I 
116TH CONGRESS 
2D SESSION 
H. R. 8606 
To defer the tax of certain sales of employer stock and reduce certain 
retirement-related excise taxes, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 16, 2020 
Mr. KIND (for himself, Mr. KELLY of Pennsylvania, and Mr. SMITH of Mis-
souri) introduced the following bill; which was referred to the Committee 
on Ways and Means, and in addition to the Committee on Education and 
Labor, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To defer the tax of certain sales of employer stock and 
reduce certain retirement-related excise taxes, 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. DEFERRAL OF TAX FOR CERTAIN SALES OF EM-
PLOYER STOCK TO EMPLOYEE STOCK OWN-
ERSHIP PLAN SPONSORED BY S CORPORA-
TION. 
(a) IN GENERAL.—Section 1042(c)(1)(A) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘do-
VerDate Sep 11 2014 
01:39 Nov 05, 2020
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H8606.IH
H8606
pamtmann on DSKBC07HB2PROD with BILLS
mestic C corporation’’ and inserting ‘‘domestic corpora-
tion’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
SEC. 2. REDUCTION IN EXCISE TAX ON CERTAIN ACCUMU-
LATIONS IN QUALIFIED RETIREMENT PLANS. 
(a) IN GENERAL.—Subsection (a) of section 4974 of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘50 percent’’ and inserting ‘‘25 percent’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 3. REDUCTION IN EXCISE TAX ON FAILURES TO TAKE 
REQUIRED MINIMUM DISTRIBUTIONS. 
(a) IN GENERAL.—Section 4974 of the Internal Rev-
enue Code of 1986, as amended by section 2 of this Act, 
is further amended by adding at the end the following new 
subsection: 
‘‘(e) REDUCTION OF TAX IN CERTAIN CASES.— 
‘‘(1) REDUCTION.—In the case of a taxpayer 
who— 
‘‘(A) corrects, during the correction win-
dow, a shortfall of distributions from an indi-
VerDate Sep 11 2014 
01:39 Nov 05, 2020
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H8606.IH
H8606
pamtmann on DSKBC07HB2PROD with BILLS
vidual retirement plan which resulted in imposi-
tion of a tax under subsection (a), and 
‘‘(B) submits a return, during the correc-
tion window, reflecting such tax (as modified by 
this subsection), 
the first sentence of subsection (a) shall be applied 
by substituting ‘10 percent’ for ‘25 percent’. 
‘‘(2) CORRECTION WINDOW.—For purposes of 
this subsection, the term ‘correction window’ means 
the period of time beginning on the date on which 
the tax under subsection (a) is imposed with respect 
to a shortfall of distributions from an individual re-
tirement plan, and ending on the earlier of— 
‘‘(A) the date on which the Secretary initi-
ates an audit, or otherwise demands payment, 
with respect to the shortfall of distributions, or 
‘‘(B) the last day of the second taxable 
year that begins after the end of the taxable 
year in which the tax under subsection (a) is 
imposed.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
VerDate Sep 11 2014 
01:39 Nov 05, 2020
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H8606.IH
H8606
pamtmann on DSKBC07HB2PROD with BILLS
SECTION 4. MULTIPLE EMPLOYER 403(b) PLANS. 
(a) IN GENERAL.—Section 403(b) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(15) MULTIPLE EMPLOYER PLANS.— 
‘‘(A) IN GENERAL.—Except in the case of 
a church plan, this subsection shall not be 
treated as failing to apply to an annuity con-
tract solely by reason of such contract being 
purchased under a plan maintained by more 
than 1 employer. 
‘‘(B) TREATMENT OF EMPLOYERS FAILING 
TO MEET REQUIREMENTS OF PLAN.— 
‘‘(i) IN GENERAL.—In the case of a 
plan maintained by more than 1 employer, 
this subsection shall not be treated as fail-
ing to apply to an annuity contract held 
under such plan merely because of one or 
more employers failing to meet the require-
ments of this subsection if such plan satis-
fies rules similar to the rules of section 
413(e)(2) with respect to any such em-
ployer failure. 
‘‘(ii) ADDITIONAL REQUIREMENTS IN 
CASE OF NON-GOVERNMENTAL PLANS.—A 
plan shall not be treated as meeting the re-
VerDate Sep 11 2014 
01:39 Nov 05, 2020
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H8606.IH
H8606
pamtmann on DSKBC07HB2PROD with BILLS
quirements of this subparagraph unless the 
plan meets the requirements of subpara-
graph (A) or (B) of section 413(e)(1), ex-
cept in the case of a multiple employer 
plan maintained solely by any of the fol-
lowing: A State, a political subdivision of a 
State, or an agency or instrumentality of 
any one or more of the foregoing.’’. 
(b) ANNUAL REGISTRATION FOR 403(b) MULTIPLE 
EMPLOYER PLAN.—Section 6057 of such Code is amend-
ed by redesignating subsection (g) as subsection (h) and 
by inserting after subsection (f) the following new sub-
section: 
‘‘(g) 403(b) MULTIPLE EMPLOYER PLANS TREATED 
AS ONE PLAN.—In the case of annuity contracts to which 
this section applies and to which section 403(b) applies 
by reason of the plan under which such contracts are pur-
chased meeting the requirements of paragraph (15) there-
of, such plan shall be treated as a single plan for purposes 
of this section.’’. 
(c) ANNUAL INFORMATION RETURNS
FOR 403(b) 
MULTIPLE EMPLOYER PLAN.—Section 6058 of the Inter-
nal Revenue Code of 1986 is amended by redesignating 
subsection (f) as subsection (g) and by inserting after sub-
section (e) the following new subsection: 
VerDate Sep 11 2014 
01:39 Nov 05, 2020
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H8606.IH
H8606
pamtmann on DSKBC07HB2PROD with BILLS