I
103D CONGRESS
1ST SESSION
H. R. 3419
To simplify certain provisions of the Internal Revenue Code of 1986, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 1, 1993
Mr. ROSTENKOWSKI introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To simplify certain provisions of the Internal Revenue Code
of 1986, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Tax Simplification and Technical Corrections Act of
1993’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title, etc.
TITLE I—PROVISIONS RELATING TO INDIVIDUALS
Subtitle A—Provisions Relating to Rollover of Gain on Sale of Principal
Residence
Sec. 101. Multiple sales within rollover period.
Sec. 102. Special rules in case of divorce.
Subtitle B—Other Provisions
Sec. 111. De minimis exception to passive loss rules.
Sec. 112. Payment of tax by credit card.
Sec. 113. Modifications to election to include child’s income on parent’s return.
Sec. 114. Simplified foreign tax credit limitation for individuals.
Sec. 115. Treatment of personal transactions by individuals under foreign cur-
rency rules.
Sec. 116. Expanded access to simplified income tax returns.
Sec. 117. Treatment of certain reimbursed expenses of rural mail carriers.
Sec. 118. Exclusion of combat pay from withholding limited to amount exclud-
able from gross income.
TITLE II—PENSION SIMPLIFICATION
Subtitle A—Simplified Distribution Rules
Sec. 201. Repeal of 5-year income averaging for lump-sum distributions.
Sec. 202. Repeal of $5,000 exclusion of employees’ death benefits.
Sec. 203. Simplified method for taxing annuity distributions under certain em-
ployer plans.
Sec. 204. Required distributions.
Subtitle B—Increased Access to Pension Plans
Sec. 211. Modifications of simplified employee pensions.
Sec. 212. Tax exempt organizations eligible under section 401(k).
Sec. 213. Duties of sponsors of certain prototype plans.
Subtitle C—Nondiscrimination Provisions
Sec. 221. Definition of highly compensated employees.
Sec. 222. Modification of additional participation requirements.
Sec. 223. Nondiscrimination rules for qualified cash or deferred arrangements
and matching contributions.
Subtitle D—Miscellaneous Simplification
Sec. 231. Treatment of leased employees.
Sec. 232. Modifications of cost-of-living adjustments.
Sec. 233. Plans covering self-employed individuals.
Sec. 234. Elimination of special vesting rule for multiemployer plans.
Sec. 235. Full-funding limitation of multiemployer plans.
Sec. 236. Alternative full-funding limitation.
Sec. 237. Distributions under rural cooperative plans.
Sec. 238. Treatment of governmental plans under section 415.
Sec. 239. Uniform retirement age.
Sec. 240. Uniform penalty provisions to apply to certain pension reporting re-
quirements.
Sec. 241. Contributions on behalf of disabled employees.
Sec. 242. Special rules for plans covering pilots.
Sec. 243. Treatment of deferred compensation plans of State and local govern-
ments and tax-exempt organizations.
Sec. 244. Treatment of employer reversions required by contract to be paid to
the United States.
Sec. 245. Continuation health coverage for employees of failed financial institu-
tions.
Sec. 246. Date for adoption of plan amendments.
TITLE III—TREATMENT OF LARGE PARTNERSHIPS
Subtitle A—General Provisions
Sec. 301. Simplified flow-through for large partnerships.
Sec. 302. Simplified audit procedures for large partnerships.
Sec. 303. Due date for furnishing information to partners of large partnerships.
Sec. 304. Returns may be required on magnetic media.
Sec. 305. Treatment of partnership items of individual retirement accounts.
Sec. 306. Effective date.
Subtitle B—Provisions Related to TEFRA Partnership Proceedings
Sec. 311. Treatment of partnership items in deficiency proceedings.
Sec. 312. Partnership return to be determinative of audit procedures to be fol-
lowed.
Sec. 313. Provisions relating to statute of limitations.
Sec. 314. Expansion of small partnership exception.
Sec. 315. Exclusion of partial settlements from 1 year limitation on assessment.
Sec. 316. Extension of time for filing a request for administrative adjustment.
Sec. 317. Availability of innocent spouse relief in context of partnership pro-
ceedings.
Sec. 318. Determination of penalties at partnership level.
Sec. 319. Provisions relating to court jurisdiction, etc.
Sec. 320. Treatment of premature petitions filed by notice partners or 5-per-
cent groups.
Sec. 321. Bonds in case of appeals from TEFRA proceeding.
Sec. 322. Suspension of interest where delay in computational adjustment re-
sulting from TEFRA settlements.
Sec. 323. Special rules for administrative adjustment requests with respect to
bad debts or worthless securities.
TITLE IV—FOREIGN PROVISIONS
Subtitle A—Simplification of Treatment of Passive Foreign Corporations
Sec. 401. Repeal of foreign personal holding company rules and foreign invest-
ment company rules.
Sec. 402. Replacement for passive foreign investment company rules.
Sec. 403. Technical and conforming amendments.
Sec. 404. Effective date.
Subtitle B—Treatment of Controlled Foreign Corporations
Sec. 411. Gain on certain stock sales by controlled foreign corporations treated
as dividends.
Sec. 412. Miscellaneous modifications to subpart F.
Sec. 413. Indirect foreign tax credit allowed for certain lower tier companies.
Subtitle C—Other Provisions
Sec. 421. Exchange rate used in translating foreign taxes.
Sec. 422. Election to use simplified section 904 limitation for alternative mini-
mum tax.
Sec. 423. Modification of section 1491.
Sec. 424. Modification of section 367(b).
TITLE V—OTHER INCOME TAX PROVISIONS
Subtitle A—Provisions Relating to Subchapter S Corporations
Sec. 501. Authority to validate certain invalid elections.
Sec. 502. Treatment of distributions during loss years.
Sec. 503. Electing small business trusts.
Sec. 504. Other modifications.
Subtitle B—Accounting Provision
Sec. 511. Modifications to look-back method for long-term contracts.
Subtitle C—Provisions Relating to Regulated Investment Companies
Sec. 521. Repeal of 30-percent gross income limitation.
Sec. 522. Basis rules for shares in open-end regulated investment companies.
Sec. 523. Nonrecognition treatment for certain transfers by common trust
funds to regulated investment companies.
Subtitle D—Tax-Exempt Bond Provisions
Sec. 531. Repeal of $100,000 limitation on unspent proceeds under 1-year ex-
ception from rebate.
Sec. 532. Exception from rebate for earnings on bona fide debt service fund
under construction bond rules.
Sec. 533. Repeal of debt service-based limitation on investment in certain
nonpurpose investments.
Sec. 534. Repeal of expired provisions.
Sec. 535. Clarification of investment-type property.
Sec. 536. Effective dates.
Subtitle E—Insurance Provisions
Sec. 541. Treatment of certain insurance contracts on retired lives.
Sec. 542. Treatment of modified guaranteed contracts.
Subtitle F—Other Provisions
Sec. 551. Closing of partnership taxable year with respect to deceased partner,
etc.
Sec. 552. Modification of credit for producing fuel from a nonconventional
source.
TITLE VI—ESTATE AND GIFT TAX PROVISIONS
Sec. 601. Clarification of waiver of certain rights of recovery.
Sec. 602. Adjustments for gifts within 3 years of decedent’s death.
Sec. 603. Clarification of qualified terminable interest rules.
Sec. 604. Transitional rule under section 2056A.
Sec. 605. Opportunity to correct certain failures under section 2032A.
TITLE VII—EXCISE TAX SIMPLIFICATION
Subtitle A—Provisions Related to Distilled Spirits, Wines, and Beer
Sec. 701. Credit or refund for imported bottled distilled spirits returned to dis-
tilled spirits plant.
Sec. 702. Authority to cancel or credit export bonds without submission of
records.
Sec. 703. Repeal of required maintenance of records on premises of distilled
spirits plant.
Sec. 704. Fermented material from any brewery may be received at a distilled
spirits plant.
Sec. 705. Repeal of requirement for wholesale dealers in liquors to post sign.
Sec. 706. Refund of tax to wine returned to bond not limited to
unmerchantable wine.
Sec. 707. Use of additional ameliorating material in certain wines.
Sec. 708. Domestically produced beer may be withdrawn free of tax for use of
foreign embassies, legations, etc.
Sec. 709. Beer may be withdrawn free of tax for destruction.
Sec. 710. Authority to allow drawback on exported beer without submission of
records.
Sec. 711. Transfer to brewery of beer imported in bulk without payment of tax.
Subtitle B—Other Excise Tax Provisions
Sec. 721. Authority to grant exemptions from registration requirements.
Sec. 722. Repeal of expired provisions.
TITLE VIII—ADMINISTRATIVE PROVISIONS
Subtitle A—General Provisions
Sec. 801. Use of reproductions of returns stored in digital image format.
Sec. 802. Repeal of authority to disclose whether prospective juror has been au-
dited.
Sec. 803. Repeal of special audit provisions for subchapter S items.
Sec. 804. Clarification of statute of limitations.
Sec. 805. Certain notices disregarded under provision increasing interest rate
on large corporate underpayments.
Subtitle B—Tax Court Procedures
Sec. 811. Overpayment determinations of Tax Court.
Sec. 812. Awarding of administrative costs.
Sec. 813. Redetermination of interest pursuant to motion.
Sec. 814. Application of net worth requirement for awards of litigation costs.
(3) Subsections (h)(1) and (k) of section 1034
are each amended by striking ‘‘(other than the 2
years referred to in subsection (c)(4))’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales of old residences (within
the meaning of section 1034 of the Internal Revenue Code
of 1986) after the date of the enactment of this Act.
SEC. 102. SPECIAL RULES IN CASE OF DIVORCE.
(a) IN GENERAL.—Subsection (c) of section 1034 is
amended by adding at the end thereof the following new
paragraph:
‘‘(5) If—
‘‘(A) a residence is sold by an individual
pursuant to a divorce or marital separation,
and
‘‘(B) the taxpayer used such residence as
his principal residence at any time during the
2-year period ending on the date of such sale,
for purposes of this section, such residence shall be
treated as the taxpayer’s principal residence at the
time of such sale.’’
(b) EFFECTIVE DATES.—The amendment made by
subsection (a) shall apply to sales of old residences (within
the meaning of section 1034 of the Internal Revenue Code
of 1986) after the date of the enactment of this Act.
Subtitle B—Other Provisions
SEC. 111. DE MINIMIS EXCEPTION TO PASSIVE LOSS RULES.
(a) GENERAL RULE.—Section 469 (relating to pas-
sive activity losses and credits limited) is amended—
(1) by striking subsection (m),
(2) by redesignating subsection (l) as subsection
(m), and
(3) by inserting after subsection (k) the follow-
ing new subsection:
‘‘(l) DE MINIMIS EXCEPTION.—
‘‘(1) IN GENERAL.—In the case of a natural
person, subsection (a) shall not apply to the passive
activity loss for any taxable year if the amount of
such loss does not exceed $200.
‘‘(2) EXCEPTION FOR ITEMS ATTRIBUTABLE TO
PUBLICLY TRADED PARTNERSHIPS.—This subsection
shall not apply to items treated separately under
subsection (k) (and such items shall not be taken
into account in determining whether paragraph (1)
applies to the taxpayer for the taxable year with re-
spect to other items).
‘‘(3) ESTATES ELIGIBLE.—For purposes of this
subsection, an estate shall be treated as a natural
person with respect to any taxable year ending less
than 2 years after the death of the decedent.
‘‘(4) MARRIED
INDIVIDUALS
FILING
SEPA-
RATELY.—
‘‘(A) IN GENERAL.—This subsection shall
not apply to a taxpayer who—
‘‘(i) is a married individual filing a
separate return for the taxable year, and
‘‘(ii) does not live apart from his
spouse at all times during such taxable
year.
‘‘(B) LIMITATION.—Paragraph (1) shall be
applied by substituting ‘$100’ for ‘$200’ in the
case of a married individual who files a sepa-
rate return for the taxable year and to whom
this subsection applies after the application of
subparagraph (A).’’
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (C) of section 56(b)(1) is
amended by striking clause (ii) and redesignating
the following clauses accordingly.
(2) Subsection (b) of section 58 is amended by
inserting ‘‘and’’ at the end of paragraph (1), by
striking paragraph (2), and by redesignating para-
graph (3) as paragraph (2).
(3) Paragraph (4) of section 163(d) is amended
by striking subparagraph (E).
(4) Subsection (d) of section 163 is amended by
striking paragraph (6).
(5) Subsection (h) of section 163 is amended by
striking paragraph (5).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 112. PAYMENT OF TAX BY CREDIT CARD.
(a) GENERAL RULE.—Section 6311 is amended to
read as follows:
‘‘SEC. 6311. PAYMENT 
BY 
CHECK, 
MONEY 
ORDER, 
OR
OTHER MEANS.
‘‘(a) AUTHORITY TO RECEIVE.—It shall be lawful for
the Secretary to receive for internal revenue taxes (or in
payment for internal revenue stamps) checks, money or-
ders, or any other commercially acceptable means that the
Secretary deems appropriate, including payment by use of
credit cards or debit cards, to the extent and under the
conditions provided in regulations prescribed by the Sec-
retary.
‘‘(b) ULTIMATE
LIABILITY.—If a check, money
order, or other method of payment, including payment by
credit card or debit card, so received is not duly paid, or
is paid and subsequently charged back to the Secretary,
the person by whom such check, or money order, or other
method of payment has been tendered shall remain liable
for the payment of the tax or for the stamps, and for all
legal penalties and additions, to the same extent as if such
check, money order, or other method of payment had not
been tendered.
‘‘(c) LIABILITY OF BANKS AND OTHERS.—If any cer-
tified, treasurer’s, or cashier’s check (or other guaranteed
draft), or any money order, or any other means of pay-
ment that has been guaranteed by a financial institution
(such as a credit card or debit card transaction which has
been guaranteed expressly by a financial institution) so
received is not duly paid, the United States shall, in addi-
tion to its right to exact payment from the party originally
indebted therefor, have a lien for—
‘‘(1) the amount of such check (or draft) upon
all assets of the financial institution on which
drawn,
‘‘(2) the amount of such money order upon all
the assets of the issuer thereof, or
‘‘(3) the guaranteed amount of any other trans-
action upon all the assets of the institution making
such guarantee,
and such amount shall be paid out of such assets in pref-
erence to any other claims whatsoever against such finan-
cial institution, issuer, or guaranteeing institution, except
31, United States Code, the Secretary is authorized
to enter into contracts to obtain services related to
receiving payment by other means where cost bene-
ficial to the Government and is further authorized to
pay any fees required by such contracts.
‘‘(3) SPECIAL PROVISIONS FOR USE OF CREDIT
CARDS.—If use of credit cards is accepted as a
method of payment of taxes pursuant to subsection
(a)—
‘‘(A) a payment of internal revenue taxes
(or a payment for internal revenue stamps) by
a person by use of a credit card shall not be
subject to section 161 of the Truth-in-Lending
Act (15 U.S.C. 1666), or to any similar provi-
sions of State law, if the error alleged by the
person is an error relating to the underlying tax
liability, rather than an error relating to the
credit card account such as a computational
error or numerical transposition in the credit
card transaction or an issue as to whether the
person authorized payment by use of the credit
card,
‘‘(B) a payment of internal revenue taxes
(or a payment for internal revenue stamps)
shall not be subject to section 170 of the Truth-
in-Lending Act (15 U.S.C. 1666i), or to any
similar provisions of State law,
‘‘(C) a payment of internal revenue taxes
(or a payment for internal revenue stamps) by
a person by use of a debit card shall not be
subject to section 908 of the Electronic Fund
Transfer Act (15 U.S.C. 1693f), or to any simi-
lar provisions of State law, if the error alleged
by the person is an error relating to the under-
lying tax liability, rather than an error relating
to the debit card account such as a computa-
tional error or numerical transposition in the
debit card transaction or an issue as to whether
the person authorized payment by use of the
debit card,
‘‘(D) the term ‘creditor’ under section
103(f) of the Truth-in-Lending Act (15 U.S.C.
1602(f)) shall not include the Secretary with re-
spect to credit card transactions in payment of
internal revenue taxes (or payment for internal
revenue stamps), and
‘‘(E) notwithstanding any other provision
of law to the contrary, in the case of payment
made by credit card or debit card transaction of
an amount owed to a person as the result of the
correction of an error under section 161 of the
Truth-in-Lending Act (15 U.S.C. 1666) or sec-
tion 908 of the Electronic Fund Transfer Act
(15 U.S.C. 1693f), the Secretary is authorized
to provide such amount to such person as a
credit to that person’s credit card or debit card
account through the applicable credit card or
debit card system.
‘‘(e) CONFIDENTIALITY OF INFORMATION.—
‘‘(1) IN
GENERAL.—Except as otherwise au-
thorized by this subsection, no person may use or
disclose any information relating to credit or debit
card transactions obtained pursuant to section
6103(k)(8) other than for purposes directly related
to the processing of such transactions, or the billing
or collection of amounts charged or debited pursuant
thereto.
‘‘(2) EXCEPTIONS.—
‘‘(A) Debit or credit card issuers or others
acting on behalf of such issuers may also use
and disclose such information for purposes di-
rectly related to servicing an issuer’s accounts.
‘‘(B) Debit or credit card issuers or others
directly involved in the processing of credit or
debit card transactions or the billing or collec-
tion of amounts charged or debited thereto may
also use and disclose such information for pur-
poses directly related to—
‘‘(i) statistical risk and profitability
assessment;
‘‘(ii) 
transferring 
receivables, 
ac-
counts, or interest therein;
‘‘(iii) auditing the account informa-
tion;
‘‘(iv) complying with Federal, State,
or local law; and
‘‘(v) properly authorized civil, crimi-
nal, or regulatory investigation by Federal,
State, or local authorities.
‘‘(3) PROCEDURES.—Use and disclosure of in-
formation under this paragraph shall be made only
to the extent authorized by written procedures pro-
mulgated by the Secretary.
‘‘(4) CROSS REFERENCE.—
‘‘For provision providing for civil damages for vio-
lation of paragraph (1), see section 7431.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter B of chapter 64 is amended by striking
the item relating to section 6311 and inserting the follow-
ing:
‘‘Sec. 6311. Payment by check, money order, or other means.’’
(c) AMENDMENTS
TO SECTIONS 6103 AND 7431
WITH RESPECT TO DISCLOSURE AUTHORIZATION.—
(1) Subsection (k) of section 6103 (relating to
confidentiality and disclosure of returns and return
information) is amended by adding at the end there-
of the following new paragraph:
‘‘(8) DISCLOSURE OF INFORMATION TO ADMIN-
ISTER SECTION 6311.—The Secretary may disclose
returns or return information to financial institu-
tions and others to the extent the Secretary deems
necessary for the administration of section 6311.
Disclosures of information for purposes other than
to accept payments by checks or money orders shall
be made only to the extent authorized by written
procedures promulgated by the Secretary.’’
(2) Section 7431 (relating to civil damages for
unauthorized disclosure of returns and return infor-
mation) is amended by adding at the end thereof the
following new subsection:
‘‘(g) SPECIAL RULE FOR INFORMATION OBTAINED
UNDER SECTION 6103(k)(8).—For purposes of this sec-
tion, any reference to section 6103 shall be treated as in-
cluding a reference to section 6311(e).’’
(3) Section 6103(p)(3)(A) is amended by strik-
ing ‘‘or (6)’’ and inserting in lieu thereof ‘‘(6), or
(8),’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the day 9 months after
the date of the enactment of this Act.
SEC. 113. MODIFICATIONS 
TO 
ELECTION 
TO 
INCLUDE
CHILD’S INCOME ON PARENT’S RETURN.
(a) ELIGIBILITY FOR ELECTION.—Clause (ii) of sec-
tion 1(g)(7)(A) (relating to election to include certain un-
earned income of child on parent’s return) is amended to
read as follows:
‘‘(i) such gross income is more than
the 
amount 
described 
in 
paragraph
(4)(A)(ii)(I) and less than 10 times the
amount so described,’’.
(b) COMPUTATION OF TAX.—Subparagraph (B) of
section 1(g)(7) (relating to income included on parent’s
return) is amended—
(1) by striking ‘‘$1,000’’ in clause (i) and in-
serting ‘‘twice the amount described in paragraph
(4)(A)(ii)(I)’’, and
(2) by amending subclause (II) of clause (ii) to
read as follows:
‘‘(II) for each such child, 15 per-
cent of the lesser of the amount de-
scribed in paragraph (4)(A)(ii)(I) or
the excess of the gross income of such
child over the amount so described,
and’’.
(c) MINIMUM TAX.—Subparagraph (B) of section
59(j)(1) is amended by striking ‘‘$1,000’’ and inserting
‘‘twice the amount in effect for the taxable year under sec-
tion 63(c)(5)(A)’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1993.
SEC. 114. SIMPLIFIED FOREIGN TAX CREDIT LIMITATION
FOR INDIVIDUALS.
(a) GENERAL RULE.—Section 904 (relating to limi-
tations on foreign tax credit) is amended by redesignating
subsection (j) as subsection (k) and by inserting after sub-
section (i) the following new subsection:
‘‘(j) SIMPLIFIED LIMITATION FOR CERTAIN INDIVID-
UALS.—
‘‘(1) IN GENERAL.—In the case of an individual
to whom this subsection applies for any taxable year,
the limitation of subsection (a) shall be the lesser
of—
‘‘(A) 25 percent of such individual’s gross
income for the taxable year from sources with-
out the United States, or
‘‘(B) the amount of the creditable foreign
taxes paid or accrued by the individual during
the taxable year (determined without regard to
subsection (c)).
No taxes paid or accrued by the individual during
such taxable year may be deemed paid or accrued in
any other taxable year under subsection (c).
‘‘(2) INDIVIDUALS TO WHOM SUBSECTION AP-
PLIES.—This subsection shall apply to an individual
for any taxable year if—
‘‘(A) the entire amount of such individual’s
gross income for the taxable year from sources
without the United States consists of qualified
passive income,
‘‘(B) the amount of the creditable foreign
taxes paid or accrued by the individual during
the taxable year does not exceed $200 ($400 in
the case of a joint return), and
‘‘(C) such individual elects to have this
subsection apply for the taxable year.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) QUALIFIED
PASSIVE
INCOME.—The
term ‘qualified passive income’ means any item
of gross income if—
‘‘(i) such item of income is passive in-
come (as defined in subsection (d)(2)(A)
without regard to clause (iii) thereof), and
‘‘(ii) such item of income is shown on
a payee statement furnished to the individ-
ual.
‘‘(B) CREDITABLE FOREIGN TAXES.—The
term ‘creditable foreign taxes’ means any taxes
for which a credit is allowable under section
901; except that such term shall not include
any tax unless such tax is shown on a payee
statement furnished to such individual.
‘‘(C) 
PAYEE
STATEMENT.—The 
term
‘payee statement’ has the meaning given to
such term by section 6724(d)(2).
‘‘(D) ESTATES
AND
TRUSTS
NOT
ELIGI-
BLE.—This subsection shall not apply to any
estate or trust.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1993.
SEC. 115. TREATMENT OF PERSONAL TRANSACTIONS BY
INDIVIDUALS UNDER FOREIGN CURRENCY
RULES.
(a) GENERAL RULE.—Subsection (e) of section 988
(relating to application to individuals) is amended to read
as follows:
‘‘(e) APPLICATION TO INDIVIDUALS.—
‘‘(1) IN GENERAL.—The preceding provisions of
this section shall not apply to any section 988 trans-
action entered into by an individual which is a per-
sonal transaction.
‘‘(2) EXCLUSION
FOR
CERTAIN
PERSONAL
TRANSACTIONS.—If—
‘‘(A) nonfunctional currency is disposed of
by an individual in any transaction, and
‘‘(B) such transaction is a personal trans-
action,
no gain shall be recognized for purposes of this sub-
title by reason of changes in exchange rates after
such currency was acquired by such individual and
before such disposition. The preceding sentence shall
not apply if the gain which would otherwise be rec-
ognized exceeds $200.
‘‘(3) PERSONAL TRANSACTIONS.—For purposes
of this subsection, the term ‘personal transaction’
means any transaction entered into by an individual,
except that such term shall not include any trans-
action to the extent that expenses properly allocable
to such transaction meet the requirements of section
162 or 212 (other than that part of section 212
dealing with expenses incurred in connection with
taxes).’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1992.
SEC. 116. EXPANDED ACCESS TO SIMPLIFIED INCOME TAX
RETURNS.
(a) GENERAL RULE.—The Secretary of the Treasury
or his delegate shall take such actions as may be appro-
priate to expand access to simplified individual income tax
returns and to otherwise simplify the individual income tax
returns, including—
(1) (if appropriate) allowing taxpayers who
itemize deductions to file their return on Form
1040A, and
(2) removing or raising the taxable income limi-
tations on taxpayers who may file Form 1040A.
(b) REPORT.—Not later than the date 1 year after
the date of the enactment of this Act, the Secretary of
the Treasury or his delegate shall submit a report to the
Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate,
a report on his actions under subsection (a), together with
such recommendations as he may deem advisable.
SEC. 117. TREATMENT 
OF 
CERTAIN 
REIMBURSED 
EX-
PENSES OF RURAL MAIL CARRIERS.
(a) IN GENERAL.—Section 162 (relating to trade or
business expenses) is amended by redesignating subsection
(o) as subsection (p) and by inserting after subsection (n)
the following new subsection:
‘‘(o) TREATMENT
OF CERTAIN REIMBURSED EX-
PENSES OF RURAL MAIL CARRIERS.—
‘‘(1) GENERAL RULE.—In the case of any em-
ployee of the United States Postal Service who per-
forms services involving the collection and delivery of
mail on a rural route and who receives qualified re-
imbursements for the expenses incurred by such em-
ployee for the use of a vehicle in performing such
services—
‘‘(A) the amount allowable as a deduction
under this chapter for the use of a vehicle in
performing such services shall be equal to the
amount of such qualified reimbursements; and
‘‘(B) such qualified reimbursements shall
be treated as paid under a reimbursement or
other expense allowance arrangement for pur-