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(B) AUTHORITY TO WAIVE.—The Secretary
of the Treasury or the Secretary’s delegate may
waive the application of paragraph (1) to any
taxpayer if the Secretary or the Secretary’s dele-
gate determines that the use of such offshore pay-
ment mechanisms is incidental to the trans-
action and, in addition, in the case of a trade
or business, such use is conducted in the ordi-
nary course of the type of trade or business of the
taxpayer.
(C) ISSUES RAISED.—For purposes of sub-
paragraph (A)(ii), an item shall be treated as an
issue raised during an examination if the indi-
vidual examining the return—
(i) communicates to the taxpayer
knowledge about the specific item, or
(ii) has made a request to the taxpayer
for information and the taxpayer could not
make a complete response to that request
without giving the examiner knowledge of
the specific item.
(b) APPLICABLE PENALTY.—For purposes of this sec-
tion, the term ‘‘applicable penalty’’ means any penalty, ad-
dition to tax, or fine imposed under chapter 68 of the Inter-
nal Revenue Code of 1986.
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(c) EFFECTIVE DATE.—The provisions of this section
shall apply to interest, penalties, additions to tax, and fines
with respect to any taxable year if, as of the date of the
enactment of this Act, the assessment of any tax, penalty,
or interest with respect to such taxable year is not prevented
by the operation of any law or rule of law.
SEC. 229. INCREASE IN PENALTY FOR BAD CHECKS AND
MONEY ORDERS.
(a) IN GENERAL.—Section 6657 (relating to bad
checks) is amended—
(1) by striking ‘‘$750’’ and inserting ‘‘$1,250’’,
and
(2) by striking ‘‘$15’’ and inserting ‘‘$25’’.
(b) EFFECTIVE DATE.—The amendments made by this
section apply to checks or money orders received after the
date of the enactment of this Act.
SEC. 230. TREATMENT OF CONTINGENT PAYMENT CON-
VERTIBLE DEBT INSTRUMENTS.
(a) IN GENERAL.—Section 1275(d) (relating to regula-
tion authority) is amended—
(1) by striking ‘‘The Secretary’’ and inserting
the following:
‘‘(1) IN GENERAL.—The Secretary’’, and
(2) by adding at the end the following new para-
graph:
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‘‘(2) TREATMENT OF CONTINGENT PAYMENT CON-
VERTIBLE DEBT.—
‘‘(A) IN GENERAL.—In the case of a debt in-
strument which—
‘‘(i) is convertible into stock of the
issuing corporation, into stock or debt of a
related party (within the meaning of section
267(b) or 707(b)(1)), or into cash or other
property in an amount equal to the approx-
imate value of such stock or debt, and
‘‘(ii) provides for contingent payments,
any regulations which require original issue dis-
count to be determined by reference to the com-
parable yield of a noncontingent fixed-rate debt
instrument shall be applied as if the regulations
require that such comparable yield be determined
by reference to a noncontingent fixed-rate debt
instrument which is convertible into stock.
‘‘(B) SPECIAL RULE.—For purposes of sub-
paragraph (A), the comparable yield shall be de-
termined without taking into account the yield
resulting from the conversion of a debt instru-
ment into stock.’’.
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(b) CROSS REFERENCE.—Section 163(e)(6) (relating
to cross references) is amended by adding at the end the
following:
‘‘For the treatment of contingent payment
convertible debt, see section 1275(d)(2).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to debt instruments issued on or after
the date of the enactment of this Act.
SEC. 231. EXTENSION OF IRS USER FEES.
Subsection (c) of section 7528 (relating to Internal
Revenue Service user fees) is amended by striking ‘‘Sep-
tember 30, 2014’’ and inserting ‘‘September 30, 2016’’.
SEC. 232. MODIFICATION OF COLLECTION DUE PROCESS
PROCEDURES FOR EMPLOYMENT TAX LIABIL-
ITIES.
(a) IN GENERAL.—Section 6330(f) (relating to jeop-
ardy and State refund collection) is amended—
(1) by striking ‘‘; or’’ at the end of paragraph
(1) and inserting a comma,
(2) by adding ‘‘or’’ at the end of paragraph (2),
and
(3) by inserting after paragraph (2) the fol-
lowing new paragraph:
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‘‘(3) the Secretary has served a levy in connec-
tion with the collection of taxes under chapter 21, 22,
23, or 24,’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to levies issued on or after the date that
is 120 days after the date of the enactment of this Act.
SEC. 233. MODIFICATIONS TO WHISTLEBLOWER REFORMS.
(a) 
MODIFICATION
OF
TAX
THRESHOLD
FOR
AWARDS.—Subparagraph (B) of section 7623(b)(5), as
added by the Tax Relief and Health Care Act of 2006, is
amended by striking ‘‘$2,000,000’’ and inserting ‘‘$20,000’’.
(b) WHISTLEBLOWER OFFICE.—
(1) IN GENERAL.—Section 7623 is amended by
adding at the end the following new subsections:
‘‘(c) WHISTLEBLOWER OFFICE.—
‘‘(1) IN GENERAL.—There is established in the
Internal Revenue Service an office to be known as the
‘Whistleblower Office’ which—
‘‘(A) shall at all times operate at the direc-
tion of the Commissioner and coordinate and
consult with other divisions in the Internal Rev-
enue Service as directed by the Commissioner,
‘‘(B) shall analyze information received
from any individual described in subsection (b)
and either investigate the matter itself or assign
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it to the appropriate Internal Revenue Service
office,
‘‘(C) shall monitor any action taken with
respect to such matter,
‘‘(D) shall inform such individual that it
has accepted the individual’s information for
further review,
‘‘(E) may require such individual and any
legal representative of such individual to not dis-
close any information so provided,
‘‘(F) in its sole discretion, may ask for ad-
ditional assistance from such individual or any
legal representative of such individual, and
‘‘(G) shall determine the amount to be
awarded to such individual under subsection (b).
‘‘(2) FUNDING FOR OFFICE.—There is authorized
to be appropriated $10,000,000 for each fiscal year
for the Whistleblower Office. These funds shall be used
to maintain the Whistleblower Office and also to re-
imburse other Internal Revenue Service offices for re-
lated costs, such as costs of investigation and collec-
tion.
‘‘(3) REQUEST FOR ASSISTANCE.—
‘‘(A) IN
GENERAL.—Any assistance re-
quested under paragraph (1)(F) shall be under
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the direction and control of the Whistleblower Of-
fice or the office assigned to investigate the mat-
ter under subparagraph (A). No individual or
legal representative whose assistance is so re-
quested may by reason of such request represent
himself or herself as an employee of the Federal
Government.
‘‘(B) FUNDING OF ASSISTANCE.—From the
amounts available for expenditure under sub-
section (b), the Whistleblower Office may, with
the agreement of the individual described in sub-
section (b), reimburse the costs incurred by any
legal representative of such individual in pro-
viding assistance described in subparagraph (A).
‘‘(d) REPORTS.—The Secretary shall each year con-
duct a study and report to Congress on the use of this sec-
tion, including—
‘‘(1) an analysis of the use of this section during
the preceding year and the results of such use, and
‘‘(2) any legislative or administrative rec-
ommendations regarding the provisions of this section
and its application.’’.
(2) CONFORMING AMENDMENT.—Section 406 of
division A of the Tax Relief and Health Care Act of
2006 is amended by striking subsections (b) and (c).
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(3) REPORT
ON
IMPLEMENTATION.—Not later
than 6 months after the date of the enactment of this
Act, the Secretary of the Treasury shall submit to
Congress a report on the establishment and operation
of the Whistleblower Office under section 7623(c) of
the Internal Revenue Code of 1986.
(c) PUBLICITY OF AWARD APPEALS.—Paragraph (4)
of section 7623(b), as added by the Tax Relief and Health
Care Act of 2006, is amended to read as follows:
‘‘(4) APPEAL OF AWARD DETERMINATION.—
‘‘(A) IN GENERAL.—Any determination re-
garding an award under paragraph (1), (2), or
(3) may, within 30 days of such determination,
be appealed to the Tax Court (and the Tax Court
shall have jurisdiction with respect to such mat-
ter).
‘‘(B) PUBLICITY
OF
APPEALS.—Notwith-
standing sections 7458 and 7461, the Tax Court
may, in order to preserve the anonymity, pri-
vacy, or confidentiality of any person under this
subsection, provide by rules adopted under sec-
tion 7453 that portions of filings, hearings, testi-
mony, evidence, and reports in connection with
proceedings under this subsection may be closed
to the public or to inspection by the public.’’.
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(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to information provided on or after the date of
the enactment of this Act.
(2) 
PUBLICITY
OF
AWARD
APPEALS.—The
amendment made by subsection (c) shall take effect as
if included in the amendments made by section 406
of the Tax Relief and Health Care Act of 2006.
SEC. 234. MODIFICATIONS OF DEFINITION OF EMPLOYEES
COVERED BY DENIAL OF DEDUCTION FOR EX-
CESSIVE EMPLOYEE REMUNERATION.
(a) IN GENERAL.—Paragraph (3) of section 162(m) is
amended to read as follows:
‘‘(3) COVERED EMPLOYEE.—For purposes of this
subsection, the term ‘covered employee’ means, with
respect to any taxpayer for any taxable year, an indi-
vidual who—
‘‘(A) was the chief executive officer of the
taxpayer, or an individual acting in such a ca-
pacity, at any time during the taxable year,
‘‘(B) is 1 of the 4 highest compensated offi-
cers of the taxpayer for the taxable year (other
than the individual described in subparagraph
(A)), or
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‘‘(C) was a covered employee of the taxpayer
(or any predecessor) for any preceding taxable
year beginning after December 31, 2006.
In the case of an individual who was a covered em-
ployee for any taxable year beginning after December
31, 2006, the term ‘covered employee’ shall include a
beneficiary of such employee with respect to any re-
muneration for services performed by such employee
as a covered employee (whether or not such services
are performed during the taxable year in which the
remuneration is paid).’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2006.
Subtitle C—General Provisions
SEC. 241. ENHANCED COMPLIANCE ASSISTANCE FOR SMALL
BUSINESSES.
(a) IN GENERAL.—Section 212 of the Small Business
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601
note) is amended by striking subsection (a) and inserting
the following:
‘‘(a) COMPLIANCE GUIDE.—
‘‘(1) IN GENERAL.—For each rule or group of re-
lated rules for which an agency is required to prepare
a final regulatory flexibility analysis under section
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605(b) of title 5, United States Code, the agency shall
publish 1 or more guides to assist small entities in
complying with the rule and shall entitle such publi-
cations ‘small entity compliance guides’.
‘‘(2) PUBLICATION OF GUIDES.—The publication
of each guide under this subsection shall include—
‘‘(A) the posting of the guide in an easily
identified location on the website of the agency;
and
‘‘(B) distribution of the guide to known in-
dustry contacts, such as small entities, associa-
tions, or industry leaders affected by the rule.
‘‘(3) PUBLICATION DATE.—An agency shall pub-
lish each guide (including the posting and distribu-
tion of the guide as described under paragraph (2))—
‘‘(A) on the same date as the date of publi-
cation of the final rule (or as soon as possible
after that date); and
‘‘(B) not later than the date on which the
requirements of that rule become effective.
‘‘(4) COMPLIANCE ACTIONS.—
‘‘(A) IN GENERAL.—Each guide shall ex-
plain the actions a small entity is required to
take to comply with a rule.
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‘‘(B) 
EXPLANATION.—The 
explanation
under subparagraph (A)—
‘‘(i) shall include a description of ac-
tions needed to meet the requirements of a
rule, to enable a small entity to know when
such requirements are met; and
‘‘(ii) if determined appropriate by the
agency, may include a description of pos-
sible procedures, such as conducting tests,
that may assist a small entity in meeting
such requirements, except that, compliance
with any procedures described pursuant to
this section does not establish compliance
with the rule, or establish a presumption or
inference of such compliance.
‘‘(C) PROCEDURES.—Procedures described
under subparagraph (B)(ii)—
‘‘(i) shall be suggestions to assist small
entities; and
‘‘(ii) shall not be additional require-
ments, or diminish requirements, relating to
the rule.
‘‘(5) AGENCY
PREPARATION
OF
GUIDES.—The
agency shall, in its sole discretion, taking into ac-
count the subject matter of the rule and the language