‘‘(i) at least 50 percent (by vote and 
value) of the total outstanding shares of 
the stock of such entity are owned directly 
or indirectly by 5 or fewer entities— 
‘‘(I) which meet the requirements 
of subparagraph (C), or 
‘‘(II) which are United States 
persons the principal class of the 
shares (and any disproportionate class 
of shares) of which are primarily and 
regularly traded on an established se-
curities market in the United States, 
and 
‘‘(ii) the entity meets the require-
ments of clause (ii) of subparagraph (B). 
‘‘(E) 
ONLY
INDIRECT
OWNERSHIP 
THROUGH
QUALIFYING
INTERMEDIARIES 
COUNTED.— 
‘‘(i) IN GENERAL.—Stock in an entity 
owned by a person indirectly through 1 or 
more other persons shall not be treated as 
owned by such person in determining 
whether the person meets the requirements 
of subparagraph (B)(i) or (D)(i) unless all 
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such other persons are qualifying inter-
mediate owners. 
‘‘(ii) 
QUALIFYING
INTERMEDIATE 
OWNERS.—The 
term 
‘qualifying 
inter-
mediate owner’ means a person that is— 
‘‘(I) a qualified resident of Tai-
wan, or 
‘‘(II) a resident of any other for-
eign country (other than a foreign 
country that is a foreign country of 
concern) that has in effect a com-
prehensive convention with the United 
States for the avoidance of double tax-
ation. 
‘‘(iii) SPECIAL RULE FOR QUALIFIED 
SUBSIDIARIES.—For purposes of applying 
subparagraph (D)(i), the term ‘qualifying 
intermediate owner’ shall include any per-
son who is a United States person who 
meets such requirements with respect to 
the United States as determined by the 
Secretary to be equivalent to the require-
ments of this subsection (determined with-
out regard to paragraph (1)(B)) with re-
spect to residents of Taiwan. 
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‘‘(F) 
CERTAIN
PAYMENTS
NOT
IN-
CLUDED.—In determining whether the require-
ments of subparagraph (B)(ii) or (D)(ii) are 
met with respect to an entity, the following pay-
ments shall not be taken into account: 
‘‘(i) Arm’s-length payments by the en-
tity in the ordinary course of business for 
services or tangible property. 
‘‘(ii) In the case of a tested group, 
intra-group transactions. 
‘‘(3) DUAL RESIDENTS.— 
‘‘(A) RULES FOR DETERMINATION OF STA-
TUS.— 
‘‘(i) IN GENERAL.—An individual who 
is an applicable dual resident and who is 
described in subparagraph (B), (C), or (D) 
shall be treated as a qualified resident of 
Taiwan. 
‘‘(ii) APPLICABLE DUAL RESIDENT.— 
For purposes of this paragraph, the term 
‘applicable dual resident’ means an indi-
vidual who— 
‘‘(I) is not a United States cit-
izen, 
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‘‘(II) is a resident of the United 
States (determined without regard to 
subparagraph (E)), and 
‘‘(III) would be a qualified resi-
dent of Taiwan but for paragraph 
(1)(B). 
‘‘(B) PERMANENT
HOME.—An individual 
is described in this subparagraph if such indi-
vidual— 
‘‘(i) has a permanent home available 
to such individual in Taiwan, and 
‘‘(ii) does not have a permanent home 
available to such individual in the United 
States. 
‘‘(C) CENTER OF VITAL INTERESTS.—An 
individual is described in this subparagraph if— 
‘‘(i) such individual has a permanent 
home available to such individual in both 
Taiwan and the United States, and 
‘‘(ii) such individual’s personal and 
economic relations (center of vital inter-
ests) are closer to Taiwan than to the 
United States. 
‘‘(D) HABITUAL ABODE.—An individual is 
described in this subparagraph if— 
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‘‘(i) such individual— 
‘‘(I) does not have a permanent 
home available to such individual in 
either Taiwan or the United States, or 
‘‘(II) has a permanent home 
available to such individual in both 
Taiwan and the United States but 
such individual’s center of vital inter-
ests under subparagraph (C)(ii) can-
not be determined, and 
‘‘(ii) such individual has a habitual 
abode in Taiwan and not the United 
States. 
‘‘(E) UNITED STATES TAX TREATMENT OF 
QUALIFIED
RESIDENT
OF
TAIWAN.—Notwith-
standing section 7701, an individual who is 
treated as a qualified resident of Taiwan by 
reason of this paragraph for all or any portion 
of a taxable year shall not be treated as a resi-
dent of the United States for purposes of com-
puting such individual’s United States income 
tax liability for such taxable year or portion 
thereof. 
‘‘(4) RULES OF SPECIAL APPLICATION.— 
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‘‘(A) DIVIDENDS.—For purposes of apply-
ing this section to any dividend, paragraph 
(2)(D) shall be applied without regard to clause 
(ii) thereof. 
‘‘(B) ITEMS OF INCOME EMANATING FROM 
AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 
For purposes of this section— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding paragraphs of this sub-
section, if an entity taxed as a corporation 
in Taiwan is not a qualified resident of 
Taiwan but meets the requirements of sub-
paragraphs (A) and (B) of paragraph (1), 
any qualified item of income such entity 
derived from the United States shall be 
treated as income of a qualified resident of 
Taiwan. 
‘‘(ii) QUALIFIED ITEMS OF INCOME.— 
‘‘(I) IN
GENERAL.—The term 
‘qualified item of income’ means any 
item of income which emanates from, 
or is incidental to, the conduct of an 
active trade or business in Taiwan 
(other than operating as a holding 
company, providing overall supervision 
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or administration of a group of com-
panies, providing group financing, or 
making or managing investments (un-
less such making or managing invest-
ments is carried on by a bank, insur-
ance company, or registered securities 
dealer in the ordinary course of its 
business as such)). 
‘‘(II) SUBSTANTIAL ACTIVITY RE-
QUIREMENT.—An 
item 
of 
income 
which is derived from a trade or busi-
ness conducted in the United States 
or from a connected person shall be a 
qualified item of income only if the 
trade or business activity conducted in 
Taiwan to which the item is related is 
substantial in relation to the same or 
a complementary trade or business ac-
tivity carried on in the United States. 
For purposes of applying this sub-
clause, activities conducted by persons 
that are connected to the entity de-
scribed in clause (i) shall be deemed 
to be conducted by such entity. 
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‘‘(iii) 
EXCEPTION.—This 
subpara-
graph shall not apply to any item of in-
come derived by an entity if at least 50 
percent (by vote or value) of such entity is 
owned (directly or indirectly) or controlled 
by residents of a foreign country of con-
cern. 
‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) UNITED STATES PERMANENT ESTABLISH-
MENT.— 
‘‘(A) IN
GENERAL.—The term ‘United 
States permanent establishment’ means, with 
respect to a qualified resident of Taiwan, a per-
manent establishment of such resident which is 
within the United States. 
‘‘(B) SPECIAL RULE.—The determination 
of whether there is a permanent establishment 
of a qualified resident of Taiwan within the 
United States shall be made without regard to 
whether an entity which is taxed as a corpora-
tion in Taiwan and which is a qualified resident 
of Taiwan controls or is controlled by— 
‘‘(i) a domestic corporation, or 
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‘‘(ii) any other person that carries on 
business in the United States (whether 
through a permanent establishment or oth-
erwise). 
‘‘(2) PERMANENT ESTABLISHMENT.— 
‘‘(A) IN GENERAL.—The term ‘permanent 
establishment’ means a fixed place of business 
through which a trade or business is wholly or 
partly carried on. Such term shall include— 
‘‘(i) a place of management, 
‘‘(ii) a branch, 
‘‘(iii) an office, 
‘‘(iv) a factory, 
‘‘(v) a workshop, and 
‘‘(vi) a mine, an oil or gas well, a 
quarry, or any other place of extraction of 
natural resources. 
‘‘(B) SPECIAL RULES FOR CERTAIN TEM-
PORARY PROJECTS.— 
‘‘(i) IN GENERAL.—A building site or 
construction or installation project, or an 
installation or drilling rig or ship used for 
the exploration or exploitation of the sea 
bed and its subsoil and their natural re-
sources, constitutes a permanent establish-
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ment only if it lasts, or the activities of the 
rig or ship lasts, for more than 12 months. 
‘‘(ii) DETERMINATION
OF
12-MONTH 
PERIOD.—For purposes of clause (i), the 
period over which a building site or con-
struction or installation project of a person 
lasts shall include any period of more than 
30 days during which such person does not 
carry on activities at such building site or 
construction or installation project but 
connected activities are carried on at such 
building site or construction or installation 
project by one or more connected persons. 
‘‘(C) HABITUAL EXERCISE OF CONTRACT 
AUTHORITY TREATED AS PERMANENT ESTAB-
LISHMENT.—Notwithstanding 
subparagraphs 
(A) and (B), where a person (other than an 
agent of an independent status to whom sub-
paragraph (D)(ii) applies) is acting on behalf of 
a trade or business of a qualified resident of 
Taiwan and has and habitually exercises an au-
thority to conclude contracts that are binding 
on the trade or business, that trade or business 
shall be deemed to have a permanent establish-
ment in the country in which such authority is 
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exercised in respect of any activities that the 
person undertakes for the trade or business, un-
less the activities of such person are limited to 
those described in subparagraph (D)(i) that, if 
exercised through a fixed place of business, 
would not make this fixed place of business a 
permanent establishment under the provisions 
of that subparagraph. 
‘‘(D) EXCLUSIONS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the term ‘per-
manent establishment’ shall not include— 
‘‘(I) the use of facilities solely for 
the purpose of storage, display, or de-
livery of goods or merchandise belong-
ing to the trade or business, 
‘‘(II) the maintenance of a stock 
of goods or merchandise belonging to 
the trade or business solely for the 
purpose of storage, display, or deliv-
ery, 
‘‘(III) the maintenance of a stock 
of goods or merchandise belonging to 
the trade or business solely for the 
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shares) in each person. In any case, a person shall 
be connected to another if, based on all the relevant 
facts and circumstances, one has control of the other 
or both are under the control of the same person or 
persons. 
‘‘(5) FOREIGN
COUNTRY
OF
CONCERN.—The 
term ‘foreign country of concern’ has the meaning 
given such term under paragraph (7) of section 
9901 of the William M. (Mac) Thornberry National 
Defense Authorization Act for Fiscal Year 2021 (15 
U.S.C. 4651(7)), as added by section 103(a)(4) of 
the CHIPS Act of 2022). 
‘‘(6) PARTNERSHIPS; BENEFICIARIES
OF
ES-
TATES AND TRUSTS.—For purposes of this section— 
‘‘(A) a qualified resident of Taiwan which 
is a partner of a partnership which carries on 
a trade or business within the United States 
through a United States permanent establish-
ment shall be treated as carrying on such trade 
or business through such permanent establish-
ment, and 
‘‘(B) a qualified resident of Taiwan which 
is a beneficiary of an estate or trust which car-
ries on a trade or business within the United 
States through a United States permanent es-
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tablishment shall be treated as carrying on such 
trade or business through such permanent es-
tablishment. 
‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY-
MENTS THROUGH HYBRID ENTITIES.—For purposes 
of this section, rules similar to the rules of section 
894(c) shall apply. 
‘‘(e) APPLICATION.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to any period unless the Secretary has determined 
that Taiwan has provided benefits to United States 
persons for such period that are reciprocal to the 
benefits provided to qualified residents of Taiwan 
under this section. 
‘‘(2) PROVISION OF RECIPROCITY.—The Presi-
dent or his designee is authorized to exchange let-
ters, enter into an agreement, or take other nec-
essary and appropriate steps relative to Taiwan for 
the reciprocal provision of the benefits described in 
this section. 
‘‘(f) REGULATIONS OR OTHER GUIDANCE.— 
‘‘(1) IN GENERAL.—The Secretary shall issue 
such regulations or other guidance as may be nec-
essary or appropriate to carry out the provisions of 
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this section, including such regulations or guidance 
for— 
‘‘(A) determining— 
‘‘(i) what constitutes a United States 
permanent establishment of a qualified 
resident of Taiwan, and 
‘‘(ii) income that is effectively con-
nected with such a permanent establish-
ment, 
‘‘(B) preventing the abuse of the provisions 
of this section by persons who are not (or who 
should not be treated as) qualified residents of 
Taiwan, 
‘‘(C) requirements for record keeping and 
reporting, 
‘‘(D) rules to assist withholding agents or 
employers in determining whether a foreign per-
son is a qualified resident of Taiwan for pur-
poses of determining whether withholding or re-
porting is required for a payment (and, if with-
holding is required, whether it should be applied 
at a reduced rate), 
‘‘(E) 
the 
application 
of 
subsection 
(a)(1)(D)(i) to stock held by predecessor own-
ers, 
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‘‘(F) determining what amounts are to be 
treated as qualified wages for purposes of sub-
section (a)(2), 
‘‘(G) determining the amounts to which 
subsection (a)(3) applies, 
‘‘(H) defining established securities market 
for purposes of subsection (c), 
‘‘(I) the application of the rules of sub-
section (c)(4)(B), 
‘‘(J) the application of subsection (d)(6) 
and section 1446, 
‘‘(K) determining ownership interests held 
by residents of a foreign country of concern, 
and 
‘‘(L) determining the starting and ending 
dates for periods with respect to the application 
of this section under subsection (e), which may 
be separate dates for taxes withheld at the 
source and other taxes. 
‘‘(2) REGULATIONS TO BE CONSISTENT WITH 
MODEL TREATY.—Any regulations or other guidance 
issued under this section shall, to the extent prac-
tical, be consistent with the provisions of the United 
States model income tax convention dated February 
7, 2016.’’. 
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(b) CONFORMING AMENDMENT
TO WITHHOLDING 
TAX.—Subchapter A of chapter 3 is amended by adding 
at the end the following new section: 
‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 
TAIWAN. 
‘‘For reduced rates of withholding for certain resi-
dents of Taiwan, see section 894A.’’. 
(c) CLERICAL AMENDMENTS.— 
(1) The table of sections for subpart D of part 
II of subchapter N of chapter 1 is amended by in-
serting after the item relating to section 894 the fol-
lowing new item: 
‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 
(2) The table of sections for subchapter A of 
chapter 3 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 
Subtitle B—United States-Taiwan 
Tax Agreement Authorization Act 
SEC. 311. SHORT TITLE. 
This subtitle may be cited as the ‘‘United States-Tai-
wan Tax Agreement Authorization Act’’. 
SEC. 312. DEFINITIONS. 
In this subtitle: 
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(1) 
AGREEMENT.—The 
term 
‘‘Agreement’’ 
means the tax agreement authorized by section 
313(a). 
(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Foreign Relations 
and the Committee on Finance of the Senate; 
and 
(B) the Committee on Ways and Means of 
the House of Representatives. 
(3) APPROVAL LEGISLATION.—The term ‘‘ap-
proval legislation’’ means legislation that approves 
the Agreement. 
(4) IMPLEMENTING
LEGISLATION.—The term 
‘‘implementing legislation’’ means legislation that 
makes any changes to the Internal Revenue Code of 
1986 necessary to implement the Agreement. 
SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER 
INTO AGREEMENT. 
(a) IN GENERAL.—Subsequent to a determination 
under section 894A(e)(1) of the Internal Revenue Code 
of 1986 (as added by the United States-Taiwan Expedited 
Double-Tax Relief Act), the President is authorized to ne-
gotiate and enter into a tax agreement relative to Taiwan. 
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(b) ELEMENTS OF AGREEMENT.— 
(1) CONFORMITY WITH BILATERAL INCOME TAX 
CONVENTIONS.—The President shall ensure that— 
(A) any provisions included in the Agree-
ment conform with provisions customarily con-
tained in United States bilateral income tax 
conventions, as exemplified by the 2016 United 
States Model Income Tax Convention; and 
(B) the Agreement does not include ele-
ments outside the scope of the 2016 United 
States Model Income Tax Convention. 
(2) INCORPORATION OF TAX AGREEMENTS AND 
LAWS.—Notwithstanding paragraph (1), the Agree-
ment may incorporate and restate provisions of any 
agreement, or existing United States law, addressing 
double taxation for residents of the United States 
and Taiwan. 
(3) AUTHORITY.—The Agreement shall include 
the following statement: ‘‘The Agreement is entered 
into pursuant to the United States-Taiwan Tax 
Agreement Authorization Act.’’ 
(4) ENTRY INTO FORCE.—The Agreement shall 
include a provision conditioning entry into force 
upon— 
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(A) enactment of approval legislation and 
implementing legislation pursuant to section 
317; and 
(B) confirmation by the Secretary of the 
Treasury that the relevant authority in Taiwan 
has approved and taken appropriate steps re-
quired to implement the Agreement. 
SEC. 314. CONSULTATIONS WITH CONGRESS. 
(a) NOTIFICATION UPON COMMENCEMENT OF NEGO-
TIATIONS.—The President shall provide written notifica-
tion to the appropriate congressional committees of the 
commencement of negotiations between the United States 
and Taiwan on the Agreement at least 15 calendar days 
before commencing such negotiations. 
(b) CONSULTATIONS DURING NEGOTIATIONS.— 
(1) BRIEFINGS.—Not later than 90 days after 
commencement of negotiations with respect to the 
Agreement, and every 180 days thereafter until the 
President enters into the Agreement, the President 
shall provide a briefing to the appropriate congres-
sional committees on the status of the negotiations, 
including a description of elements under negotia-
tion. 
(2) MEETINGS AND OTHER CONSULTATIONS.— 
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(A) IN GENERAL.—In the course of nego-
tiations with respect to the Agreement, the Sec-
retary of the Treasury, in coordination with the 
Secretary of State, shall— 
(i) meet, upon request, with the chair-
man or ranking member of any of the ap-
propriate congressional committees regard-
ing negotiating objectives and the status of 
negotiations in progress; and 
(ii) consult closely and on a timely 
basis with, and keep fully apprised of the 
negotiations, the appropriate congressional 
committees. 
(B) ELEMENTS OF CONSULTATIONS.—The 
consultations described in subparagraph (A) 
shall include consultations with respect to— 
(i) the nature of the contemplated 
Agreement; 
(ii) how and to what extent the con-
templated Agreement is consistent with the 
elements set forth in section 313(b); and 
(iii) the implementation of the con-
templated Agreement, including— 
(I) the general effect of the con-
templated Agreement on existing laws; 
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(II) proposed changes to any ex-
isting laws to implement the con-
templated Agreement; and 
(III) proposed administrative ac-
tions to implement the contemplated 
Agreement. 
SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREE-
MENT. 
(a) IN GENERAL.—The Agreement may not enter 
into force unless— 
(1) the President, at least 60 days before the 
day on which the President enters into the Agree-
ment, publishes the text of the contemplated Agree-
ment on a publicly available website of the Depart-
ment of the Treasury; and 
(2) there is enacted into law, with respect to 
the Agreement, approval legislation and imple-
menting legislation pursuant to section 317. 
(b) ENTRY INTO FORCE.—The President may pro-
vide for the Agreement to enter into force upon— 
(1) enactment of approval legislation and imple-
menting legislation pursuant to section 317; and 
(2) confirmation by the Secretary of the Treas-
ury that the relevant authority in Taiwan has ap-
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proved and taken appropriate steps required to im-
plement the Agreement. 
SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND 
IMPLEMENTATION POLICY. 
(a) SUBMISSION OF AGREEMENT.—Not later than 
270 days after the President enters into the Agreement, 
the President or the President’s designee shall submit to 
Congress— 
(1) the final text of the Agreement; and 
(2) a technical explanation of the Agreement. 
(b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 
later than 270 days after the President enters into the 
Agreement, the Secretary of the Treasury shall submit to 
Congress— 
(1) a description of those changes to existing 
laws that the President considers would be required 
in order to ensure that the United States acts in a 
manner consistent with the Agreement; and 
(2) a statement of anticipated administrative 
action proposed to implement the Agreement. 
SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION 
AND IMPLEMENTING LEGISLATION. 
(a) IN GENERAL.—The approval legislation with re-
spect to the Agreement shall include the following: ‘‘Con-
gress approves the Agreement submitted to Congress pur-
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suant to section 316 of the United States-Taiwan Tax 
Agreement Authorization Act on llll.’’, with the 
blank space being filled with the appropriate date. 
(b) APPROVAL LEGISLATION COMMITTEE REFER-
RAL.—The approval legislation shall— 
(1) in the Senate, be referred to the Committee 
on Foreign Relations; and 
(2) in the House of Representaives, be referred 
to the Committee on Ways and Means. 
(c) IMPLEMENTING LEGISLATION COMMITTEE RE-
FERRAL.—The implementing legislation shall— 
(1) in the Senate, be referred to the Committee 
on Finance; and 
(2) in the House of Representatives, be referred 
to the Committee on Ways and Means. 
SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL 
REVENUE CODE OF 1986. 
(a) INTERNAL REVENUE CODE OF 1986 TO CON-
TROL.—No provision of the Agreement or approval legisla-
tion, nor the application of any such provision to any per-
son or circumstance, which is inconsistent with any provi-
sion of the Internal Revenue Code of 1986, shall have ef-
fect. 
(b) CONSTRUCTION.—Nothing in this subtitle shall 
be construed— 
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(1) to amend or modify any law of the United 
States; or 
(2) to limit any authority conferred under any 
law of the United States, 
unless specifically provided for in this subtitle. 
SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREE-
MENTS RELATIVE TO TAIWAN. 
(a) IN GENERAL.—Subsequent to the enactment of 
approval legislation and implementing legislation pursuant 
to section 317— 
(1) the term ‘‘tax agreement’’ in section 313(a) 
shall be treated as including any tax agreement rel-
ative to Taiwan which supplements or supersedes 
the Agreement to which such approval legislation 
and implementing legislation relates, and 
(2) the term ‘‘Agreement’’ shall be treated as 
including such tax agreement. 
(b) 
REQUIREMENTS, 
ETC., 
TO
APPLY
SEPA-
RATELY.—The provisions of this subtitle (including sec-
tion 314) shall be applied separately with respect to each 
tax agreement referred to in subsection (a). 
SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAX-
ATION MATTERS WITH RESPECT TO TAIWAN. 
(a) FINDINGS.—Congress makes the following find-
ings: 
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(1) The United States addresses issues with re-
spect to double taxation with foreign countries by 
entering into bilateral income tax conventions 
(known as tax treaties) with such countries, subject 
to the advice and consent of the Senate to ratifica-
tion pursuant to article II of the Constitution. 
(2) The United States has entered into more 
than sixty such tax treaties, which facilitate eco-
nomic activity, strengthen bilateral cooperation, and 
benefit United States workers, businesses, and other 
United States taxpayers. 
(3) Due to Taiwan’s unique status, the United 
States is unable to enter into an article II tax treaty 
with Taiwan, necessitating an agreement to address 
issues with respect to double taxation. 
(b) STATEMENT OF POLICY.—It is the policy of the 
United States to— 
(1) provide for additional bilateral tax relief 
with respect to Taiwan, beyond that provided for in 
section 894A of the Internal Revenue Code of 1986 
(as added by the United States-Taiwan Expedited 
Double-Tax Relief Act), only after entry into force 
of an Agreement, as provided for in section 315, and 
only in a manner consistent with such Agreement; 
and 
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(2) continue to provide for bilateral tax relief 
with sovereign states to address double taxation and 
other related matters through entering into bilateral 
income tax conventions, subject to the Senate’s ad-
vice and consent to ratification pursuant to article II 
of the Constitution. 
TITLE IV—ASSISTANCE FOR DIS-
ASTER-IMPACTED 
COMMU-
NITIES 
SEC. 401. SHORT TITLE. 
This title may be cited as the ‘‘Federal Disaster Tax 
Relief Act of 2024’’. 
SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CER-
TAIN DISASTER-RELATED PERSONAL CAS-
UALTY LOSSES. 
For purposes of applying section 304(b) of the Tax-
payer Certainty and Disaster Tax Relief Act of 2020, sec-
tion 301 of such Act shall be applied by substituting ‘‘the 
Federal Disaster Tax Relief Act of 2024’’ for ‘‘this Act’’ 
each place it appears. 
SEC. 403. EXCLUSION FROM GROSS INCOME FOR COM-
PENSATION FOR LOSSES OR DAMAGES RE-
SULTING FROM CERTAIN WILDFIRES. 
(a) IN GENERAL.—For purposes of the Internal Rev-
enue Code of 1986, gross income shall not include any 
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amount received by an individual as a qualified wildfire 
relief payment. 
(b) QUALIFIED WILDFIRE RELIEF PAYMENT.—For 
purposes of this section— 
(1) IN GENERAL.—The term ‘‘qualified wildfire 
relief payment’’ means any amount received by or on 
behalf of an individual as compensation for losses, 
expenses, or damages (including compensation for 
additional living expenses, lost wages (other than 
compensation for lost wages paid by the employer 
which would have otherwise paid such wages), per-
sonal injury, death, or emotional distress) incurred 
as a result of a qualified wildfire disaster, but only 
to the extent the losses, expenses, or damages com-
pensated by such payment are not compensated for 
by insurance or otherwise. 
(2) QUALIFIED
WILDFIRE
DISASTER.—The 
term ‘‘qualified wildfire disaster’’ means any feder-
ally declared disaster (as defined in section 
165(i)(5)(A) of the Internal Revenue Code of 1986) 
declared, after December 31, 2014, as a result of 
any forest or range fire. 
(c) 
DENIAL
OF
DOUBLE
BENEFIT.—Notwith-
standing any other provision of the Internal Revenue Code 
of 1986— 
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(1) no deduction or credit shall be allowed (to 
the person for whose benefit a qualified wildfire re-
lief payment is made) for, or by reason of, any ex-
penditure to the extent of the amount excluded 
under this section with respect to such expenditure, 
and 
(2) no increase in the basis or adjusted basis of 
any property shall result from any amount excluded 
under this subsection with respect to such property. 
(d) LIMITATION
ON APPLICATION.—This section 
shall only apply to qualified wildfire relief payments re-
ceived by the individual during taxable years beginning 
after December 31, 2019, and before January 1, 2026. 
SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS. 
(a) DISASTER RELIEF PAYMENTS TO VICTIMS OF 
EAST PALESTINE TRAIN DERAILMENT.—East Palestine 
train derailment payments shall be treated as qualified 
disaster relief payments for purposes of section 139(b) of 
the Internal Revenue Code of 1986. 
(b) EAST PALESTINE TRAIN DERAILMENT PAY-
MENTS.—For purposes of this section, the term ‘‘East 
Palestine train derailment payment’’ means any amount 
received by or on behalf of an individual as compensation 
for loss, damages, expenses, loss in real property value, 
closing costs with respect to real property (including real-
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tor commissions), or inconvenience (including access to 
real property) resulting from the East Palestine train de-
railment if such amount was provided by— 
(1) a Federal, State, or local government agen-
cy, 
(2) Norfolk Southern Railway, or 
(3) any subsidiary, insurer, or agent of Norfolk 
Southern Railway or any related person. 
(c) TRAIN DERAILMENT.—For purposes of this sec-
tion, the term ‘‘East Palestine train derailment’’ means 
the derailment of a train in East Palestine, Ohio, on Feb-
ruary 3, 2023. 
(d) EFFECTIVE DATE.—This section shall apply to 
amounts received on or after February 3, 2023. 
TITLE V—MORE AFFORDABLE 
HOUSING 
SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR 
LOW-INCOME HOUSING CREDIT. 
(a) IN GENERAL.—Section 42(h)(3)(I) is amended— 
(1) by striking ‘‘and 2021,’’ and inserting 
‘‘2021, 2023, 2024, and 2025,’’, and 
(2) by striking ‘‘2018, 2019, 2020, AND 2021’’ in 
the heading and inserting ‘‘CERTAIN
CALENDAR 
YEARS’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years after 2022. 
SEC. 502. TAX-EXEMPT BOND FINANCING REQUIREMENT. 
(a) IN GENERAL.—Section 42(h)(4) is amended by 
striking subparagraph (B) and inserting the following: 
‘‘(B) SPECIAL
RULE
WHERE
MINIMUM 
PERCENT
OF
BUILDINGS
IS
FINANCED
WITH 
TAX-EXEMPT
BONDS
SUBJECT
TO
VOLUME 
CAP.—For purposes of subparagraph (A), para-
graph (1) shall not apply to any portion of the 
credit allowable under subsection (a) with re-
spect to a building if— 
‘‘(i) 50 percent or more of the aggre-
gate basis of such building and the land on 
which the building is located is financed by 
1 or more obligations described in subpara-
graph (A), or 
‘‘(ii)(I) 30 percent or more of the ag-
gregate basis of such building and the land 
on which the building is located is financed 
by 1 or more qualified obligations, and 
‘‘(II) 1 or more of such qualified obli-
gations— 
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‘‘(aa) are part of an issue the 
issue date of which is after December 
31, 2023, and 
‘‘(bb) provide the financing for 
not less than 5 percent of the aggre-
gate basis of such building and the 
land on which the building is located. 
‘‘(C) QUALIFIED
OBLIGATION.—For pur-
poses of subparagraph (B)(ii), the term ‘quali-
fied obligation’ means an obligation which is de-
scribed in subparagraph (A) and which is part 
of an issue the issue date of which is before 
January 1, 2026.’’. 
(b) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendment made by 
this section shall apply to buildings placed in service 
in taxable years beginning after December 31, 2023. 
(2) REHABILITATION EXPENDITURES TREATED 
AS SEPARATE NEW BUILDING.—In the case of any 
building with respect to which any expenditures are 
treated as a separate new building under section 
42(e) of the Internal Revenue Code of 1986, for 
purposes of paragraph (1), both the existing building 
and the separate new building shall be treated as 
having been placed in service on the date such ex-
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penditures are treated as placed in service under 
section 42(e)(4) of such Code. 
TITLE VI—TAX ADMINISTRATION 
AND ELIMINATING FRAUD 
SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING IN-
FORMATION REPORTING WITH RESPECT TO 
CERTAIN PAYEES. 
(a) IN GENERAL.—Sections 6041(a) is amended by 
striking ‘‘$600’’ and inserting ‘‘$1,000’’. 
(b) INFLATION
ADJUSTMENT.—Section 6041 is 
amended by adding at the end the following new sub-
section: 
‘‘(h) INFLATION ADJUSTMENT.—In the case of any 
calendar year after 2024, the dollar amount in subsection 
(a) shall be increased by an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for such calendar year, deter-
mined by substituting ‘calendar year 2023’ for ‘cal-
endar year 2016’ in subparagraph (A)(ii) thereof. 
If any increase under the preceding sentence is not a mul-
tiple of $100, such increase shall be rounded to the nearest 
multiple of $100.’’. 
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(c) APPLICATION TO REPORTING ON REMUNERATION 
FOR SERVICES AND DIRECT SALES.—Section 6041A is 
amended— 
(1) in subsection (a)(2), by striking ‘‘is $600 or 
more’’ and inserting ‘‘equals or exceeds the dollar 
amount in effect for such calendar year under sec-
tion 6041(a)’’, and 
(2) in subsection (b)(1)(B), by striking ‘‘is 
$5,000 or more’’ and inserting ‘‘equals or exceeds 
the dollar amount in effect for such calendar year 
under section 6041(a)’’. 
(d) APPLICATION TO BACKUP WITHHOLDING.—Sec-
tion 3406(b)(6) is amended— 
(1) by striking ‘‘$600’’ in subparagraph (A) 
and inserting ‘‘the dollar amount in effect for such 
calendar year under section 6041(a)’’, and 
(2) by striking ‘‘ONLY WHERE AGGREGATE FOR 
CALENDAR YEAR IS $600 OR MORE’’ in the heading 
and inserting ‘‘ONLY IF IN EXCESS OF THRESHOLD’’. 
(e) CONFORMING AMENDMENTS.— 
(1) The heading of section 6041(a) is amended 
by striking ‘‘OF $600 OR MORE’’ and inserting ‘‘EX-
CEEDING THRESHOLD’’. 
(2) Section 6041(a) is amended by striking 
‘‘taxable year’’ and inserting ‘‘calendar year’’. 
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(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to payments made 
after December 31, 2023. 
SEC. 602. ENFORCEMENT PROVISIONS WITH RESPECT TO 
COVID-RELATED 
EMPLOYEE 
RETENTION 
CREDITS. 
(a) INCREASE IN ASSESSABLE PENALTY ON COVID– 
ERTC PROMOTERS FOR AIDING AND ABETTING UNDER-
STATEMENTS OF TAX LIABILITY.—If any COVID–ERTC 
promoter is subject to penalty under section 6701(a) of 
the Internal Revenue Code of 1986 with respect to any 
COVID–ERTC document, notwithstanding paragraphs 
(1) and (2) of section 6701(b) of such Code, the amount 
of the penalty imposed under such section 6701(a) shall 
be the greater of— 
(1) $200,000 ($10,000, in the case of a natural 
person), or 
(2) 75 percent of the gross income derived (or 
to be derived) by such promoter with respect to the 
aid, assistance, or advice referred to in section 
6701(a)(1) of such Code with respect to such docu-
ment. 
(b) FAILURE TO COMPLY WITH DUE DILIGENCE RE-
QUIREMENTS TREATED AS KNOWLEDGE FOR PURPOSES 
OF ASSESSABLE PENALTY FOR AIDING AND ABETTING 
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UNDERSTATEMENT OF TAX LIABILITY.—In the case of 
any COVID–ERTC promoter, the knowledge requirement 
of section 6701(a)(3) of the Internal Revenue Code of 
1986 shall be treated as satisfied with respect to any 
COVID–ERTC document with respect to which such pro-
moter provided aid, assistance, or advice, if such promoter 
fails to comply with the due diligence requirements re-
ferred to in subsection (c)(1). 
(c) ASSESSABLE PENALTY FOR FAILURE TO COMPLY 
WITH DUE DILIGENCE REQUIREMENTS.— 
(1) IN
GENERAL.—Any COVID–ERTC pro-
moter which provides aid, assistance, or advice with 
respect to any COVID–ERTC document and which 
fails to comply with due diligence requirements im-
posed by the Secretary with respect to determining 
eligibility for, or the amount of, any COVID-related 
employee retention tax credit, shall pay a penalty of 
$1,000 for each such failure. 
(2) DUE DILIGENCE REQUIREMENTS.—Except 
as otherwise provided by the Secretary, the due dili-
gence requirements referred to in paragraph (1) 
shall be similar to the due diligence requirements 
imposed under section 6695(g). 
(3) RESTRICTION
TO
DOCUMENTS
USED
IN 
CONNECTION WITH RETURNS OR CLAIMS FOR RE-
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FUND.—Paragraph (1) shall not apply with respect 
to any COVID–ERTC document unless such docu-
ment constitutes, or relates to, a return or claim for 
refund. 
(4) TREATMENT
AS
ASSESSABLE
PENALTY, 
ETC.—For purposes of the Internal Revenue Code of 
1986, the penalty imposed under paragraph (1) shall 
be treated in the same manner as a penalty imposed 
under section 6695(g). 
(5) SECRETARY.—For purposes of this sub-
section, the term ‘‘Secretary’’ means the Secretary 
of the Treasury or the Secretary’s delegate. 
(d) ASSESSABLE PENALTIES FOR FAILURE TO DIS-
CLOSE INFORMATION, MAINTAIN CLIENT LISTS, ETC.— 
For purposes of sections 6111, 6112, 6707 and 6708 of 
the Internal Revenue Code of 1986— 
(1) any COVID-Related employee retention tax 
credit (whether or not the taxpayer claims such 
COVID-Related employee retention tax credit) shall 
be treated as a listed transaction (and as a report-
able transaction) with respect to any COVID–ERTC 
promoter if such promoter provides any aid, assist-
ance, or advice with respect to any COVID–ERTC 
document relating to such COVID-related employee 
retention tax credit, and 
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(2) such COVID–ERTC promoter shall be 
treated as a material advisor with respect to such 
transaction. 
(e) COVID–ERTC PROMOTER.—For purposes of 
this section— 
(1) IN GENERAL.—The term ‘‘COVID–ERTC 
promoter’’ means, with respect to any COVID– 
ERTC document, any person which provides aid, as-
sistance, or advice with respect to such document 
if— 
(A) such person charges or receives a fee 
for such aid, assistance, or advice which is 
based on the amount of the refund or credit 
with respect to such document, or 
(B) with respect to such person’s taxable 
year in which such person provided such assist-
ance or the preceding taxable year— 
(i) the aggregate gross receipts of 
such person for aid, assistance, and advice 
with respect to all COVID–ERTC docu-
ments exceeds 50 percent of the gross re-
ceipts of such person for such taxable year, 
or 
(ii) both— 
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(I) such aggregate gross receipts 
exceeds 20 percent of the gross re-
ceipts of such person for such taxable 
year, and 
(II) the aggregate gross receipts 
of such person for aid, assistance, and 
advice with respect to all COVID– 
ERTC documents (determined after 
application of paragraph (3)) exceeds 
$500,000. 
(2) EXCEPTION FOR CERTIFIED PROFESSIONAL 
EMPLOYER
ORGANIZATIONS.—The term ‘‘COVID– 
ERTC promoter’’ shall not include a certified profes-
sional employer organization (as defined in section 
7705). 
(3) AGGREGATION
RULE.—For purposes of 
paragraph (1)(B)(ii)(II), all persons treated as a 
single employer under subsection (a) or (b) of sec-
tion 52 of the Internal Revenue Code of 1986, or 
subsection (m) or (o) of section 414 of such Code, 
shall be treated as 1 person. 
(4) SHORT TAXABLE YEARS.—In the case of 
any taxable year of less than 12 months, paragraph 
(1) shall be applied with respect to the calendar year 
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in which such taxable year begins (in addition to ap-
plying to such taxable year). 
(f) COVID–ERTC DOCUMENT.—For purposes of 
this section, the term ‘‘COVID–ERTC document’’ means 
any return, affidavit, claim, or other document related to 
any COVID-related employee retention tax credit, includ-
ing any document related to eligibility for, or the calcula-
tion or determination of any amount directly related to 
any COVID-related employee retention tax credit. 
(g) COVID-RELATED EMPLOYEE RETENTION TAX 
CREDIT.—For purposes of this section, the term 
‘‘COVID-related employee retention tax credit’’ means— 
(1) any credit, or advance payment, under sec-
tion 3134 of the Internal Revenue Code of 1986, 
and 
(2) any credit, or advance payment, under sec-
tion 2301 of the CARES Act. 
(h) LIMITATION
ON
CREDIT
AND
REFUND
OF 
COVID-RELATED EMPLOYEE RETENTION TAX CRED-
ITS.—Notwithstanding section 6511 of the Internal Rev-
enue Code of 1986 or any other provision of law, no credit 
or refund of any COVID-related employee retention tax 
credit shall be allowed or made after January 31, 2024, 
unless a claim for such credit or refund is filed by the 
taxpayer on or before such date. 
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(i) AMENDMENTS TO EXTEND LIMITATION ON AS-
SESSMENT.— 
(1) IN GENERAL.—Section 3134(l) of the Inter-
nal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(l) EXTENSION OF LIMITATION ON ASSESSMENT.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
6501, the limitation on the time period for the as-
sessment of any amount attributable to a credit 
claimed under this section shall not expire before the 
date that is 6 years after the latest of— 
‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2), or 
‘‘(C) the date on which the claim for credit 
or refund with respect to such credit is made. 
‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC-
COUNT
IN
DETERMINING
IMPROPERLY
CLAIMED 
CREDIT.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 6511, in the case of an assessment attrib-
utable to a credit claimed under this section, 
the limitation on the time period for credit or 
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refund of any amount attributable to a deduc-
tion for improperly claimed ERTC wages shall 
not expire before the time period for such as-
sessment expires under paragraph (1). 
‘‘(B) 
IMPROPERLY
CLAIMED
ERTC 
WAGES.—For purposes of this paragraph, the 
term ‘improperly claimed ERTC wages’ means, 
with respect to an assessment attributable to a 
credit claimed under this section, the wages 
with respect to which a deduction would not 
have been allowed if the portion of the credit to 
which such assessment relates had been prop-
erly claimed.’’. 
(2) APPLICATION TO CARES ACT CREDIT.—Sec-
tion 2301 of the CARES Act is amended by adding 
at the end the following new subsection: 
‘‘(o) EXTENSION OF LIMITATION ON ASSESSMENT.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
6501 of the Internal Revenue Code of 1986, the lim-
itation on the time period for the assessment of any 
amount attributable to a credit claimed under this 
section shall not expire before the date that is 6 
years after the latest of— 
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‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2) of 
such Code, or 
‘‘(C) the date on which the claim for credit 
or refund with respect to such credit is made. 
‘‘(2) DEDUCTION FOR WAGES TAKEN INTO AC-
COUNT
IN
DETERMINING
IMPROPERLY
CLAIMED 
CREDIT.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 6511 of such Code, in the case of an as-
sessment attributable to a credit claimed under 
this section, the limitation on the time period 
for credit or refund of any amount attributable 
to a deduction for improperly claimed ERTC 
wages shall not expire before the time period 
for such assessment expires under paragraph 
(1). 
‘‘(B) 
IMPROPERLY
CLAIMED
ERTC 
WAGES.—For purposes of this paragraph, the 
term ‘improperly claimed ERTC wages’ means, 
with respect to an assessment attributable to a 
credit claimed under this section, the wages 
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