SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Social Security Benefit Enhancements for Women Act of
2002’’.
(b) TABLE OF CONTENTS.—The table of contents is
as follows:
Sec. 1. Short title and table of contents.
TITLE I—BENEFIT ENHANCEMENTS
Sec. 101. Repeal of 7-year restriction on eligibility for widow’s and widower’s
insurance benefits based on disability.
Sec. 102. Exemption from two-year waiting period for divorced spouse’s bene-
fits upon other spouse’s remarriage.
Sec. 103. Months ending after deceased individual’s death disregarded in apply-
ing early retirement rules with respect to deceased individual
for purposes of limitation on widow’s and widower’s benefits.
TITLE II—AMENDMENTS TO THE INTERNAL REVENUE CODE OF
1986
Sec. 201. Exclusion from gross income for interest on overpayments of income
tax by individuals.
Sec. 202. Deposits made to suspend running of interest on potential underpay-
ments.
Sec. 203. Partial payment of tax liability in installment agreements.
TITLE I—BENEFIT
ENHANCEMENTS
SEC. 101. REPEAL OF 7-YEAR RESTRICTION ON ELIGIBILITY
FOR WIDOW’S AND WIDOWER’S INSURANCE
BENEFITS BASED ON DISABILITY.
(a) WIDOW’S INSURANCE BENEFITS.—
(1) IN GENERAL.—Section 202(e) of the Social
Security Act (42 U.S.C. 402(e)) is amended—
(A) in paragraph (1)(B)(ii), by striking
‘‘which began before the end of the period spec-
ified in paragraph (4)’’;
(B) in paragraph (1)(F)(ii), by striking
‘‘(I) in the period specified in paragraph (4)
and (II)’’;
(C) by striking paragraph (4) and by re-
designating paragraphs (5) through (9) as
paragraphs (4) through (8), respectively; and
(D) in paragraph (4)(A)(ii) (as redesig-
nated), by striking ‘‘whichever’’ and all that fol-
lows through ‘‘begins’’ and inserting ‘‘the first
day of the seventeenth month before the month
in which her application is filed’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 202(e)(1)(F)(i) of such Act
(42 U.S.C. 402(e)(1)(F)(i)) is amended by
striking ‘‘paragraph (5)’’ and inserting ‘‘para-
graph (4)’’.
(B) Section 202(e)(1)(C)(ii)(III) of such
Act (42 U.S.C. 402(e)(2)(C)(ii)(III)) is amend-
ed by striking ‘‘paragraph (8)’’ and inserting
‘‘paragraph (7)’’.
(C) Section 202(e)(2)(A) of such Act (42
U.S.C. 402(e)(2)(A)) is amended by striking
‘‘paragraph (7)’’ and inserting ‘‘paragraph
(6)’’.
(D) Section 226(e)(1)(A)(i) of such Act
(42 U.S.C. 426(e)(1)(A)(i)) is amended by
striking ‘‘202(e)(4),’’.
(b) WIDOWER’S INSURANCE BENEFITS.—
(1) IN GENERAL.—Section 202(f) of such Act
(42 U.S.C. 402(f)) is amended—
(A) in paragraph (1)(B)(ii), by striking
‘‘which began before the end of the period spec-
ified in paragraph (5)’’;
(B) in paragraph (1)(F)(ii), by striking
‘‘(I) in the period specified in paragraph (5)
and (II)’’;
(C) by striking paragraph (5) and by re-
designating paragraphs (6) through (9) as
paragraphs (5) through (8), respectively; and
(D) in paragraph (5)(A)(ii) (as redesig-
nated), by striking ‘‘whichever’’ and all that fol-
lows through ‘‘begins’’ and inserting ‘‘the first
day of the seventeenth month before the month
in which his application is filed’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 202(f)(1)(F)(i) of such Act (42
U.S.C. 402(f)(1)(F)(i)) is amended by striking
‘‘paragraph (6)’’ and inserting ‘‘paragraph
(5)’’.
(B) Section 202(f)(1)(C)(ii)(III) of such
Act (42 U.S.C. 402(f)(2)(C)(ii)(III)) is amend-
ed by striking ‘‘paragraph (8)’’ and inserting
‘‘paragraph (7)’’.
(C) Section 226(e)(1)(A)(i) of such Act (as
amended by subsection (a)(2)) is further
amended by striking ‘‘202(f)(1)(B)(ii), and
202(f)(5)’’ 
and 
inserting 
‘‘and
202(f)(1)(B)(ii)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to benefits for months
after November 2002.
SEC. 102. EXEMPTION FROM TWO-YEAR WAITING PERIOD
FOR DIVORCED SPOUSE’S BENEFITS UPON
OTHER SPOUSE’S REMARRIAGE.
(a) 
WIFE’S
INSURANCE
BENEFITS.—Section
202(b)(5)(A) of the Social Security Act (42 U.S.C.
402(b)(5)(A)) is amended by adding at the end the fol-
lowing new sentence: ‘‘The criterion for entitlement under
clause (ii) shall be deemed met upon the remarriage of
the insured individual to someone other than the applicant
during the 2-year period referred to in such clause.’’.
(b) HUSBAND’S
INSURANCE
BENEFITS.—Section
202(c)(5)(A) of such Act (42 U.S.C. 402(c)(5)(A)) is
amended by adding at the end the following new sentence:
‘‘The criterion for entitlement under clause (ii) shall be
deemed met upon the remarriage of the insured individual
to someone other than the applicant during the 2-year pe-
riod referred to in such clause.’’.
(c) CONFORMING AMENDMENT TO EXEMPTION OF
INSURED INDIVIDUAL’S DIVORCED SPOUSE FROM EARN-
INGS TEST AS APPLIED TO THE INSURED INDIVIDUAL.—
Section 
203(b)(2)(B) 
of 
such 
Act 
(42 
U.S.C.
403(b)(2)(B)) is amended by adding at the end the fol-
lowing new sentence: ‘‘The requirement under such clause
(ii) shall be deemed met upon the remarriage of the indi-
vidual referred to in paragraph (1) to someone other than
the divorced spouse referred to in such clause during the
2-year period referred to in such clause.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to benefits for months
after November 2002.
SEC. 103. MONTHS ENDING AFTER DECEASED INDIVID-
UAL’S DEATH DISREGARDED IN APPLYING
EARLY RETIREMENT RULES WITH RESPECT
TO DECEASED INDIVIDUAL FOR PURPOSES
OF LIMITATION ON WIDOW’S AND WIDOWER’S
BENEFITS.
(a) 
WIDOW’S
INSURANCE
BENEFITS.—Section
202(e)(2)(D)(i) of the Social Security Act (42 U.S.C.
402(e)(2)(D)(i)) is amended by inserting after ‘‘applica-
ble,’’ the following: ‘‘except that, in applying paragraph
(7) of subsection (q) for purposes of this clause, any
month ending with or after the date of the death of such
deceased individual shall be deemed to be excluded under
such paragraph (in addition to months otherwise excluded
under such paragraph),’’.
(b) WIDOWER’S
INSURANCE
BENEFITS.—Section
202(f)(3)(D)(i) of such Act (42 U.S.C. 402(f)(3)(D)(i))
is amended by inserting after ‘‘applicable,’’ the following:
‘‘except that, in applying paragraph (7) of subsection (q)
for purposes of this clause, any month ending with or after
the date of the death of such deceased individual shall be
deemed to be excluded under such paragraph (in addition
to months otherwise excluded under such paragraph),’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to benefits for months
after November 2002.
TITLE II—AMENDMENTS TO THE
INTERNAL 
REVENUE 
CODE
OF 1986
SEC. 201. EXCLUSION FROM GROSS INCOME FOR INTEREST
ON OVERPAYMENTS OF INCOME TAX BY INDI-
VIDUALS.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically excluded from gross income) is amended
by inserting after section 139 the following new section:
‘‘SEC. 139A. EXCLUSION FROM GROSS INCOME FOR INTER-
EST ON OVERPAYMENTS OF INCOME TAX BY
INDIVIDUALS.
‘‘(a) IN GENERAL.—In the case of an individual,
gross income shall not include interest paid under section
6611 on any overpayment of tax imposed by this subtitle.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply in
the case of a failure to claim items resulting in the over-
payment on the original return if the Secretary determines
that the principal purpose of such failure is to take advan-
tage of subsection (a).
‘‘(c) SPECIAL RULE FOR DETERMINING MODIFIED
ADJUSTED GROSS INCOME.—For purposes of this title,
interest not included in gross income under subsection (a)
shall not be treated as interest which is exempt from tax
for purposes of sections 32(i)(2)(B) and 6012(d) or any
computation in which interest exempt from tax under this
title is added to adjusted gross income.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for part III of subchapter B of chapter 1 of such Code
is amended by inserting after the item relating to section
139 the following new item:
‘‘Sec. 139A. Exclusion from gross income for interest on over-
payments of income tax by individuals.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to interest received after December
31, 2006.
SEC. 202. DEPOSITS MADE TO SUSPEND RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS.
(a) IN GENERAL.—Subchapter A of chapter 67 of the
Internal Revenue Code of 1986 (relating to interest on un-
derpayments) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 6603. DEPOSITS MADE TO SUSPEND RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS,
ETC.
‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER THAN
AS PAYMENT OF TAX.—A taxpayer may make a cash de-
posit with the Secretary which may be used by the Sec-
retary to pay any tax imposed under subtitle A or B or
chapter 41, 42, 43, or 44 which has not been assessed
at the time of the deposit. Such a deposit shall be made
in such manner as the Secretary shall prescribe.
‘‘(b) NO INTEREST IMPOSED.—To the extent that
such deposit is used by the Secretary to pay tax, for pur-
poses of section 6601 (relating to interest on underpay-
ments), the tax shall be treated as paid when the deposit
is made.
‘‘(c) RETURN OF DEPOSIT.—Except in a case where
the Secretary determines that collection of tax is in jeop-
ardy, the Secretary shall return to the taxpayer any
amount of the deposit (to the extent not used for a pay-
ment of tax) which the taxpayer requests in writing.
‘‘(d) PAYMENT OF INTEREST.—
‘‘(1) IN
GENERAL.—For purposes of section
6611 (relating to interest on overpayments), a de-
posit which is returned to a taxpayer shall be treated
as a payment of tax for any period to the extent
(and only to the extent) attributable to a disputable
tax for such period. Under regulations prescribed by
the Secretary, rules similar to the rules of section
6611(b)(2) shall apply.
‘‘(2) DISPUTABLE TAX.—
‘‘(A) IN GENERAL.—For purposes of this
section, the term ‘disputable tax’ means the
amount of tax specified at the time of the de-
posit as the taxpayer’s reasonable estimate of
the maximum amount of any tax attributable to
disputable items.
‘‘(B) SAFE
HARBOR
BASED
ON
30-DAY
LETTER.—In the case of a taxpayer who has
been issued a 30-day letter, the maximum
amount of tax under subparagraph (A) shall
not be less than the amount of the proposed de-
ficiency specified in such letter.
‘‘(3) OTHER
DEFINITIONS.—For purposes of
paragraph (2)—
‘‘(A) DISPUTABLE ITEM.—The term ‘dis-
putable item’ means any item of income, gain,
loss, deduction, or credit if the taxpayer—
‘‘(i) has a reasonable basis for its
treatment of such item, and
‘‘(ii) reasonably believes that the Sec-
retary also has a reasonable basis for dis-
allowing the taxpayer’s treatment of such
item.
‘‘(B) 30-DAY LETTER.—The term ‘30-day
letter’ means the first letter of proposed defi-
ciency which allows the taxpayer an opportunity
for administrative review in the Internal Rev-
enue Service Office of Appeals.
‘‘(4) RATE OF INTEREST.—The rate of interest
allowable under this subsection shall be the Federal
short-term rate determined under section 6621(b),
compounded daily.
‘‘(e) USE OF DEPOSITS.—
‘‘(1) PAYMENT OF TAX.—Except as otherwise
provided by the taxpayer, deposits shall be treated
as used for the payment of tax in the order depos-
ited.
‘‘(2) RETURNS
OF
DEPOSITS.—Deposits shall
be treated as returned to the taxpayer on a last-in,
first-out basis.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter A of chapter 67 of such Code is amended
by adding at the end the following new item:
‘‘Sec. 6603. Deposits made to suspend running of interest on po-
tential underpayments, etc.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to deposits made after the
date of the enactment of this Act.
(2) COORDINATION
WITH
DEPOSITS
MADE
UNDER REVENUE PROCEDURE 84–58.—In the case of
an amount held by the Secretary of the Treasury or
his delegate on the date of the enactment of this Act
as a deposit in the nature of a cash bond deposit