters
with respect to the qualified status of a pension
benefit plan maintained solely by 1 or more eli-
gible employers or any trust which is part of the
plan. The preceding sentence shall not apply to
any request—
‘‘(i) made after the later of—
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‘‘(I) the fifth plan year the pen-
sion benefit plan is in existence, or
‘‘(II) the end of any remedial
amendment period with respect to the
plan beginning within the first 5 plan
years, or
‘‘(ii) made by the sponsor of any proto-
type or similar plan which the sponsor in-
tends to market to participating employers.
‘‘(C) DEFINITIONS AND SPECIAL RULES.—
For purposes of subparagraph (B)—
‘‘(i) PENSION
BENEFIT
PLAN.—The
term ‘pension benefit plan’ means a pen-
sion, profit-sharing, stock bonus, annuity,
or employee stock ownership plan.
‘‘(ii) ELIGIBLE EMPLOYER.—The term
‘eligible employer’ means an eligible em-
ployer 
(as 
defined 
in 
section
408(p)(2)(C)(i)(I)) which has at least 1 em-
ployee who is not a highly compensated em-
ployee (as defined in section 414(q)) and is
participating in the plan. The determina-
tion of whether an employer is an eligible
employer under subparagraph (B) shall be
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made as of the date of the request described
in such subparagraph.
‘‘(iii) DETERMINATION
OF
AVERAGE
FEES CHARGED.—For purposes of any de-
termination of average fees charged, any re-
quest to which subparagraph (B) applies
shall not be taken into account.
‘‘(3) AVERAGE FEE REQUIREMENT.—The average
fee charged under the program required by subsection
(a) shall not be less than the amount determined
under the following table:
Average
‘‘Category
fee
Employee plan ruling and opinion ..............................................
$250
Exempt organization ruling .........................................................
$350
Employee plan determination ......................................................
$300
Exempt organization determination ............................................
$275
Chief counsel ruling .......................................................................
$200.
‘‘(c) TERMINATION.—No fee shall be imposed under
this section with respect to requests made after September
30, 2013.’’.
(b) CONFORMING AMENDMENTS.—
(1) The table of sections for chapter 77 is amend-
ed by adding at the end the following new item:
‘‘Sec. 7528. Internal Revenue Service user fees.’’.
(2) Section 10511 of the Revenue Act of 1987 is
repealed.
(3) Section 620 of the Economic Growth and
Tax Relief Reconciliation Act of 2001 is repealed.
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(c) LIMITATIONS.—Notwithstanding any other provi-
sion of law, any fees collected pursuant to section 7528 of
the Internal Revenue Code of 1986, as added by subsection
(a), shall not be expended by the Internal Revenue Service
unless provided by an appropriations Act.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to requests made after the date of the
enactment of this Act.
SEC. 202. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALL-
MENT AGREEMENTS.
(a) IN GENERAL.—
(1) Section 6159(a) (relating to authorization of
agreements) is amended—
(A) by striking ‘‘satisfy liability for pay-
ment of’’ and inserting ‘‘make payment on’’, and
(B) by inserting ‘‘full or partial’’ after ‘‘fa-
cilitate’’.
(2) Section 6159(c) (relating to Secretary re-
quired to enter into installment agreements in certain
cases) is amended in the matter preceding paragraph
(1) by inserting ‘‘full’’ before ‘‘payment’’.
(b) REQUIREMENT TO REVIEW PARTIAL PAYMENT
AGREEMENTS
EVERY
TWO
YEARS.—Section 6159 is
amended by redesignating subsections (d) and (e) as sub-
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sections (e) and (f), respectively, and inserting after sub-
section (c) the following new subsection:
‘‘(d) SECRETARY REQUIRED TO REVIEW INSTALL-
MENT AGREEMENTS FOR PARTIAL COLLECTION EVERY TWO
YEARS.—In the case of an agreement entered into by the
Secretary under subsection (a) for partial collection of a
tax liability, the Secretary shall review the agreement at
least once every 2 years.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to agreements entered into on or after
the date of the enactment of this Act.
SEC. 203. REVISION OF TAX RULES ON EXPATRIATION.
(a) IN GENERAL.—Subpart A of part II of subchapter
N of chapter 1 is amended by inserting after section 877
the following new section:
‘‘SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.
‘‘(a) 
GENERAL
RULES.—For 
purposes 
of 
this
subtitle—
‘‘(1) MARK TO MARKET.—Except as provided in
subsections (d) and (f), all property of a covered expa-
triate to whom this section applies shall be treated as
sold on the day before the expatriation date for its
fair market value.
‘‘(2) RECOGNITION OF GAIN OR LOSS.—In the
case of any sale under paragraph (1)—
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‘‘(A) notwithstanding any other provision of
this title, any gain arising from such sale shall
be taken into account for the taxable year of the
sale, and
‘‘(B) any loss arising from such sale shall
be taken into account for the taxable year of the
sale to the extent otherwise provided by this title,
except that section 1091 shall not apply to any
such loss.
Proper adjustment shall be made in the amount of
any gain or loss subsequently realized for gain or loss
taken into account under the preceding sentence.
‘‘(3) EXCLUSION FOR CERTAIN GAIN.—
‘‘(A) IN GENERAL.—The amount which, but
for this paragraph, would be includible in the
gross income of any individual by reason of this
section shall be reduced (but not below zero) by
$600,000. For purposes of this paragraph, allo-
cable expatriation gain taken into account under
subsection (f)(2) shall be treated in the same
manner as an amount required to be includible
in gross income.
‘‘(B) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of an
expatriation date occurring in any calendar
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year after 2003, the $600,000 amount under
subparagraph (A) shall be increased by an
amount equal to—
‘‘(I) such dollar amount, multi-
plied by
‘‘(II) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year, determined by sub-
stituting ‘calendar year 2002’ for ‘cal-
endar year 1992’ in subparagraph (B)
thereof.
‘‘(ii) 
ROUNDING
RULES.—If 
any
amount after adjustment under clause (i) is
not a multiple of $1,000, such amount shall
be rounded to the next lower multiple of
$1,000.
‘‘(4) ELECTION TO CONTINUE TO BE TAXED AS
UNITED STATES CITIZEN.—
‘‘(A) IN GENERAL.—If a covered expatriate
elects the application of this paragraph—
‘‘(i) this section (other than this para-
graph and subsection (i)) shall not apply to
the expatriate, but
‘‘(ii) in the case of property to which
this section would apply but for such elec-
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tion, the expatriate shall be subject to tax
under this title in the same manner as if
the individual were a United States citizen.
‘‘(B) REQUIREMENTS.—Subparagraph (A)
shall not apply to an individual unless the
individual—
‘‘(i) provides security for payment of
tax in such form and manner, and in such
amount, as the Secretary may require,
‘‘(ii) consents to the waiver of any
right of the individual under any treaty of
the United States which would preclude as-
sessment or collection of any tax which may
be imposed by reason of this paragraph,
and
‘‘(iii) complies with such other require-
ments as the Secretary may prescribe.
‘‘(C) ELECTION.—An election under sub-
paragraph (A) shall apply to all property to
which this section would apply but for the elec-
tion and, once made, shall be irrevocable. Such
election shall also apply to property the basis of
which is determined in whole or in part by ref-
erence to the property with respect to which the
election was made.
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‘‘(b) ELECTION TO DEFER TAX.—
‘‘(1) IN GENERAL.—If the taxpayer elects the ap-
plication of this subsection with respect to any prop-
erty treated as sold by reason of subsection (a), the
payment of the additional tax attributable to such
property shall be postponed until the due date of the
return for the taxable year in which such property is
disposed of (or, in the case of property disposed of in
a transaction in which gain is not recognized in
whole or in part, until such other date as the Sec-
retary may prescribe).
‘‘(2) DETERMINATION OF TAX WITH RESPECT TO
PROPERTY.—For purposes of paragraph (1), the addi-
tional tax attributable to any property is an amount
which bears the same ratio to the additional tax im-
posed by this chapter for the taxable year solely by
reason of subsection (a) as the gain taken into ac-
count under subsection (a) with respect to such prop-
erty bears to the total gain taken into account under
subsection (a) with respect to all property to which
subsection (a) applies.
‘‘(3) TERMINATION OF POSTPONEMENT.—No tax
may be postponed under this subsection later than the
due date for the return of tax imposed by this chapter
for the taxable year which includes the date of death
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of the expatriate (or, if earlier, the time that the secu-
rity provided with respect to the property fails to
meet the requirements of paragraph (4), unless the
taxpayer corrects such failure within the time speci-
fied by the Secretary).
‘‘(4) SECURITY.—
‘‘(A) IN
GENERAL.—No election may be
made under paragraph (1) with respect to any
property unless adequate security is provided to
the Secretary with respect to such property.
‘‘(B) ADEQUATE SECURITY.—For purposes
of subparagraph (A), security with respect to
any property shall be treated as adequate secu-
rity if—
‘‘(i) it is a bond in an amount equal
to the deferred tax amount under paragraph
(2) for the property, or
‘‘(ii) the taxpayer otherwise establishes
to the satisfaction of the Secretary that the
security is adequate.
‘‘(5) WAIVER OF CERTAIN RIGHTS.—No election
may be made under paragraph (1) unless the tax-
payer consents to the waiver of any right under any
treaty of the United States which would preclude as-
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sessment or collection of any tax imposed by reason
of this section.
‘‘(6) ELECTIONS.—An election under paragraph
(1) shall only apply to property described in the elec-
tion and, once made, is irrevocable. An election may
be made under paragraph (1) with respect to an in-
terest in a trust with respect to which gain is re-
quired to be recognized under subsection (f)(1).
‘‘(7) INTEREST.—For purposes of section 6601—
‘‘(A) the last date for the payment of tax
shall be determined without regard to the election
under this subsection, and
‘‘(B) section 6621(a)(2) shall be applied by
substituting ‘5 percentage points’ for ‘3 percent-
age points’ in subparagraph (B) thereof.
‘‘(c) COVERED EXPATRIATE.—For purposes of this
section—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the term ‘covered expatriate’ means an ex-
patriate.
‘‘(2) EXCEPTIONS.—An individual shall not be
treated as a covered expatriate if—
‘‘(A) the individual—
‘‘(i) became at birth a citizen of the
United States and a citizen of another
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country and, as of the expatriation date,
continues to be a citizen of, and is taxed as
a resident of, such other country, and
‘‘(ii) has not been a resident of the
United States (as defined in section
7701(b)(1)(A)(ii)) during the 5 taxable
years ending with the taxable year during
which the expatriation date occurs, or
‘‘(B)(i) the individual’s relinquishment of
United States citizenship occurs before such indi-
vidual attains age 181⁄2, and
‘‘(ii) the individual has been a resident of
the United States (as so defined) for not more
than 5 taxable years before the date of relin-
quishment.
‘‘(d) EXEMPT PROPERTY; SPECIAL RULES FOR PEN-
SION PLANS.—
‘‘(1) EXEMPT PROPERTY.—This section shall not
apply to the following:
‘‘(A) UNITED STATES REAL PROPERTY IN-
TERESTS.—Any United States real property in-
terest (as defined in section 897(c)(1)), other
than stock of a United States real property hold-
ing corporation which does not, on the day before
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the expatriation date, meet the requirements of
section 897(c)(2).
‘‘(B) SPECIFIED PROPERTY.—Any property
or interest in property not described in subpara-
graph (A) which the Secretary specifies in regu-
lations.
‘‘(2) SPECIAL RULES FOR CERTAIN RETIREMENT
PLANS.—
‘‘(A) IN GENERAL.—If a covered expatriate
holds on the day before the expatriation date any
interest in a retirement plan to which this para-
graph applies—
‘‘(i) such interest shall not be treated
as sold for purposes of subsection (a)(1), but
‘‘(ii) an amount equal to the present
value of the expatriate’s nonforfeitable ac-
crued benefit shall be treated as having been
received by such individual on such date as
a distribution under the plan.
‘‘(B) TREATMENT
OF
SUBSEQUENT
DIS-
TRIBUTIONS.—In the case of any distribution on
or after the expatriation date to or on behalf of
the covered expatriate from a plan from which
the expatriate was treated as receiving a dis-
tribution under subparagraph (A), the amount
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otherwise includible in gross income by reason of
the subsequent distribution shall be reduced by
the excess of the amount includible in gross in-
come under subparagraph (A) over any portion
of such amount to which this subparagraph pre-
viously applied.
‘‘(C) TREATMENT
OF
SUBSEQUENT
DIS-
TRIBUTIONS BY PLAN.—For purposes of this title,
a retirement plan to which this paragraph ap-
plies, and any person acting on the plan’s behalf,
shall treat any subsequent distribution described
in subparagraph (B) in the same manner as
such distribution would be treated without re-
gard to this paragraph.
‘‘(D) APPLICABLE PLANS.—This paragraph
shall apply to—
‘‘(i) any qualified retirement plan (as
defined in section 4974(c)),
‘‘(ii) an eligible deferred compensation
plan (as defined in section 457(b)) of an el-
igible 
employer 
described 
in 
section
457(e)(1)(A), and
‘‘(iii) to the extent provided in regula-
tions, any foreign pension plan or similar
retirement arrangements or programs.
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‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) 
EXPATRIATE.—The 
term 
‘expatriate’
means—
‘‘(A) any United States citizen who relin-
quishes citizenship, and
‘‘(B) any long-term resident of the United
States who—
‘‘(i) ceases to be a lawful permanent
resident of the United States (within the
meaning of section 7701(b)(6)), or
‘‘(ii) commences to be treated as a resi-
dent of a foreign country under the provi-
sions of a tax treaty between the United
States and the foreign country and who
does not waive the benefits of such treaty
applicable to residents of the foreign coun-
try.
‘‘(2) EXPATRIATION DATE.—The term ‘expatria-
tion date’ means—
‘‘(A) the date an individual relinquishes
United States citizenship, or
‘‘(B) in the case of a long-term resident of
the United States, the date of the event described
in clause (i) or (ii) of paragraph (1)(B).
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‘‘(3) RELINQUISHMENT OF CITIZENSHIP.—A cit-
izen shall be treated as relinquishing United States
citizenship on the earliest of—
‘‘(A) the date the individual renounces such
individual’s United States nationality before a
diplomatic or consular officer of the United
States pursuant to paragraph (5) of section
349(a) of the Immigration and Nationality Act
(8 U.S.C. 1481(a)(5)),
‘‘(B) the date the individual furnishes to the
United States Department of State a signed
statement of voluntary relinquishment of United
States nationality confirming the performance of
an act of expatriation specified in paragraph
(1), (2), (3), or (4) of section 349(a) of the Im-
migration and Nationality Act (8 U.S.C.
1481(a)(1)–(4)),
‘‘(C) the date the United States Department
of State issues to the individual a certificate of
loss of nationality, or
‘‘(D) the date a court of the United States
cancels a naturalized citizen’s certificate of natu-
ralization.
Subparagraph (A) or (B) shall not apply to any in-
dividual unless the renunciation or voluntary relin-
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‘‘(iii) the individual shall be treated as hav-
ing recontributed the assets to the separate trust.
Subsection (a)(2) shall apply to any income, gain, or
loss of the individual arising from a distribution de-
scribed in subparagraph (C)(ii). In determining the
amount of such distribution, proper adjustments shall
be made for liabilities of the trust allocable to an in-
dividual’s share in the trust.
‘‘(2) SPECIAL RULES FOR INTERESTS IN QUALI-
FIED TRUSTS.—
‘‘(A) IN GENERAL.—If the trust interest de-
scribed in paragraph (1) is an interest in a
qualified trust—
‘‘(i) paragraph (1) and subsection (a)
shall not apply, and
‘‘(ii) in addition to any other tax im-
posed by this title, there is hereby imposed
on each distribution with respect to such in-
terest a tax in the amount determined
under subparagraph (B).
‘‘(B) AMOUNT OF TAX.—The amount of tax
under subparagraph (A)(ii) shall be equal to the
lesser of—
‘‘(i) the highest rate of tax imposed by
section 1(e) for the taxable year which in-
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cludes the day before the expatriation date,
multiplied by the amount of the distribu-
tion, or
‘‘(ii) the balance in the deferred tax ac-
count immediately before the distribution
determined without regard to any increases
under subparagraph (C)(ii) after the 30th
day preceding the distribution.
‘‘(C) DEFERRED TAX ACCOUNT.—For pur-
poses of subparagraph (B)(ii)—
‘‘(i) OPENING BALANCE.—The opening
balance in a deferred tax account with re-
spect to any trust interest is an amount
equal to the tax which would have been im-
posed on the allocable expatriation gain
with respect to the trust interest if such
gain had been included in gross income
under subsection (a).
‘‘(ii) INCREASE
FOR
INTEREST.—The
balance in the deferred tax account shall be
increased by the amount of interest deter-
mined (on the balance in the account at the
time the interest accrues), for periods after
the 90th day after the expatriation date, by
using the rates and method applicable
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under section 6621 for underpayments of
tax for such periods, except that section
6621(a)(2) shall be applied by substituting
‘5 percentage points’ for ‘3 percentage
points’ in subparagraph (B) thereof.
‘‘(iii) DECREASE
FOR
TAXES
PRE-
VIOUSLY PAID.—The balance in the tax de-
ferred account shall be reduced—
‘‘(I) by the amount of taxes im-
posed by subparagraph (A) on any dis-
tribution to the person holding the
trust interest, and
‘‘(II) in the case of a person hold-
ing a nonvested interest, to the extent
provided in regulations, by the amount
of taxes imposed by subparagraph (A)
on distributions from the trust with re-
spect to nonvested interests not held by
such person.
‘‘(D) ALLOCABLE EXPATRIATION GAIN.—For
purposes of this paragraph, the allocable expa-
triation gain with respect to any beneficiary’s
interest in a trust is the amount of gain which
would be allocable to such beneficiary’s vested
and nonvested interests in the trust if the bene-
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ficiary held directly all assets allocable to such
interests.
‘‘(E) TAX DEDUCTED AND WITHHELD.—
‘‘(i) IN GENERAL.—The tax imposed by
subparagraph (A)(ii) shall be deducted and
withheld by the trustees from the distribu-
tion to which it relates.
‘‘(ii) EXCEPTION WHERE FAILURE TO
WAIVE TREATY RIGHTS.—If an amount may
not be deducted and withheld under clause
(i) by reason of the distributee failing to
waive any treaty right with respect to such
distribution—
‘‘(I) the tax imposed by subpara-
graph (A)(ii) shall be imposed on the
trust and each trustee shall be person-
ally liable for the amount of such tax,
and
‘‘(II) any other beneficiary of the
trust shall be entitled to recover from
the distributee the amount of such tax
imposed on the other beneficiary.
‘‘(F) DISPOSITION.—If a trust ceases to be
a qualified trust at any time, a covered expa-
triate disposes of an interest in a qualified trust,
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or a covered expatriate holding an interest in a
qualified trust dies, then, in lieu of the tax im-
posed by subparagraph (A)(ii), there is hereby
imposed a tax equal to the lesser of—
‘‘(i) the tax determined under para-
graph (1) as if the day before the expatria-
tion date were the date of such cessation,
disposition, or death, whichever is applica-
ble, or
‘‘(ii) the balance in the tax deferred ac-
count immediately before such date.
Such tax shall be imposed on the trust and each
trustee shall be personally liable for the amount
of such tax and any other beneficiary of the trust
shall be entitled to recover from the covered expa-
triate or the estate the amount of such tax im-
posed on the other beneficiary.
‘‘(G) DEFINITIONS AND SPECIAL RULES.—
For purposes of this paragraph—
‘‘(i) QUALIFIED
TRUST.—The term
‘qualified trust’ means a trust which is de-
scribed in section 7701(a)(30)(E).
‘‘(ii) VESTED
INTEREST.—The term
‘vested interest’ means any interest which,
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as of the day before the expatriation date, is
vested in the beneficiary.
‘‘(iii) 
NONVESTED
INTEREST.—The
term ‘nonvested interest’ means, with re-
spect to any beneficiary, any interest in a
trust which is not a vested interest. Such
interest shall be determined by assuming the
maximum exercise of discretion in favor of
the beneficiary and the occurrence of all
contingencies in favor of the beneficiary.
‘‘(iv) ADJUSTMENTS.—The Secretary
may provide for such adjustments to the
bases of assets in a trust or a deferred tax
account, and the timing of such adjust-
ments, in order to ensure that gain is taxed
only once.
‘‘(v) COORDINATION WITH RETIREMENT
PLAN
RULES.—This subsection shall not
apply to an interest in a trust which is
part of a retirement plan to which sub-
section (d)(2) applies.
‘‘(3) DETERMINATION OF BENEFICIARIES’ INTER-
EST IN TRUST.—
‘‘(A) DETERMINATIONS UNDER PARAGRAPH
(1).—For purposes of paragraph (1), a bene-
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ficiary’s interest in a trust shall be based upon
all relevant facts and circumstances, including
the terms of the trust instrument and any letter
of wishes or similar document, historical pat-
terns of trust distributions, and the existence of
and functions performed by a trust protector or
any similar adviser.
‘‘(B) OTHER DETERMINATIONS.—For pur-
poses of this section—
‘‘(i) CONSTRUCTIVE OWNERSHIP.—If a
beneficiary of a trust is a corporation, part-
nership, trust, or estate, the shareholders,
partners, or beneficiaries shall be deemed to
be the trust beneficiaries for purposes of this
section.
‘‘(ii) TAXPAYER RETURN POSITION.—A
taxpayer shall clearly indicate on its in-
come tax return—
‘‘(I) the methodology used to de-
termine that taxpayer’s trust interest
under this section, and
‘‘(II) if the taxpayer knows (or
has reason to know) that any other
beneficiary of such trust is using a dif-
ferent methodology to determine such
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beneficiary’s trust interest under this
section.
‘‘(g) TERMINATION OF DEFERRALS, ETC.—In the case
of any covered expatriate, notwithstanding any other provi-
sion of this title—
‘‘(1) any period during which recognition of in-
come or gain is deferred shall terminate on the day
before the expatriation date, and
‘‘(2) any extension of time for payment of tax
shall cease to apply on the day before the expatriation
date and the unpaid portion of such tax shall be due
and payable at the time and in the manner pre-
scribed by the Secretary.
‘‘(h) IMPOSITION OF TENTATIVE TAX.—
‘‘(1) IN GENERAL.—If an individual is required
to include any amount in gross income under sub-
section (a) for any taxable year, there is hereby im-
posed, immediately before the expatriation date, a tax
in an amount equal to the amount of tax which
would be imposed if the taxable year were a short tax-
able year ending on the expatriation date.
‘‘(2) DUE DATE.—The due date for any tax im-
posed by paragraph (1) shall be the 90th day after the
expatriation date.
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‘‘(3) TREATMENT OF TAX.—Any tax paid under
paragraph (1) shall be treated as a payment of the
tax imposed by this chapter for the taxable year to
which subsection (a) applies.
‘‘(4) DEFERRAL OF TAX.—The provisions of sub-
section (b) shall apply to the tax imposed by this sub-
section to the extent attributable to gain includible in
gross income by reason of this section.
‘‘(i) SPECIAL LIENS FOR DEFERRED TAX AMOUNTS.—
‘‘(1) IMPOSITION OF LIEN.—
‘‘(A) IN GENERAL.—If a covered expatriate
makes an election under subsection (a)(4) or (b)
which results in the deferral of any tax imposed
by reason of subsection (a), the deferred amount
(including any interest, additional amount, ad-
dition to tax, assessable penalty, and costs at-
tributable to the deferred amount) shall be a lien
in favor of the United States on all property of
the expatriate located in the United States (with-
out regard to whether this section applies to the
property).
‘‘(B) DEFERRED AMOUNT.—For purposes of
this subsection, the deferred amount is the
amount of the increase in the covered expatri-
ate’s income tax which, but for the election under
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subsection (a)(4) or (b), would have occurred by
reason of this section for the taxable year includ-
ing the expatriation date.
‘‘(2) PERIOD OF LIEN.—The lien imposed by this
subsection shall arise on the expatriation date and
continue until—
‘‘(A) the liability for tax by reason of this
section is satisfied or has become unenforceable
by reason of lapse of time, or
‘‘(B) it is established to the satisfaction of
the Secretary that no further tax liability may
arise by reason of this section.
‘‘(3) CERTAIN RULES APPLY.—The rules set forth
in paragraphs (1), (3), and (4) of section 6324A(d)
shall apply with respect to the lien imposed by this
subsection as if it were a lien imposed by section
6324A.
‘‘(j) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section.’’.
(b) INCLUSION IN INCOME OF GIFTS AND BEQUESTS
RECEIVED BY UNITED STATES CITIZENS AND RESIDENTS
FROM EXPATRIATES.—Section 102 (relating to gifts, etc.
not included in gross income) is amended by adding at the
end the following new subsection:
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‘‘(d) GIFTS AND INHERITANCES FROM COVERED EX-
PATRIATES.—
‘‘(1) IN GENERAL.—Subsection (a) shall not ex-
clude from gross income the value of any property ac-
quired by gift, bequest, devise, or inheritance from a
covered expatriate after the expatriation date. For
purposes of this subsection, any term used in this sub-
section which is also used in section 877A shall have
the same meaning as when used in section 877A.
‘‘(2) EXCEPTIONS FOR TRANSFERS OTHERWISE
SUBJECT TO ESTATE OR GIFT TAX.—Paragraph (1)
shall not apply to any property if either—
‘‘(A) the gift, bequest, devise, or inheritance
is—
‘‘(i) shown on a timely filed return of
tax imposed by chapter 12 as a taxable gift
by the covered expatriate, or
‘‘(ii) included in the gross estate of the
covered expatriate for purposes of chapter
11 and shown on a timely filed return of
tax imposed by chapter 11 of the estate of
the covered expatriate, or
‘‘(B) no such return was timely filed but no
such return would have been required to be filed
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even if the covered expatriate were a citizen or
long-term resident of the United States.’’.
(c) DEFINITION OF TERMINATION OF UNITED STATES
CITIZENSHIP.—Section 7701(a) is amended by adding at
the end the following new paragraph:
‘‘(48) TERMINATION OF UNITED STATES CITIZEN-
SHIP.—
‘‘(A) IN GENERAL.—An individual shall not
cease to be treated as a United States citizen be-
fore the date on which the individual’s citizen-
ship is treated as relinquished under section
877A(e)(3).
‘‘(B) DUAL
CITIZENS.—Under regulations
prescribed by the Secretary, subparagraph (A)
shall not apply to an individual who became at
birth a citizen of the United States and a citizen
of another country.’’.
(d) INELIGIBILITY
FOR
VISA
OR
ADMISSION
TO
UNITED STATES.—
(1) IN GENERAL.—Section 212(a)(10)(E) of the
Immigration 
and 
Nationality 
Act 
(8 
U.S.C.
1182(a)(10)(E)) is amended to read as follows:
‘‘(E) FORMER
CITIZENS
NOT
IN
COMPLI-
ANCE
WITH
EXPATRIATION
REVENUE
PROVI-
SIONS.—Any alien who is a former citizen of the
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United States who relinquishes United States
citizenship (within the meaning of section
877A(e)(3) of the Internal Revenue Code of 1986)
and who is not in compliance with section 877A
of such Code (relating to expatriation).’’.
(2) AVAILABILITY OF INFORMATION.—
(A) IN GENERAL.—Section 6103(l) (relating
to disclosure of returns and return information
for purposes other than tax administration) is
amended by adding at the end the following new
paragraph:
‘‘(19) DISCLOSURE TO DENY VISA OR ADMISSION
TO CERTAIN EXPATRIATES.—Upon written request of
the Attorney General or the Attorney General’s dele-
gate, the Secretary shall disclose whether an indi-
vidual is in compliance with section 877A (and if not
in compliance, any items of noncompliance) to offi-
cers and employees of the Federal agency responsible
for administering section 212(a)(10)(E) of the Immi-
gration and Nationality Act solely for the purpose of,
and to the extent necessary in, administering such
section 212(a)(10)(E).’’.
(B) SAFEGUARDS.—
(i) TECHNICAL
AMENDMENTS.—Para-
graph (4) of section 6103(p) of the Internal
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(1) Section 877 is amended by adding at the end
the following new subsection:
‘‘(g) APPLICATION.—This section shall not apply to an
expatriate (as defined in section 877A(e)) whose expatria-
tion date (as so defined) occurs on or after February 5,
2003.’’.
(2) Section 2107 is amended by adding at the
end the following new subsection:
‘‘(f) APPLICATION.—This section shall not apply to
any expatriate subject to section 877A.’’.
(3) Section 2501(a)(3) is amended by adding at
the end the following new subparagraph:
‘‘(F) APPLICATION.—This paragraph shall
not apply to any expatriate subject to section
877A.’’.
(4)(A) Paragraph (1) of section 6039G(d) is
amended by inserting ‘‘or 877A’’ after ‘‘section 877’’.
(B) The second sentence of section 6039G(e) is
amended by inserting ‘‘or who relinquishes United
States citizenship (within the meaning of section
877A(e)(3))’’ after ‘‘877(a))’’.
(C) Section 6039G(f) is amended by inserting
‘‘or 877A(e)(2)(B)’’ after ‘‘877(e)(1)’’.
(f) CLERICAL AMENDMENT.—The table of sections for
subpart A of part II of subchapter N of chapter 1 is amend-
†
HR 1307 EAS
ed by inserting after the item relating to section 877 the
following new item:
‘‘Sec. 877A. Tax responsibilities of expatriation.’’.
(g) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in this
subsection, the amendments made by this section shall
apply to expatriates (within the meaning of section
877A(e) of the Internal Revenue Code of 1986, as
added by this section) whose expatriation date (as so
defined) occurs on or after February 5, 2003.
(2) GIFTS AND BEQUESTS.—Section 102(d) of
the Internal Revenue Code of 1986 (as added by sub-
section (b)) shall apply to gifts and bequests received
on or after February 5, 2003, from an individual or
the estate of an individual whose expatriation date
(as so defined) occurs after such date.
(3) DUE DATE FOR TENTATIVE TAX.—The due
date under section 877A(h)(2) of the Internal Revenue
Code of 1986, as added by this section, shall in no
event occur before the 90th day after the date of the
enactment of this Act.
Attest:
Secretary.