SEC. 2. DEFERRED PAYMENT OF TAX BY CERTAIN SMALL 
BUSINESSES. 
(a) IN GENERAL.—Subchapter B of chapter 62 of the 
Internal Revenue Code of 1986 (relating to extensions of 
time for payment of tax) is amended by adding at the end 
the following new section: 
‘‘SEC. 6168. EXTENSION OF TIME FOR PAYMENT OF TAX FOR 
CERTAIN SMALL BUSINESSES. 
‘‘(a) IN GENERAL.—An eligible small business may 
elect to pay the tax imposed by chapter 1 in 4 equal in-
stallments. 
‘‘(b) LIMITATION.—The maximum amount of tax 
which may be paid in installments under this section for 
any taxable year shall not exceed whichever of the fol-
lowing is the least: 
‘‘(1) The tax imposed by chapter 1 for the tax-
able year. 
‘‘(2) The amount contributed by the taxpayer 
into a GROW Account during such year. 
‘‘(3) The excess of $275,000 over the aggregate 
amount of tax for which an election under this sec-
tion was made by the taxpayer (or any predecessor) 
for all prior taxable years. 
‘‘(c) ELIGIBLE SMALL BUSINESS.—For purposes of 
this section— 
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‘‘(1) IN
GENERAL.—The term ‘eligible small 
business’ means, with respect to any taxable year, 
any person if— 
‘‘(A) such person meets the active business 
requirements of section 1202(e) throughout 
such taxable year, 
‘‘(B) the taxpayer has gross receipts of 
$12,000,000 or less for the taxable year, 
‘‘(C) the gross receipts of the taxpayer for 
such taxable year are at least 10 percent great-
er than the average annual gross receipts of the 
taxpayer (or any predecessor) for the 2 prior 
taxable years, and 
‘‘(D) the taxpayer uses an accrual method 
of accounting. 
‘‘(2) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of paragraphs (2) and (3) of section 
448(c) shall apply for purposes of this subsection. 
‘‘(d) DATE FOR PAYMENT OF INSTALLMENTS; IN-
TEREST.— 
‘‘(1) DATE FOR PAYMENT OF INSTALLMENTS.— 
‘‘(A) IN GENERAL.—If an election is made 
under this section for any taxable year, the first 
installment shall be paid on or before the due 
date for such installment and each succeeding 
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installment shall be paid on or before the date 
which is 1 year after the date prescribed by this 
paragraph for payment of the preceding install-
ment. 
‘‘(B) DUE
DATE
FOR
FIRST
INSTALL-
MENT.—The due date for the first installment 
for a taxable year shall be whichever of the fol-
lowing is the earliest: 
‘‘(i) The date selected by the tax-
payer. 
‘‘(ii) The date which is 2 years after 
the date prescribed by section 6151(a) for 
payment of the tax for such taxable year. 
‘‘(C) ADDITIONAL DEFERRAL WHERE EM-
PLOYMENT INCREASES.— 
‘‘(i) 
IN
GENERAL.—Subparagraph 
(B)(ii) shall be applied by substituting ‘3 
years’ for ‘2 years’ in the case of an eligi-
ble small business which meets the employ-
ment increase requirement of clause (ii) for 
the second taxable year following the tax-
able year for which the election is made. 
‘‘(ii) EMPLOYMENT
INCREASE
RE-
QUIREMENT.—The employment increase 
requirement of this clause is met for such 
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second taxable year if the average daily 
number of full-time employees of such 
business for the last calendar quarter end-
ing in such taxable year is at least 10 per-
cent greater than such average number for 
the last calendar quarter ending before the 
date that the GROW Account of such busi-
ness is established. For purposes of this 
clause, an employee shall be considered 
full-time if such employee is employed at 
least 35 hours per week. 
‘‘(iii) 
SALARY
MAINTENANCE
OF 
CALLED-UP RESERVIST TREATED AS EM-
PLOYMENT
INCREASE.—For purposes of 
clause (ii), an eligible small business shall 
be treated as having an additional full-time 
employee for any period for each employee 
who is a Ready Reserve/National Guard 
employee of such business serving on quali-
fied active duty for such period if the com-
pensation paid or incurred by such busi-
ness to such employee for such period is 
not less than the active duty wage differen-
tial of such employee for such period. For 
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the definition of terms used in this clause, 
see subsection (g). 
‘‘(2) INTEREST.—For purposes of determining 
interest under section 6601, if the time for payment 
of an amount of tax has been extended under this 
section, the due date prescribed for payment of such 
tax which is to be paid in an installment under this 
section shall be the due date for such installment. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) APPLICATION
OF
LIMITATION
TO
PART-
NERS AND S CORPORATION SHAREHOLDERS.— 
‘‘(A) IN GENERAL.—In applying this sec-
tion to a partnership which is an eligible small 
business— 
‘‘(i) the election under subsection (a) 
shall be made by the partnership, 
‘‘(ii) the amount referred to in sub-
section (b)(1) shall be the sum of each 
partner’s tax which is attributable to items 
of the partnership and assuming the high-
est marginal rate under section 1, and 
‘‘(iii) the partnership shall be treated 
as the taxpayer referred to in paragraphs 
(2) and (3) of subsection (b). 
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‘‘(B) OVERALL LIMITATION ALSO APPLIED 
AT PARTNER LEVEL.—In the case of a partner 
in a partnership, the limitation under sub-
section (b)(3) shall be applied at the partner-
ship and partner levels. 
‘‘(C) SIMILAR
RULES
FOR
S
CORPORA-
TIONS.—Rules similar to the rules of subpara-
graphs (A) and (B) shall apply to shareholders 
in an S corporation. 
‘‘(2) ACCELERATION OF PAYMENT IN CERTAIN 
CASES.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) the taxpayer ceases to meet the 
requirement of subsection (c)(1)(A), or 
‘‘(ii) there is an ownership change 
with respect to the taxpayer, 
then the extension of time for payment of tax 
provided in subsection (a) shall cease to apply, 
and the unpaid portion of the tax payable in in-
stallments shall be paid on or before the due 
date for filing the return of tax imposed by 
chapter 1 for the first taxable year following 
such cessation. 
‘‘(B) OWNERSHIP CHANGE.—For purposes 
of subparagraph, in the case of a corporation, 
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the term ‘ownership change’ has the meaning 
given to such term by section 382. Rules simi-
lar to the rules applicable under the preceding 
sentence shall apply to a partnership. 
‘‘(3) PRORATION OF DEFICIENCY TO INSTALL-
MENTS.—Rules similar to the rules of section 
6166(e) shall apply for purposes of this section. 
‘‘(f) GROW ACCOUNT.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘GROW Account’ 
means a trust created or organized in the United 
States for the exclusive benefit of an eligible small 
business, but only if the written governing instru-
ment creating the trust meets the following require-
ments: 
‘‘(A) No contribution will be accepted for 
any taxable year in excess of the amount al-
lowed as a deferral under subsection (b) for 
such year. 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary 
that the manner in which such person will ad-
minister the trust will be consistent with the re-
quirements of this section. 
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‘‘(C) The assets of the trust consist en-
tirely of cash or of obligations which have ade-
quate stated interest (as defined in section 
1274(c)(2)) and which pay such interest not 
less often than annually. 
‘‘(D) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(E) Amounts in the trust may be used 
only— 
‘‘(i) as security for a loan to the busi-
ness or for repayment of such loan, or 
‘‘(ii) to pay the installments under 
this section. 
‘‘(2) ACCOUNT TAXED AS GRANTOR TRUST.— 
The grantor of a GROW Account shall be treated 
for purposes of this title as the owner of such Ac-
count and shall be subject to tax thereon in accord-
ance with subpart E of part I of subchapter J of 
this chapter (relating to grantors and others treated 
as substantial owners). 
‘‘(3) TIME WHEN PAYMENTS DEEMED MADE.— 
For purposes of this section, a taxpayer shall be 
deemed to have made a payment to a GROW Ac-
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count on the last day of a taxable year if such pay-
ment is made on account of such taxable year and 
is made within 31⁄2 months after the close of such 
taxable year. 
‘‘(g) DEFINITIONS RELATING TO SALARY MAINTE-
NANCE OF CALLED-UP RESERVISTS.—For purposes of 
subsection (d)(1)(C)(iii)— 
‘‘(1) READY
RESERVE/NATIONAL
GUARD
EM-
PLOYEE.— 
‘‘(A) IN GENERAL.—The term ‘Ready Re-
serve/National Guard employee’ means any em-
ployee— 
‘‘(i) who is a member of the Ready 
Reserve or of the National Guard, and 
‘‘(ii) who was an employee of the tax-
payer during the 1-year period ending on 
the day before the date that the employee 
begins qualified active duty. 
‘‘(B) NATIONAL GUARD.—The term ‘Na-
tional Guard’ has the meaning given such term 
by section 101(c)(1) of title 10, United States 
Code. 
‘‘(C) READY RESERVE.—The term ‘Ready 
Reserve’ has the meaning given such term by 
section 10142 of title 10, United States Code. 
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‘‘(2) QUALIFIED
ACTIVE
DUTY.—The term 
‘qualified active duty’ means— 
‘‘(A) active duty under an order or call for 
a period in excess of 90 days or for an indefi-
nite period, other than the training duty speci-
fied in— 
‘‘(i) section 10147 of title 10, United 
States Code (relating to training require-
ments for the Ready Reserve), or 
‘‘(ii) section 502(a) of title 32, United 
States Code (relating to required drills and 
field exercises for the National Guard), 
in connection with which an employee is entitled 
to reemployment rights and other benefits or to 
a leave of absence from employment under 
chapter 43 of title 38, United States Code, and 
‘‘(B) hospitalization incident to such active 
duty. 
‘‘(3) ACTIVE DUTY WAGE DIFFERENTIAL.— 
‘‘(A) IN GENERAL.—The active duty wage 
differential of a Ready Reserve/National Guard 
employee for any period of qualified active duty 
is the amount equal to the product of— 
‘‘(i) the daily wage differential of such 
employee for such period, multiplied by 
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‘‘(ii) the number of days that such 
employee is on qualified active duty during 
such period. 
‘‘(B) DAILY
WAGE
DIFFERENTIAL.—For 
purposes of subparagraph (A), the daily wage 
differential of a Ready Reserve/National Guard 
employee for any period is an amount equal to 
the excess of— 
‘‘(i) such employee’s average daily em-
ployer-provided compensation for such pe-
riod, over 
‘‘(ii) such employee’s average daily 
military pay for such period. 
‘‘(C) AVERAGE
DAILY
EMPLOYER-PRO-
VIDED COMPENSATION.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (B), an employee’s average 
daily employer-provided compensation for 
any period is the average daily compensa-
tion paid by the employer to the employee 
for the 1-year period ending on the day be-
fore the date that the employee begins 
qualified active duty, adjusted for cost-of- 
living and other increases generally appli-
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cable to employees of the employer for 
such period. 
‘‘(ii) 
EMPLOYER-PROVIDED
COM-
PENSATION.—The 
term 
‘compensation’ 
means any remuneration for employment, 
whether in cash or in kind, which is allow-
able 
as 
a 
deduction 
under 
section 
162(a)(1). 
‘‘(D) AVERAGE DAILY MILITARY PAY.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (B), a Ready Reserve/Na-
tional Guard employee’s average daily mili-
tary pay is the average daily military pay 
and allowances received by the employee on 
account of the employee’s performance of 
qualified active duty during the period. 
‘‘(ii) MILITARY
PAY
AND
ALLOW-
ANCES.—For purposes of clause (i)— 
‘‘(I) MILITARY
PAY.—The term 
‘military pay’ means pay (as defined 
in section 101(21) of title 37, United 
States Code). 
‘‘(II) ALLOWANCES.—The term 
‘allowances’ means the allowances 
payable to a member of the Armed 
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Forces of the United States under 
chapter 7 of such title. 
‘‘(h) REPORTS.—The Secretary may require such re-
porting as the Secretary determines to be appropriate to 
carry out this section. 
‘‘(i) APPLICATION OF SECTION.—This section shall 
apply to taxes imposed for taxable years beginning after 
the date of the enactment of this section and before Janu-
ary 1, 2011.’’. 
(b) PRIORITY OF LENDER.—Subsection (b) of section 
6323 of such Code is amended by adding at the end the 
following new paragraph: 
‘‘(11) LOANS SECURED BY GROW ACCOUNTS.— 
With respect to a GROW account (as defined in sec-
tion 6168(f)) with any bank (as defined in section 
408(n)), to the extent of any loan made by such 
bank without actual notice or knowledge of the exist-
ence of such lien, as against such bank, if such loan 
is secured by such account.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subchapter B of chapter 62 of such Code is amended 
by adding at the end the following new item: 
‘‘Sec. 6168. Extension of time for payment of tax for certain small busi-
nesses.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
(e) STUDY BY GENERAL ACCOUNTING OFFICE.— 
(1) STUDY.—In consultation with the Secretary 
of the Treasury, the Comptroller General of the 
United States shall undertake a study to evaluate 
the applicability (including administrative aspects) 
and impact of the GROW America’s Small Busi-
nesses Act of 2009, including how it affects the cap-
ital funding needs of businesses under the Act and 
number of businesses benefitting. 
(2) REPORT.—Not later than March 31, 2011, 
the Comptroller General shall transmit to the Com-
mittee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the 
Senate a written report presenting the results of the 
study conducted pursuant to this subsection, to-
gether with such recommendations for legislative or 
administrative changes as the Comptroller General 
determines are appropriate. 
Æ 
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