(4) by adding at the end the following new 
paragraph: 
‘‘(2) ADDITIONAL
REQUIREMENTS
WITH
RE-
SPECT
TO
GRANTOR
RETAINED
ANNUITIES.—For 
purposes of subsection (a), in the case of an interest 
described in paragraph (1)(A) (determined without 
regard to this paragraph) which is retained by the 
transferor, such interest shall be treated as de-
scribed in such paragraph only if— 
‘‘(A) the right to receive the fixed amounts 
referred to in such paragraph is for a term of 
not less than 10 years, 
‘‘(B) such fixed amounts, when determined 
on an annual basis, do not decrease relative to 
any prior year during the first 10 years of the 
term referred to in subparagraph (A), and 
‘‘(C) the remainder interest has a value 
greater than zero determined as of the time of 
the transfer.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers made after the date 
of the enactment of this Act. 
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SEC. 212. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC 
BIOFUEL PRODUCER CREDIT. 
(a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) 
is amended— 
(1) by striking ‘‘or’’ at the end of subclause (I); 
(2) by striking the period at the end of sub-
clause (II) and inserting ‘‘, or’’; 
(3) by adding at the end the following new sub-
clause: 
‘‘(III) such fuel has an acid num-
ber greater than 25.’’; and 
(4) by striking ‘‘UNPROCESSED’’ in the heading 
and inserting ‘‘CERTAIN’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to fuels sold or used on or after 
January 1, 2010. 
SEC. 213. 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 ‘‘$1,500,000’’. 
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(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 ‘‘$30’’. 
(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 
‘‘$250,000’’. 
(c) REDUCTION WHERE CORRECTION ON OR BE-
FORE 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 
‘‘$500,000’’. 
(d) AGGREGATE ANNUAL LIMITATIONS FOR PER-
SONS WITH GROSS RECEIPTS
OF NOT MORE THAN 
$5,000,000.— 
(1) IN
GENERAL.—Paragraph (1) of section 
6721(d) is amended— 
(A) by striking ‘‘$100,000’’ in subpara-
graph (A) and inserting ‘‘$500,000’’; 
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(B) by striking ‘‘$25,000’’ in subpara-
graph (B) and inserting ‘‘$75,000’’; and 
(C) by striking ‘‘$50,000’’ in subparagraph 
(C) and inserting ‘‘$200,000’’. 
(2) TECHNICAL AMENDMENT.—Paragraph (1) 
of section 6721(d) is amended by striking ‘‘such tax-
able year’’ and inserting ‘‘such calendar year’’. 
(e) PENALTY
IN
CASE
OF
INTENTIONAL
DIS-
REGARD.—Paragraph (2) of section 6721(e) is amended 
by striking ‘‘$100’’ and inserting ‘‘$250’’. 
(f) ADJUSTMENT FOR INFLATION.—Section 6721 is 
amended by adding at the end the following new sub-
section: 
‘‘(f) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year beginning after 2014, each of the dollar 
amounts under subsections (a), (b), (d) (other than 
paragraph (2)(A) thereof), and (e) shall be increased 
by such dollar amount multiplied by the cost-of-liv-
ing adjustment determined under section 1(f)(3) de-
termined by substituting ‘calendar year 2011’ for 
‘calendar year 1992’ in subparagraph (B) thereof. 
‘‘(2) ADDITIONAL
ADJUSTMENTS
MADE
ONLY 
EVERY
FIFTH
YEAR.—Notwithstanding paragraph 
(1), in the case of any calendar year beginning after 
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2015 (other than every fifth calendar after 2015), 
each increase determined under paragraph (1) shall 
not exceed the amount of such increase determined 
for the preceding year. 
‘‘(3) ROUNDING.—If any amount adjusted 
under paragraph (1)— 
‘‘(A) is not less than $75,000 and is not 
a multiple of $500, such amount shall be 
rounded to the next lowest multiple of $500, 
and 
‘‘(B) is not described in subparagraph (A) 
and is not a multiple of $10, such amount shall 
be rounded to the next lowest multiple of $10.’’. 
(g) FAILURE TO FURNISH CORRECT PAYEE STATE-
MENTS.—Section 6722 is amended to read as follows: 
‘‘SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATE-
MENTS. 
‘‘(a) IMPOSITION OF PENALTY.— 
‘‘(1) GENERAL RULE.—In the case of each fail-
ure described in paragraph (2) by any person with 
respect to a payee statement, such person shall pay 
a penalty of $100 for each statement with respect to 
which such a failure occurs, but the total amount 
imposed on such person for all such failures during 
any calendar year shall not exceed $1,500,000. 
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‘‘(2) FAILURES
SUBJECT
TO
PENALTY.—For 
purposes of paragraph (1), the failures described in 
this paragraph are— 
‘‘(A) any failure to furnish a payee state-
ment on or before the date prescribed therefor 
to the person to whom such statement is re-
quired to be furnished, and 
‘‘(B) any failure to include all of the infor-
mation required to be shown on a payee state-
ment or the inclusion of incorrect information. 
‘‘(b) REDUCTION WHERE CORRECTION IN SPECIFIED 
PERIOD.— 
‘‘(1) CORRECTION
WITHIN
DAYS.—If any 
failure described in subsection (a)(2) is corrected on 
or before the day 30 days after the required filing 
date— 
‘‘(A) the penalty imposed by subsection (a) 
shall be $30 in lieu of $100, and 
‘‘(B) the total amount imposed on the per-
son for all such failures during any calendar 
year which are so corrected shall not exceed 
$250,000. 
‘‘(2) FAILURES CORRECTED ON OR BEFORE AU-
GUST
1.—If any failure described in subsection 
(a)(2) is corrected after the 30th day referred to in 
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paragraph (1) but on or before August 1 of the cal-
endar year in which the required filing date occurs— 
‘‘(A) the penalty imposed by subsection (a) 
shall be $60 in lieu of $100, and 
‘‘(B) the total amount imposed on the per-
son for all such failures during the calendar 
year which are so corrected shall not exceed 
$500,000. 
‘‘(c) EXCEPTION FOR DE MINIMIS FAILURES.— 
‘‘(1) IN GENERAL.—If— 
‘‘(A) a payee statement is furnished to the 
person to whom such statement is required to 
be furnished, 
‘‘(B) there is a failure described in sub-
section (a)(2)(B) (determined after the applica-
tion of section 6724(a)) with respect to such 
statement, and 
‘‘(C) such failure is corrected on or before 
August 1 of the calendar year in which the re-
quired filing date occurs, 
for purposes of this section, such statement shall be 
treated as having been furnished with all of the cor-
rect required information. 
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‘‘(2) LIMITATION.—The number of payee state-
ments to which paragraph (1) applies for any cal-
endar year shall not exceed the greater of— 
‘‘(A) 10, or 
‘‘(B) one-half of 1 percent of the total 
number of payee statements required to be filed 
by the person during the calendar year. 
‘‘(d) LOWER LIMITATIONS
FOR PERSONS WITH 
GROSS RECEIPTS OF NOT MORE THAN $5,000,000.— 
‘‘(1) IN GENERAL.—If any person meets the 
gross receipts test of paragraph (2) with respect to 
any calendar year, with respect to failures during 
such calendar year— 
‘‘(A) subsection (a)(1) shall be applied by 
substituting ‘$500,000’ for ‘$1,500,000’, 
‘‘(B) subsection (b)(1)(B) shall be applied 
by substituting ‘$75,000’ for ‘$250,000’, and 
‘‘(C) subsection (b)(2)(B) shall be applied 
by substituting ‘$200,000’ for ‘$500,000’. 
‘‘(2) GROSS RECEIPTS TEST.—A person meets 
the gross receipts test of this paragraph if such per-
son meets the gross receipts test of section 
6721(d)(2). 
‘‘(e) PENALTY
IN CASE
OF INTENTIONAL DIS-
REGARD.—If 1 or more failures to which subsection (a) 
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applies are due to intentional disregard of the requirement 
to furnish a payee statement (or the correct information 
reporting requirement), then, with respect to each such 
failure— 
‘‘(1) subsections (b), (c), and (d) shall not 
apply, 
‘‘(2) the penalty imposed under subsection 
(a)(1) shall be $250, or, if greater— 
‘‘(A) in the case of a payee statement 
other than a statement required under section 
6045(b), 6041A(e) (in respect of a return re-
quired under section 6041A(b)), 6050H(d), 
6050J(e), 6050K(b), or 6050L(c), 10 percent 
of the aggregate amount of the items required 
to be reported correctly, or 
‘‘(B) in the case of a payee statement re-
quired under section 6045(b), 6050K(b), or 
6050L(c), 5 percent of the aggregate amount of 
the items required to be reported correctly, and 
‘‘(3) in the case of any penalty determined 
under paragraph (2)— 
‘‘(A) the $1,500,000 limitation under sub-
section (a) shall not apply, and 
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‘‘(B) such penalty shall not be taken into 
account in applying such limitation to penalties 
not determined under paragraph (2). 
‘‘(f) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year beginning after 2014, each of the dollar 
amounts under subsections (a), (b), (d)(1), and (e) 
shall be increased by such dollar amount multiplied 
by the cost-of-living adjustment determined under 
section 1(f)(3) determined by substituting ‘calendar 
year 2011’ for ‘calendar year 1992’ in subparagraph 
(B) thereof. 
‘‘(2) ADDITIONAL
ADJUSTMENTS
MADE
ONLY 
EVERY
FIFTH
YEAR.—Notwithstanding paragraph 
(1), in the case of any calendar year beginning after 
2015 (other than every fifth calendar after 2015), 
each increase determined under paragraph (1) shall 
not exceed the amount of such increase determined 
for the preceding year. 
‘‘(3) ROUNDING.—If any amount adjusted 
under paragraph (1)— 
‘‘(A) is not less than $75,000 and is not 
a multiple of $500, such amount shall be 
rounded to the next lowest multiple of $500, 
and 
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‘‘(B) is not described in subparagraph (A) 
and is not a multiple of $10, such amount shall 
be rounded to the next lowest multiple of $10.’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to information returns 
required to be filed on or after January 1, 2011. 
SEC. 214. TREATMENT OF SECURITIES OF A CONTROLLED 
CORPORATION EXCHANGED FOR ASSETS IN 
CERTAIN REORGANIZATIONS. 
(a) IN GENERAL.—Section 361 is amended by adding 
at the end the following new subsection: 
‘‘(d) SPECIAL RULES FOR TRANSACTIONS INVOLVING 
SECTION 355 DISTRIBUTIONS.—In the case of a reorga-
nization described in section 368(a)(1)(D) with respect to 
which stock or securities of the corporation to which the 
assets are transferred are distributed in a transaction 
which qualifies under section 355— 
‘‘(1) this section shall be applied by substituting 
‘stock other than nonqualified preferred stock (as 
defined in section 351(g)(2))’ for ‘stock or securities’ 
in subsections (a) and (b)(1), and 
‘‘(2) the first sentence of subsection (b)(3) shall 
apply only to the extent that the sum of the money 
and the fair market value of the other property 
transferred to such creditors does not exceed the ad-
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justed bases of such assets transferred (reduced by 
the amount of the liabilities assumed (within the 
meaning of section 357(c))).’’. 
(b) CONFORMING AMENDMENT.—Paragraph (3) of 
section 361(b) is amended by striking the last sentence. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to exchanges after the date of the enact-
ment of this Act. 
(2) 
TRANSITION
RULE.—The 
amendments 
made by this section shall not apply to any exchange 
pursuant to a transaction which is— 
(A) made pursuant to an agreement which 
was binding on March 15, 2010, and at all 
times thereafter; 
(B) described in a ruling request submitted 
to the Internal Revenue Service on or before 
such date; or 
(C) described on or before such date in a 
public announcement or in a filing with the Se-
curities and Exchange Commission. 
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