H. R. 5771—63 
any inference with respect to the determination of who is an 
employee or employer— 
(1) for Federal tax purposes (other than the purposes set 
forth in the amendments made by this section), or 
(2) for purposes of any other provision of law. 
SEC. 207. EXCLUSION OF DIVIDENDS FROM CONTROLLED FOREIGN 
CORPORATIONS FROM THE DEFINITION OF PERSONAL 
HOLDING COMPANY INCOME FOR PURPOSES OF THE PER-
SONAL HOLDING COMPANY RULES. 
(a) IN GENERAL.—Section 543(a)(1) is amended— 
(1) by redesignating subparagraphs (C) and (D) as subpara-
graphs (D) and (E), respectively, and 
(2) by inserting after subparagraph (B) the following: 
‘‘(C) dividends received by a United States shareholder 
(as defined in section 951(b)) from a controlled foreign 
corporation (as defined in section 957(a)),’’. 
(b) EFFECTIVE DATE.—The amendments made by this Act shall 
apply to taxable years ending on or after the date of the enactment 
of this Act. 
SEC. 208. INFLATION ADJUSTMENT FOR CERTAIN CIVIL PENALTIES 
UNDER THE INTERNAL REVENUE CODE OF 1986. 
(a) FAILURE TO FILE TAX RETURN OR PAY TAX.—Section 6651 
is amended by adding at the end the following new subsection: 
‘‘(i) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any return required to 
be filed in a calendar year beginning after 2014, the $135 
dollar amount under subsection (a) shall be increased by such 
dollar amount multiplied by the cost-of-living adjustment deter-
mined under section 1(f)(3) determined by substituting ‘calendar 
year 2013’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
‘‘(2) ROUNDING.—If any amount adjusted under paragraph 
(1) is not a multiple of $5, such amount shall be rounded 
to the next lowest multiple of $5.’’. 
(b) FAILURE TO FILE CERTAIN INFORMATION RETURNS, REG-
ISTRATION STATEMENTS, ETC.— 
(1) IN GENERAL.—Section 6652(c) is amended by adding 
at the end the following new paragraph: 
‘‘(6) ADJUSTMENT FOR INFLATION.— 
‘‘(A) IN GENERAL.—In the case of any failure relating 
to a return required to be filed in a calendar year beginning 
after 2014, each of the dollar amounts under paragraphs 
(1), (2), and (3) 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 2013’ for ‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(B) ROUNDING.—If any amount adjusted under 
subparagraph (A)— 
‘‘(i) is not less than $5,000 and is not a multiple 
of $500, such amount shall be rounded to the next 
lowest multiple of $500, and 
‘‘(ii) is not described in clause (i) and is not a 
multiple of $5, such amount shall be rounded to the 
next lowest multiple of $5.’’. 
(2) CONFORMING AMENDMENTS.—
H. R. 5771—64 
(A) The last sentence of section 6652(c)(1)(A) is 
amended by striking ‘‘the first sentence of this subpara-
graph shall be applied by substituting ‘$100’ for ‘$20’ and’’ 
and inserting ‘‘in applying the first sentence of this 
subparagraph, the amount of the penalty for each day 
during which a failure continues shall be $100 in lieu 
of the amount otherwise specified, and’’. 
(B) Section 6652(c)(2)(C)(ii) is amended by striking ‘‘the 
first sentence of paragraph (1)(A)’’ and all that follows 
and inserting ‘‘in applying the first sentence of paragraph 
(1)(A), the amount of the penalty for each day during 
which a failure continues shall be $100 in lieu of the 
amount otherwise specified, and in lieu of applying the 
second sentence of paragraph (1)(A), the maximum penalty 
under paragraph (1)(A) shall not exceed $50,000, and’’. 
(c) OTHER ASSESSABLE PENALTIES WITH RESPECT
TO
THE 
PREPARATION OF TAX RETURNS FOR OTHER PERSONS.—Section 6695 
is amended by adding at the end the following new subsection: 
‘‘(h) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any failure relating to 
a return or claim for refund filed in a calendar year beginning 
after 2014, each of the dollar amounts under subsections (a), 
(b), (c), (d), (e), (f), and (g) 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 
2013’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
‘‘(2) ROUNDING.—If any amount adjusted under subpara-
graph (A)— 
‘‘(A) is not less than $5,000 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 clause (i) and is not a multiple 
of $5, such amount shall be rounded to the next lowest 
multiple of $5.’’. 
(d) FAILURE TO FILE PARTNERSHIP RETURN.—Section 6698 is 
amended by adding at the end the following new subsection: 
‘‘(e) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any return required to 
be filed in a calendar year beginning after 2014, the $195 
dollar amount under subsection (b)(1) 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 2013’ for ‘calendar year 1992’ in subparagraph 
(B) thereof. 
‘‘(2) ROUNDING.—If any amount adjusted under paragraph 
(1) is not a multiple of $5, such amount shall be rounded 
to the next lowest multiple of $5.’’. 
(e) FAILURE TO FILE S CORPORATION RETURN.—Section 6699 
is amended by adding at the end the following new subsection: 
‘‘(e) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of any return required to 
be filed in a calendar year beginning after 2014, the $195 
dollar amount under subsection (b)(1) 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 2013’ for ‘calendar year 1992’ in subparagraph 
(B) thereof.
H. R. 5771—65 
‘‘(2) ROUNDING.—If any amount adjusted under paragraph 
(1) is not a multiple of $5, such amount shall be rounded 
to the next lowest multiple of $5.’’. 
(f) FAILURE TO FILE CORRECT INFORMATION RETURNS.—Section 
6721(f)(1) is amended by striking ‘‘For each fifth calendar year 
beginning after 2012’’ and inserting ‘‘In the case of any failure 
relating to a return required to be filed in a calendar year beginning 
after 2014’’. 
(g) FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.—Section 
6722(f)(1) is amended by striking ‘‘For each fifth calendar year 
beginning after 2012’’ and inserting ‘‘In the case of any failure 
relating to a statement required to be furnished in a calendar 
year beginning after 2014’’. 
(h) EFFECTIVE DATE.—The amendments made by this section 
shall apply to returns required to be filed after December 31, 
2014. 
SEC. 209. INCREASE IN CONTINUOUS LEVY. 
(a) IN GENERAL.—Paragraph (3) of section 6331(h) is amended 
by striking the period at the end and inserting ‘‘and by substituting 
‘30 percent’ for ‘15 percent’ in the case of any specified payment 
due to a Medicare provider or supplier under title XVIII of the 
Social Security Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to payments made after 180 days after the date of 
the enactment of this Act. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.