110TH CONGRESS 
2D SESSION 
H. R. 5719 
AN ACT 
To amend the Internal Revenue Code of 1986 to conform 
return preparer penalty standards, delay implementation 
of withholding taxes on government contractors, enhance 
taxpayer protections, assist low-income taxpayers, 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 
‘‘Taxpayer Assistance and Simplification Act of 2008’’. 
(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.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Modification of penalty on understatement of taxpayer’s liability by tax 
return preparer. 
Sec. 3. Removal of cellular telephones (or similar telecommunications equip-
ment) from listed property. 
Sec. 4. Delay of application of withholding requirement on certain governmental 
payments for goods and services. 
Sec. 5. Elderly and disabled individuals receiving in-home care under certain 
government programs not subject to employment tax provi-
sions. 
Sec. 6. Referrals to low income taxpayer clinics permitted. 
Sec. 7. Programs for the benefit of low-income taxpayers. 
Sec. 8. EITC outreach. 
Sec. 9. Prohibition on IRS debt indicators for predatory refund anticipation 
loans. 
Sec. 10. Study on delivery of tax refunds. 
Sec. 11. Extension of time for return of property for wrongful levy. 
Sec. 12. Individuals held harmless on wrongful levy, etc., on individual retire-
ment plan. 
Sec. 13. Taxpayer notification of suspected identity theft. 
Sec. 14. Repeal of authority to enter into private debt collection contracts. 
Sec. 15. Clarification of IRS unclaimed refund authority. 
Sec. 16. Prohibition on misuse of Department of the Treasury names and sym-
bols. 
Sec. 17. Substantiation of amounts paid or distributed out of health savings ac-
count. 
Sec. 18. Certain domestically controlled foreign persons performing services 
under contract with United States Government treated as 
American employers. 
Sec. 19. Time for payment of corporate estimated tax. 
Sec. 20 GAO study on health savings accounts.
SEC. 2. MODIFICATION OF PENALTY ON UNDERSTATEMENT 
OF TAXPAYER’S LIABILITY BY TAX RETURN 
PREPARER. 
(a) IN GENERAL.—Subsection (a) of section 6694 
(relating to understatement due to unreasonable positions) 
is amended to read as follows: 
‘‘(a) UNDERSTATEMENT DUE
TO UNREASONABLE 
POSITIONS.— 
‘‘(1) IN GENERAL.—If a tax return preparer— 
‘‘(A) prepares any return or claim of re-
fund with respect to which any part of an un-
derstatement of liability is due to a position de-
scribed in paragraph (2), and 
‘‘(B) knew (or reasonably should have 
known) of the position, 
such tax return preparer shall pay a penalty with re-
spect to each such return or claim in an amount 
equal to the greater of $1,000 or 50 percent of the 
income derived (or to be derived) by the tax return 
preparer with respect to the return or claim. 
‘‘(2) UNREASONABLE POSITION.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, a position is de-
scribed in this paragraph unless there is or was 
substantial authority for the position.
‘‘(B) DISCLOSED POSITIONS.—If the posi-
tion was disclosed as provided in section 
6662(d)(2)(B)(ii)(I) and is not a position to 
which subparagraph (C) applies, the position is 
described in this paragraph unless there is a 
reasonable basis for the position. 
‘‘(C) TAX
SHELTERS
AND
REPORTABLE 
TRANSACTIONS.—If the position is with respect 
to a tax shelter (as defined in section 
6662(d)(2)(C)(ii)) or a reportable transaction 
to which section 6662A applies, the position is 
described in this paragraph unless it is reason-
able to believe that the position would more 
likely than not be sustained on its merits. 
‘‘(3) REASONABLE
CAUSE
EXCEPTION.—No 
penalty shall be imposed under this subsection if it 
is shown that there is reasonable cause for the un-
derstatement and the tax return preparer acted in 
good faith.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply— 
(1) in the case of a position described in sub-
paragraph (A) or (B) of section 6694(a)(2) of the 
Internal Revenue Code of 1986 (as amended by this
section), to returns prepared after May 25, 2007, 
and 
(2) in the case of a position described in sub-
paragraph (C) of such section (as amended by this 
section), to returns prepared for taxable years end-
ing after the date of the enactment of this Act. 
SEC. 3. REMOVAL OF CELLULAR TELEPHONES (OR SIMILAR 
TELECOMMUNICATIONS EQUIPMENT) FROM 
LISTED PROPERTY. 
(a) IN GENERAL.—Subparagraph (A) of section 
280F(d)(4) (defining listed property) is amended by in-
serting ‘‘and’’ at the end of clause (iv), by striking clause 
(v), and by redesignating clause (vi) as clause (v). 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 4. DELAY OF APPLICATION OF WITHHOLDING RE-
QUIREMENT ON CERTAIN GOVERNMENTAL 
PAYMENTS FOR GOODS AND SERVICES. 
(a) IN GENERAL.—Subsection (b) of section 511 of 
the Tax Increase Prevention and Reconciliation Act of 
2005 is amended by striking ‘‘December 31, 2010’’ and 
inserting ‘‘December 31, 2011’’. 
(b) REPORT
TO
CONGRESS.—Not later than 6 
months after the date of the enactment of this Act, the
Secretary of the Treasury shall submit to the Committee 
on Ways and Means of the House of Representatives and 
the Committee on Finance of the Senate a report with 
respect to the withholding requirements of section 3402(t) 
of the Internal Revenue Code of 1986, including a detailed 
analysis of— 
(1) the problems, if any, which are anticipated 
in administering and complying with such require-
ments, 
(2) the burdens, if any, that such requirements 
will place on governments and businesses (taking 
into account such mechanisms as may be necessary 
to administer such requirements), and 
(3) the application of such requirements to 
small expenditures for services and goods by govern-
ments. 
SEC. 5. ELDERLY AND DISABLED INDIVIDUALS RECEIVING 
IN-HOME CARE UNDER CERTAIN GOVERN-
MENT PROGRAMS NOT SUBJECT TO EMPLOY-
MENT TAX PROVISIONS. 
(a) IN GENERAL.—Chapter 25 (relating to general 
provisions relating to employment taxes) is amended by 
adding at the end the following new section:
‘‘SEC. 3511. ELDERLY AND DISABLED INDIVIDUALS RECEIV-
ING IN-HOME CARE UNDER CERTAIN GOV-
ERNMENT PROGRAMS. 
‘‘(a) IN GENERAL.—In the case of amounts paid 
under a home care service program to a home care service 
provider by the fiscal administrator of such program— 
‘‘(1) the home care service recipient shall not be 
liable for the payment of any taxes imposed under 
this subtitle with respect to amounts paid for the 
provision of services under such program, and 
‘‘(2) the fiscal administrator shall be so liable. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) HOME
CARE
SERVICE
PROGRAM.—The 
term ‘home care service program’ means a State or 
local government program— 
‘‘(A) any portion of which is funded with 
Federal funds, and 
‘‘(B) under which domestic services are 
provided to elderly or disabled individuals in 
their homes. 
Such term shall not include any program to the ex-
tent home care service recipients make payments to 
the home care service providers for such in-home do-
mestic services. 
‘‘(2) HOME
CARE
SERVICE
PROVIDER.—The 
term ‘home care service provider’ means any indi-
vidual who provides domestic services to a home care 
service recipient under a home care service program. 
‘‘(3) HOME
CARE
SERVICE
RECIPIENT.—The 
term ‘home care service recipient’ means any indi-
vidual receiving domestic services under a home care 
service program. 
‘‘(4) FISCAL ADMINISTRATOR.—The term ‘fiscal 
administrator’ means any person or governmental 
entity who pays amounts under a home care service 
program to home care service providers for the pro-
vision of domestic services under such program. 
‘‘(c) RETURNS
BY FISCAL ADMINISTRATOR.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—Returns relating to taxes 
imposed or amounts required to be withheld under 
this subtitle shall be made under the identifying 
number of the fiscal administrator. 
‘‘(2) IDENTIFICATION
OF
SERVICE
RECIPI-
ENT.—The fiscal administrator shall, to the extent 
required under regulations prescribed by the Sec-
retary, make a return setting forth— 
‘‘(A) the name, address, and identifying 
number of each home care service recipient for 
whom amounts are paid by such fiscal adminis-
trator under the home care services program, 
and 
‘‘(B) such other information as the Sec-
retary may require. 
‘‘(d) REGULATIONS.—The Secretary may prescribe 
such regulations or other guidance as may be necessary 
to carry out the purposes of this section, including requir-
ing deposits of any tax imposed under this subtitle.’’. 
(b) SERVICE RECIPIENT IDENTIFICATION RETURN 
TREATED AS INFORMATION RETURN.—Paragraph (3) of 
section 6724(d) is amended by striking ‘‘and’’ at the end 
of subparagraph (C)(ii), by striking the period at the end 
of subparagraph (D)(ii) and inserting ‘‘, and’’, and by 
adding at the end the following new subparagraph: 
‘‘(E) 
any 
requirement 
under 
section 
3511(c)(2).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for chapter 25 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 3511. Elderly and disabled individuals receiving in-home care under cer-
tain government programs.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid after December 
31, 2008.
SEC. 6. REFERRALS TO LOW INCOME TAXPAYER CLINICS 
PERMITTED. 
(a) IN GENERAL.—Subsection (c) of section 7526 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(6) TREASURY
EMPLOYEES
PERMITTED
TO 
REFER TAXPAYERS TO QUALIFIED LOW-INCOME TAX-
PAYER CLINICS.—Notwithstanding any other provi-
sion of law, officers and employees of the Depart-
ment of the Treasury may refer taxpayers for advice 
and assistance to qualified low-income taxpayer clin-
ics receiving funding under this section.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to referrals made after the date 
of the enactment of this Act. 
SEC. 7. PROGRAMS FOR THE BENEFIT OF LOW-INCOME 
TAXPAYERS. 
(a) VOLUNTEER INCOME TAX ASSISTANCE PRO-
GRAMS.—Chapter 77 (relating to miscellaneous provi-
sions) is amended by inserting after section 7526 the fol-
lowing new section: 
‘‘SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PRO-
GRAMS. 
‘‘(a) IN GENERAL.—The Secretary may, subject to 
the availability of appropriated funds, make grants to pro-
vide matching funds for the development, expansion, or 
continuation of volunteer income tax assistance programs. 
‘‘(b) VOLUNTEER INCOME TAX ASSISTANCE PRO-
GRAM.—For purposes of this section, the term ‘volunteer 
income tax assistance program’ means a program— 
‘‘(1) which does not charge taxpayers for its re-
turn preparation services, 
‘‘(2) which operates programs to assist low and 
moderate-income (as determined by the Secretary) 
taxpayers in preparing and filing their Federal in-
come tax returns, and 
‘‘(3) in which all of the volunteers who assist in 
the preparation of Federal income tax returns meet 
the requirements prescribed by the Secretary. 
‘‘(c) SPECIAL RULES AND LIMITATIONS.— 
‘‘(1) AGGREGATE
LIMITATION.—Unless other-
wise provided by specific appropriation, the Sec-
retary shall not allocate more than $10,000,000 per 
year (exclusive of costs of administering the pro-
gram) to grants under this section. 
‘‘(2) OTHER APPLICABLE RULES.—Rules simi-
lar to the rules under paragraphs (2) through (6) of 
section 7526(c) shall apply with respect to the 
awarding of grants to volunteer income tax assist-
ance programs.’’.
(b) INCREASE IN AUTHORIZED GRANTS FOR LOW-IN-
COME TAXPAYER CLINICS.—Paragraph (1) of section 
7526(c) (relating to aggregate limitation) is amended by 
striking ‘‘$6,000,000’’ and inserting ‘‘$10,000,000’’. 
(c) CLERICAL AMENDMENTS.— 
(1) Section 7526(c)(5) is amended by inserting 
‘‘qualified’’ before ‘‘low-income’’. 
(2) The table of sections for chapter 77 is 
amended by inserting after the item relating to sec-
tion 7526 the following new item: 
‘‘Sec. 7526A. Volunteer income tax assistance programs.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 8. EITC OUTREACH. 
(a) IN GENERAL.—Section 32 (relating to earned in-
come) is amended by adding at the end the following new 
subsection: 
‘‘(n) NOTIFICATION OF POTENTIAL ELIGIBILITY FOR 
CREDIT AND REFUND.— 
‘‘(1) IN GENERAL.—To the extent possible and 
on an annual basis, the Secretary shall provide to 
each taxpayer who— 
‘‘(A) for any preceding taxable year for 
which credit or refund is not precluded by sec-
tion 6511, and
‘‘(B) did not claim the credit under sub-
section (a) but may be allowed such credit for 
any such taxable year based on return or return 
information (as defined in section 6103(b)) 
available to the Secretary, 
notice that such taxpayer may be eligible to claim 
such credit and a refund for such taxable year. 
‘‘(2) NOTICE.—Notice provided under para-
graph (1) shall be in writing and sent to the last 
known address of the taxpayer.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 9. PROHIBITION ON IRS DEBT INDICATORS FOR PRED-
ATORY REFUND ANTICIPATION LOANS. 
(a) IN GENERAL.—Subsection (f) of section 6011 (re-
lating to promotion of electronic filing) is amended by add-
ing at the end the following new paragraph: 
‘‘(3) PROHIBITION ON IRS DEBT INDICATORS 
FOR PREDATORY REFUND ANTICIPATION LOANS.— 
‘‘(A) IN GENERAL.—In carrying out any 
program under this subsection, the Secretary 
shall not provide a debt indicator to any person 
with respect to any refund anticipation loan if 
the Secretary determines that the business
practices of such person involve refund anticipa-
tion loans and related charges and fees that are 
predatory. 
‘‘(B) REFUND ANTICIPATION LOAN.—For 
purposes of this paragraph, the term ‘refund 
anticipation loan’ means a loan of money or of 
any other thing of value to a taxpayer secured 
by the taxpayer’s anticipated receipt of a Fed-
eral tax refund. 
‘‘(C) IRS DEBT INDICATOR.—For purposes 
of this paragraph, the term ‘debt indicator’ 
means a notification provided through a tax re-
turn’s acknowledgment file that a refund will be 
offset to repay debts for delinquent Federal or 
State taxes, student loans, child support, or 
other Federal agency debt.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 10. STUDY ON DELIVERY OF TAX REFUNDS. 
(a) IN GENERAL.—The Secretary of the Treasury, in 
consultation with the National Taxpayer Advocate, shall 
conduct a study on the feasibility of delivering tax refunds 
on debit cards, prepaid cards, and other electronic means
to assist individuals that do not have access to financial 
accounts or institutions. 
(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of the Treasury 
shall submit a report to Congress containing the results 
of the study conducted under subsection (a). 
SEC. 11. EXTENSION OF TIME FOR RETURN OF PROPERTY 
FOR WRONGFUL LEVY. 
(a) EXTENSION OF TIME FOR RETURN OF PROPERTY 
SUBJECT TO LEVY.—Subsection (b) of section 6343 (re-
lating to return of property) is amended by striking ‘‘9 
months’’ and inserting ‘‘2 years’’. 
(b) PERIOD OF LIMITATION ON SUITS.—Subsection 
(c) of section 6532 (relating to suits by persons other than 
taxpayers) is amended— 
(1) in paragraph (1) by striking ‘‘9 months’’ 
and inserting ‘‘2 years’’, and 
(2) in paragraph (2) by striking ‘‘9-month’’ and 
inserting ‘‘2-year’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
(1) levies made after the date of the enactment 
of this Act, and 
(2) levies made on or before such date if the 9- 
month period has not expired under section 6343(b)
of the Internal Revenue Code of 1986 (without re-
gard to this section) as of such date. 
SEC. 12. INDIVIDUALS HELD HARMLESS ON WRONGFUL 
LEVY, ETC., ON INDIVIDUAL RETIREMENT 
PLAN. 
(a) IN GENERAL.—Section 6343 (relating to author-
ity to release levy and return property) is amended by add-
ing at the end the following new subsection: 
‘‘(f) INDIVIDUALS HELD HARMLESS ON WRONGFUL 
LEVY, ETC. ON INDIVIDUAL RETIREMENT PLAN.— 
‘‘(1) IN GENERAL.—If the Secretary determines 
that an individual retirement plan has been levied 
upon in a case to which subsection (b) or (d)(2)(A) 
applies, an amount equal to the sum of— 
‘‘(A) the amount of money returned by the 
Secretary on account of such levy, and 
‘‘(B) interest paid under subsection (c) on 
such amount of money, 
may be deposited into such individual retirement 
plan or any other individual retirement plan (other 
than an endowment contract) to which a rollover 
from the plan levied upon is permitted. An amount 
may not be deposited into a Roth IRA under the 
preceding sentence unless the individual retirement
plan levied upon was a Roth IRA at the time of such 
levy. 
‘‘(2) TREATMENT AS ROLLOVER.—If amounts 
are deposited into an individual retirement plan 
under paragraph (1) not later than the 60th day 
after the date on which the individual receives the 
amounts under paragraph (1)— 
‘‘(A) such deposit shall be treated as a 
rollover described in section 408(d)(3)(A)(i), 
‘‘(B) to the extent the deposit includes in-
terest paid under subsection (c), such interest 
shall not be includible in gross income, and 
‘‘(C) such deposit shall not be taken into 
account under section 408(d)(3)(B). 
For purposes of subparagraph (B), an amount shall 
be treated as interest only to the extent that the 
amount deposited exceeds the amount of the levy. 
‘‘(3) REFUND, ETC., OF
INCOME
TAX
ON 
LEVY.—If any amount is includible in gross income 
for a taxable year by reason of a levy referred to in 
paragraph (1) and any portion of such amount is 
treated as a rollover under paragraph (2), any tax 
imposed by chapter 1 on such portion shall not be 
assessed, and if assessed shall be abated, and if col-
lected shall be credited or refunded as an overpay-
ment made on the due date for filing the return of 
tax for such taxable year. 
‘‘(4) INTEREST.—Notwithstanding subsection 
(d), interest shall be allowed under subsection (c) in 
a case in which the Secretary makes a determination 
described in subsection (d)(2)(A) with respect to a 
levy upon an individual retirement plan.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid under subsections 
(b), (c), and (d)(2)(A) of section 6343 of the Internal Rev-
enue Code of 1986 after the date of the enactment of this 
Act. 
SEC. 13. TAXPAYER NOTIFICATION OF SUSPECTED IDEN-
TITY THEFT. 
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the 
following new section: 
‘‘SEC. 
7529. 
NOTIFICATION 
OF 
SUSPECTED 
IDENTITY 
THEFT. 
‘‘If, in the course of an investigation under the inter-
nal revenue laws, the Secretary determines that there was 
or may have been an unauthorized use of the identity of 
the taxpayer or a dependent of the taxpayer, the Secretary 
shall, to the extent permitted by law—
‘‘(1) as soon as practicable and without jeop-
ardizing such investigation, notify the taxpayer of 
such determination, and 
‘‘(2) if any person is criminally charged by in-
dictment or information with respect to such unau-
thorized use, notify such taxpayer as soon as prac-
ticable of such charge.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 7529. Notification of suspected identity theft.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to determinations made after the 
date of the enactment of this Act. 
SEC. 14. REPEAL OF AUTHORITY TO ENTER INTO PRIVATE 
DEBT COLLECTION CONTRACTS. 
(a) IN GENERAL.—Subchapter A of chapter 64 is 
amended by striking section 6306. 
(b) CONFORMING AMENDMENTS.— 
(1) Subchapter B of chapter 76 is amended by 
striking section 7433A. 
(2) Section 7811 is amended by striking sub-
section (g). 
(3) Section 1203 of the Internal Revenue Serv-
ice Restructuring Act of 1998 is amended by strik-
ing subsection (e).
(4) The table of sections for subchapter A of 
chapter 64 is amended by striking the item relating 
to section 6306. 
(5) The table of sections for subchapter B of 
chapter 76 is amended by striking the item relating 
to section 7433A. 
(c) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall take effect on the date of the en-
actment of this Act. 
(2) EXCEPTION
FOR
EXISTING
CONTRACTS, 
ETC.—The amendments made by this section shall 
not apply to any contract which was entered into be-
fore March 1, 2008, and is not renewed or extended 
on or after such date. 
(3) UNAUTHORIZED CONTRACTS AND EXTEN-
SIONS TREATED AS VOID.—Any qualified tax collec-
tion contract (as defined in section 6306 of the In-
ternal Revenue Code of 1986, as in effect before its 
repeal) which is entered into on or after March 1, 
2008, and any extension or renewal on or after such 
date of any qualified tax collection contract (as so 
defined), shall be void.
SEC. 15. CLARIFICATION OF IRS UNCLAIMED REFUND AU-
THORITY. 
Paragraph (1) of section 6103(m) (relating to tax re-
funds) is amended by inserting ‘‘, and through any other 
means of mass communication,’’ after ‘‘media’’. 
SEC. 16. PROHIBITION ON MISUSE OF DEPARTMENT OF 
THE TREASURY NAMES AND SYMBOLS. 
(a) IN GENERAL.—Subsection (a) of section 333 of 
title 31, United States Code, is amended by inserting 
‘‘Internet domain address,’’ after ‘‘solicitation,’’ both 
places it appears. 
(b) 
PENALTY
FOR
MISUSE
BY
ELECTRONIC 
MEANS.—Subsections (c)(2) and (d)(1) of section 333 of 
such Code are each amended by inserting ‘‘or any other 
mass communications by electronic means,’’ after ‘‘tele-
cast,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to violations occurring 
after the date of the enactment of this Act. 
SEC. 17. SUBSTANTIATION OF AMOUNTS PAID OR DISTRIB-
UTED OUT OF HEALTH SAVINGS ACCOUNT. 
(a) IN GENERAL.—Paragraph (1) of section 223(f) 
(relating to amounts used for qualified medical expenses) 
is amended by inserting ‘‘(and, in the case of amounts 
paid or distributed after December 31, 2010, substan-
tiated in a manner similar to the substantiation required
for flexible spending arrangements as related to account 
beneficiary substantiation requirements)’’ after ‘‘account 
beneficiary’’. 
(b) REPORTS.—Subsection (h) of section 223 (relat-
ing to reports) is amended— 
(1) by redesignating paragraphs (1) and (2) as 
subparagraphs (A) and (B), respectively, 
(2) by moving the text of subparagraphs (A) 
and (B) (as so redesignated) and the last sentence 
2 ems to the right, 
(3) by striking ‘‘(h) REPORTS.—The Secretary 
may require—’’ and inserting the following: 
‘‘(h) REPORTS.— 
‘‘(1) IN
GENERAL.—The Secretary may re-
quire—’’, and 
(4) by adding at the end the following new 
paragraph: 
‘‘(2) RELATING
TO
SUBSTANTIATION.—Not 
later than January 15 of each calendar year after 
2011, the trustee of a health savings account shall 
make a report regarding such account to the Sec-
retary and the account beneficiary setting forth— 
‘‘(A) the name, address, and identifying 
number of the account beneficiary, and
‘‘(B) the amount paid or distributed out of 
such account for the preceding calendar year 
not substantiated in accordance with subsection 
(f)(1).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to amounts paid or 
distributed out of health savings accounts after December 
31, 2010. 
SEC. 18. CERTAIN DOMESTICALLY CONTROLLED FOREIGN 
PERSONS PERFORMING SERVICES UNDER 
CONTRACT WITH UNITED STATES GOVERN-
MENT TREATED AS AMERICAN EMPLOYERS. 
(a) FICA TAXES.—Section 3121 (relating to defini-
tions) is amended by adding at the end the following new 
subsection: 
‘‘(z) TREATMENT OF CERTAIN FOREIGN PERSONS AS 
AMERICAN EMPLOYERS.— 
‘‘(1) IN GENERAL.—If any employee of a for-
eign person is performing services in connection with 
a contract between the United States Government 
(or any instrumentality thereof) and any member of 
any domestically controlled group of entities which 
includes such foreign person, such foreign person 
shall be treated for purposes of this chapter as an