Version	Word Count	Changes From Previous Version	Percent Change
Introduced in House	5,629	n/a	n/a
Reported in House	6,758	12	25%
Engrossed in House	6,646	15	3%
Placed on Calendar Senate	6,692	8	0%
Engrossed Amendment Senate	10,979	246	75%
Engrossed Amendment House	20,805	201 Show Changes Hide Changes	73%

Display Version Introduced in House Reported in House Engrossed in House Placed on Calendar Senate Engrossed Amendment Senate Engrossed Amendment House

HR 3997 EAS

In the Senate of the United States,December 12, 2007.Resolved,That the bill fromHCommentsClose CommentsPermalink

In the House of Representatives, U. S., CommentsClose CommentsPermalink

Resolved, That the House agree to the amendments of the Senate to the bill (H.R. 3997) entitled `An Act to amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes.', do pass with the followingAMENDMENTS:Strike out all after the enacting clause and insert', with the followingCommentsClose CommentsPermalink

In lieu of the matter proposed to be inserted by the amendment of the Senate to the text of the bill, insert the following:CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE;, ETC.

(a) Short Title- This Act may be cited as the `Defenders of Freedom Tax ReliefHeroes Earnings Assistance and Relief Tax Act of 2007'. CommentsClose CommentsPermalink





(b) Amendment of 1986 CodReference- Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. CommentsClose CommentsPermalink





(c) Table of Contents- The table of contents for this Act is as follows: CommentsClose CommentsPermalink





Sec. 1. Short title;, etc. CommentsClose CommentsPermalink

TITLE I--TAX RELIEF AND PROTECTIONBENEFITS FOR MILITARY PERSONNELAND VOLUNTEER FIREFIGHTERS

Sec. 101. Permanent extension of qualified mortgage bond program rules for veterans.Sec. 102. Exclusion of certain amounts from income for purposes of eligibility for certain housing provisions.Sec. 103. Permanent extension of election to treatElection to include combat pay as earned income for purposes of earned income tax credit. CommentsClose CommentsPermalink





Sec. 104. Extension of statute of limitations to file claims for refunds relating to disability determinations by Department of Veterans Affairs.Sec. 105. Credit for employer differential wage payments to employees who are active duty members of the uniformed services.Sec. 106. Permanent extension of penalty-free withdrawals from retirement plans by individual called to active duty.Sec. 107. State payments to service members treated as qualified military benefit2. Modification of mortgage revenue bonds for veterans. CommentsClose CommentsPermalink





Sec. 1083. Survivor and disability payments with respect to qualified military service. CommentsClose CommentsPermalink





Sec. 1094. Treatment of differential military pay as wages. CommentsClose CommentsPermalink





Sec. 11005. Extension of exclusion from income for benefits provided to volunteer firefighters and emergency medical responders. CommentsClose CommentsPermalink





Sec. 106. Special period of limitation when uniformed services retired pay is reduced as a result of award of disability compensation. CommentsClose CommentsPermalink





Sec. 107. Distributions from retirement plans to individuals called to active duty. CommentsClose CommentsPermalink





Sec. 108. Disclosure of return information relating to veterans programs made permanent. CommentsClose CommentsPermalink





Sec. 11109. Contributions of military death gratuities to Roth IRAs and Education Savings Accounts. CommentsClose CommentsPermalink





TITLE II--CERTAIN HOUSING BENEFITS FOR INTELLIGENCE COMMUNITY AND PEACE CORPS VOLUNTEERSSec. 201 Sec. 110. Suspension of 5-year period during service with the Peace Corps. CommentsClose CommentsPermalink





Sec. 111. Credit for employer differential wage payments to employees who are active duty members of the uniformed services. CommentsClose CommentsPermalink





Sec. 112. State payments to service members treated as qualified military benefits. CommentsClose CommentsPermalink





Sec. 113. Permanent exclusion of gain from sale of a principal residence by certain employees of the intelligence community. CommentsClose CommentsPermalink





Sec. 114. Special disposition rules for unused benefits in health flexible spending arrangements of individuals called to active duty. CommentsClose CommentsPermalink

Sec. 201. Treatment of uniformed service cash remuneration as earned income. CommentsClose CommentsPermalink





Sec. 202. Suspension of 5-year period during service with the Peace Corpstate annuities for certain veterans to be disregarded in determining supplemental security income benefits. CommentsClose CommentsPermalink





Sec. 203. Exclusion of AmeriCorps benefits for purposes of determining supplemental security income eligibility and benefit amounts. CommentsClose CommentsPermalink





Sec. 204. Effective date. CommentsClose CommentsPermalink

TITLE III--REVENUE PROVISIONS

Sec. 301. Revision of tax rules on expatriationIncrease in penalty for failure to file partnership returns. CommentsClose CommentsPermalink





Sec. 302. Special enrollment option by employer health plans for members of uniform services who lose health care coverageIncrease in penalty for failure to file S corporation returns. CommentsClose CommentsPermalink





Sec. 303. Increase in minimum penalty on failure to file a return of tax. CommentsClose CommentsPermalink





Sec. 304. Increase in information return penalties. CommentsClose CommentsPermalink





Sec. 305. Revision of tax rules on expatriation. CommentsClose CommentsPermalink

TITLE IV--TAX RELIEF AND PROTECTIONS FOR MILITARY PERSONNELSEC. 101. PERMANENT EXTENSION OF QUALIFIED MORTGAGE BOND PROGRAM RULES FOR VETERANS.(a) In General- Section 143(d)(2)(D) (relating to exception) is amended by striking `in the case of bonds issued after the date of the enactment of this subparagraph and before January 1, 2008,'.(b) Effective Date- The amendment made by this section shall apply to bonds issued after December 31, 2007.SEC. 102. EXCLUSION OF CERTAIN AMOUNTS FROM INCOME FOR PURPOSES OF ELIGIBILITY FOR CERTAIN HOUSING PROVISIONS.(a) In General- The last sentence of 142(d)(2)(B) (relating to income of individuals; area median gross income) is amended to read as follows `For purposes of determining income under this subparagraph, subsections (g) and (h) of section 7872 shall not apply and any payments to a member of the Armed Forces undersection 403 of title 37, United States Code, as a basic pay allowance for housing, shall be disregarded.'.(b) Effective Date- The amendments made by this section shall apply to--(1) housing credit dollar amounts allocated after the date of the enactment of this Act, and(2) buildings placed in service after such date to the extent paragraph (1) of section 42(h) ofTECHNICAL CORRECTIONS

Sec. 401. Short title. CommentsClose CommentsPermalink





Sec. 402. Amendment related to the Tax Relief and Health Care Act of 2006. CommentsClose CommentsPermalink





Sec. 403. Amendments related to title XII of the Pension Protection Act of 2006. CommentsClose CommentsPermalink





Sec. 404. Amendments related to the Tax Increase Prevention and Reconciliation Act of 2005. CommentsClose CommentsPermalink





Sec. 405. Amendments related to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. CommentsClose CommentsPermalink





Sec. 406. Amendments related to the Energy Policy Act of 2005. CommentsClose CommentsPermalink





Sec. 407. Amendments related to the American Jobs Creation Act of 2004. CommentsClose CommentsPermalink





Sec. 408. Amendments related to the Economic Growth and Tax Relief Reconciliation Act of 2001. CommentsClose CommentsPermalink





Sec. 409. Amendments related to the Tax Relief Extension Act of 1999. CommentsClose CommentsPermalink





Sec. 410. Amendment related to the Internal Revenue Code of 1986 does not apply to such building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date.SEC. 103. PERMANENT EXTENSION OF ELECTION TO TREATService Restructuring and Reform Act of 1998. CommentsClose CommentsPermalink





Sec. 411. Clerical corrections. CommentsClose CommentsPermalink

SEC. 101. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR PURPOSES OF EARNED INCOME TAX CREDIT.

(a) In General- Clause (vi) of section 32(c)(2)(B) (defining earned income) is amended to read as follows: CommentsClose CommentsPermalink





`(vi) a taxpayer may elect to treat amounts excluded from gross income by reason of section 112 as earned income.'. CommentsClose CommentsPermalink





(b) Sunset Not Applicable- Section 105 of the Working Families Tax Relief Act of 2004 (relating to application of EGTRRA sunset to this title) shall not apply to section 104(b) of such Act. CommentsClose CommentsPermalink





(c) Effective Date- The amendment made by this section shall apply to taxable years ending after December 31, 2007. CommentsClose CommentsPermalink

SEC. 104. EXTENSION OF STATUTE OF LIMITATIONS TO FILE CLAIMS FOR REFUNDS RELATING TO DISABILITY DETERMINATIONS BY DEPARTMENT OF VETERANS AFFAIRS.(a) In General- Subsection (d) of section 6511 (relating to special rules applicable to income taxes) is amended by adding at the end the following new paragraph:`(8) SPECIAL RULES WHEN UNIFORMED SERVICES RETIRED PAY IS REDUCED AS A RESULT OF AWARD OF DISABILITY COMPENSATION-`(A) PERIOD OF LIMITATION ON FILING CLAIM- If the claim for credit or refund relates to an overpayment of tax imposed by subtitle A on account of--`(i) the reduction of uniformed services retired pay computed under section 1406 or 1407 of title 10, United States Code, or`(ii) the waiver of such pay under section 5305 of title 38 of such Code,as a result of an award of compensation under title 38 of such Code pursuant to a determination by the Secretary of Veterans Affairs, the 3-year period of limitation prescribed in subsection (a) shall be extended, for purposes of permitting a credit or refund based upon the amount of such reduction or waiver, until the end of the 1-year period beginning on the date of such determination.`(B) LIMITATION TO 5 TAXABLE YEARS- Subparagraph (A) shall not apply with respect to any taxable year which began more than 5 years before the date of such determination.'.(b) Effective Date- The amendment made by subsection2. MODIFICATION OF MORTGAGE REVENUE BONDS FOR VETERANS.

(a) shall apply to claims for credit or refund filed after the date of the enactment of this Act.(c) Transition Rules- In the case of a determination described in paragraph (8) of section 6511(d) of the Internal Revenue Code of 1986 (as added by this section) which is made by the Secretary ofQualified Mortgage Bonds Used To Finance Residences for Veterans Affairs after December 31, 2000, and on or before the date of the enactment of this Act, such paragraph--(1) shall not apply with respect to any taxable year which beganWithout Regard to First-Time Homebuyer Requirement- Subparagraph (D) of section 143(d)(2) (relating to exceptions) is amended by striking `and before January 1, 2001, and(2) shall be applied by substituting `the date of the enactment of the Defenders of Freedom Tax Relief Act of 2007' for `the date of such determination' in subparagraph (A) thereof.SEC. 105. CREDIT FOR EMPLOYER DIFFERENTIAL WAGE PAYMENTS TO EMPLOYEES WHO ARE ACTIVE DUTY MEMBERS OF THE UNIFORMED SERVICES.(a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business credits) is amended by adding at the end the following new section:`SEC. 45O. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE ACTIVE DUTY MEMBERS OF THE UNIFORMED SERVICES.`(a) General Rule- For purposes of section 38, in the case of an eligible small business employer, the differential wage payment credit for any taxable year is an amount equal to 20 percent of the sum of the eligible differential wage payments for each of the qualified employees of the taxpayer during such taxable year.`8'. CommentsClose CommentsPermalink





(b) Definitions- For purposes of this section--`(1) ELIGIBLE DIFFERENTIAL WAGE PAYMENTS- The term `eligible differential wage payments' means, with respect to each qualified employee, so much of the differential wage payments (as defined in section 3401(h)(2)) paid to such employee for the taxable year as does not exceed $20,000.`(2Increase in Bond Limitation for Alaska, Oregon, and Wisconsin- Clause (ii) of section 143(l)(3)(B) (relating to State veterans limit) is amended by striking `$25,000,000' each place it appears and inserting `$100,000,000'. CommentsClose CommentsPermalink





(c) Definition of Qualified Veteran- Paragraph (4) of section 143(l) (defining qualified veteran) is amended to read as follows: CommentsClose CommentsPermalink





`(4) QUALIFIED EMPLOYEE- The term `qualified employee' means a person who has been an employee of the taxpayer for the 91-day period immediately preceding the period for which any differential wage payment is made.`(3) ELIGIBLE SMALL BUSINESS EMPLOYER-`(A) IN GENERAL- The term `eligible small business employer' means, with respect to any taxable year, any employer which--`(i) employed an average of less that 50 employees on business days during such taxable year, and`(ii) under a written plan of the employer, provides eligible differential wage payments to every qualified employee of the employer.VETERAN- For purposes of this subsection, the term `qualified veteran' means any veteran who-- CommentsClose CommentsPermalink





`(A) served on active duty, and CommentsClose CommentsPermalink





`(B) CONTROLLED GROUPS- For purposes of subparagraph (A), all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer.`(c) Coordination With Other Credits- The amount of credit otherwise allowable under this chapter with respect to compensation paid to any employee shall be reduced by the credit determined under this section with respect to such employee.`(d) Disallowance for Failure To Comply With Employment or Reemployment Rights of Members of the Reserve Components of the Armed Forces of the United States- No credit shall be allowed under subsection (a) to a taxpayer for--`(1) any taxable year, beginning after the date of the enactment of this section, in which the taxpayer is under a final order, judgment, or other process issued or required by a district court of the United States under section 4323 of title 38 of the United States Code with respect to a violation of chapter 43 of such title, and`(2) the 2 succeeding taxable years.`(e) Certain Rules To Apply- For purposes of this section, rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.`(f) Termination- This section shall not apply to any payments madeapplied for the financing before the date 25 years after the last date on which such veteran left active service.'. CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to bonds issued after December 31, 2009.'.(b) Credit Treated as Part of General Business Credit- Section 38(b) (relating to general business credit) is amended by striking `plus' at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting `, plus', and by adding at the end of following new paragraph:`(32) the differential wage payment credit determined under section 45O(a).'.(c) No Deduction for Compensation Taken Into Account for Credit- Section 280C(a) (relating to rule for employment credits) is amended by inserting `45O(a),' after `45A(a),'.(d) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:`Sec. 45O. Employer wage credit for employees who are active duty members of the uniformed services.'.(e) Effective Date- The amendments made by this section shall apply to amounts paid after the date of the enactment of this Act.SEC. 106. PERMANENT EXTENSION OF PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS BY INDIVIDUAL CALLED TO ACTIVE DUTY.Clause (iv) of section 72(t)(2)(G) (relating to distributions from retirement plans to individuals called to active duty) is amended by striking all after `September 11, 2001' and inserting a period.SEC. 107. STATE PAYMENTS TO SERVICE MEMBERS TREATED AS QUALIFIED MILITARY BENEFITS.(a) In General- Section 134(b) (defining qualified military benefit) is amended by adding at the end the following new paragraph:`(6) CERTAIN STATE PAYMENTS- The term `qualified military benefit' includes any bonus payment by a State or political subdivision thereof to any member or former member of the uniformed services of the United States or any dependent of such member only by reason of such member's service in an combat zone (as defined in section 112(c)(2), determined without regard to the parenthetical).'.(b) Effective Date- The amendment made by this section shall apply to payments made before, on, or after the date of the enactment of this Act7. CommentsClose CommentsPermalink

SEC. 1083. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO QUALIFIED MILITARY SERVICE.

(a) Plan Qualification Requirement for Death Benefits Under USERRA-Qualified Active Military Service- Subsection (a) of section 401 (relating to requirements for qualification) is amended by inserting after paragraph (36) the following new paragraph: CommentsClose CommentsPermalink





`(37) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE MILITARY SERVICE- A trust shall not constitute a qualified trust unless the plan provides that, in the case of a participant who dies while performing qualified military service (as defined in section 414(u)), the survivors of the participant are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the plan had the participant resumed and then terminated employment on account of death.'. CommentsClose CommentsPermalink





(b) Treatment in the Case of Death or Disability Resulting From Active Military Service for Benefit Accrual Purposes- Subsection (u) of section 414 (relating to special rules relating to veterans' reemployment rights under USERRA) is amended by redesignating paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and by inserting after paragraph (8) the following new paragraph: CommentsClose CommentsPermalink





`(9) TREATMENT IN THE CASE OF DEATH OR DISABILITY RESULTING FROM ACTIVE MILITARY SERVICE- CommentsClose CommentsPermalink





`(A) IN GENERAL- For benefit accrual purposes, an employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under the terms of the plan) while performing qualified military service with respect to the employer maintaining the plan as if the individual has resumed employment in accordance with the individual's reemployment rights under chapter 43 of title 38, United States Code, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability. In the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such plan with respect to the benefit accrual requirements of paragraph (8) with respect to such individual shall be treated for purposes of paragraph (1) as if such compliance were required under such chapter 43. CommentsClose CommentsPermalink





`(B) NONDISCRIMINATION REQUIREMENT- Subparagraph (A) shall apply only if all individuals performing qualified military service with respect to the employer maintaining the plan (as determined under subsections (b), (c), (m), and (o)) who die or became disabled as a result of performing qualified military service prior to reemployment by the employer are credited with service and benefits on reasonably equivalent terms. CommentsClose CommentsPermalink





`(C) DETERMINATION OF BENEFITS- The amount of employee contributions and the amount of elective deferrals of an individual treated as reemployed under subparagraph (A) for purposes of applying paragraph (8)(C) shall be determined on the basis of the individual's average actual employee contributions or elective deferrals for the lesser of-- CommentsClose CommentsPermalink





`(i) the 12-month period of service with the employer immediately prior to qualified military service, or CommentsClose CommentsPermalink





`(ii) if service with the employer is less than such 12-month period, the actual length of continuous service with the employer.'. CommentsClose CommentsPermalink





(c) Conforming Amendments- CommentsClose CommentsPermalink





(1) Section 404(a)(2) is amended by striking `and (31)' and inserting `(31), and (37)'. CommentsClose CommentsPermalink





(2) Section 403(b) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(14) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE MILITARY SERVICE- This subsection shall not apply to an annuity contract unless such contract meets the requirements of section 401(a)(37).'. CommentsClose CommentsPermalink





(3) Section 457(g) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(4) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE MILITARY SERVICE- A plan described in paragraph (1) shall not be treated as an eligible deferred compensation plan unless such plan meets the requirements of section 401(a)(37).'. CommentsClose CommentsPermalink





(d) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- The amendments made by this section shall apply with respect to deaths and disabilities occurring on or after January 1, 2007. CommentsClose CommentsPermalink





(2) PROVISIONS RELATING TO PLAN AMENDMENTS- CommentsClose CommentsPermalink





(A) IN GENERAL- If this subparagraph applies to any plan or contract amendment, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(iii). CommentsClose CommentsPermalink





(B) AMENDMENTS TO WHICH SUBPARAGRAPH (A) APPLIES- CommentsClose CommentsPermalink





(i) IN GENERAL- Subparagraph (A) shall apply to any amendment to any plan or annuity contract which is made-- CommentsClose CommentsPermalink





(I) pursuant to the amendments made by subsection (a) or pursuant to any regulation issued by the Secretary of the Treasury under subsection (a), and CommentsClose CommentsPermalink





(II) on or before the last day of the first plan year beginning on or after January 1, 2009. CommentsClose CommentsPermalink





In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this clause shall be applied by substituting `2011' for `2009' in subclause (II). CommentsClose CommentsPermalink





(ii) CONDITIONS- This paragraph shall not apply to any amendment unless-- CommentsClose CommentsPermalink





(I) the plan or contract is operated as if such plan or contract amendment were in effect for the period described in clause (iii), and CommentsClose CommentsPermalink





(II) such plan or contract amendment applies retroactively for such period. CommentsClose CommentsPermalink





(iii) PERIOD DESCRIBED- The period described in this clause is the period-- CommentsClose CommentsPermalink





(I) beginning on the effective date specified by the plan, and CommentsClose CommentsPermalink





(II) ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted). CommentsClose CommentsPermalink

SEC. 1094. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES.

(a) Income Tax Withholding on Differential Wage Payments- CommentsClose CommentsPermalink





(1) IN GENERAL- Section 3401 (relating to definitions) is amended by adding at the end the following new subsection: CommentsClose CommentsPermalink





`(h) Differential Wage Payments to Active Duty Members of the Uniformed Services- CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of subsection (a), any differential wage payment shall be treated as a payment of wages by the employer to the employee. CommentsClose CommentsPermalink





`(2) DIFFERENTIAL WAGE PAYMENT- For purposes of paragraph (1), the term `differential wage payment' means any payment which-- CommentsClose CommentsPermalink





`(A) is made by an employer to an individual with respect to any period during which the individual is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) while on active duty for a period of more than 30 days, and CommentsClose CommentsPermalink





`(B) represents all or a portion of the wages the individual would have received from the employer if the individual were performing service for the employer.'. CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to remuneration paid after December 31, 2007. CommentsClose CommentsPermalink





(b) Treatment of Differential Wage Payments for Retirement Plan Purposes- CommentsClose CommentsPermalink





(1) PENSION PLANS- CommentsClose CommentsPermalink





(A) IN GENERAL- Section 414(u) (relating to special rules relating to veterans' reemployment rights under USERRA), as amended by this Act, is amended by redesignating paragraphs (10) and (11) as paragraphs (11) and (12), respectively, and by inserting after paragraph (9) the following section 103(b), is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(102) TREATMENT OF DIFFERENTIAL WAGE PAYMENTS- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in this paragraph, for purposes of applying this title to a retirement plan to which this subsection applies-- CommentsClose CommentsPermalink





`(i) an individual receiving a differential wage payment shall be treated as an employee of the employer making the payment, CommentsClose CommentsPermalink





`(ii) the differential wage payment shall be treated as compensation, and CommentsClose CommentsPermalink





`(iii) the plan shall not be treated as failing to meet the requirements of any provision described in paragraph (1)(C) by reason of any contribution or benefit which is based on the differential wage payment. CommentsClose CommentsPermalink





`(B) SPECIAL RULE FOR DISTRIBUTIONS- CommentsClose CommentsPermalink





`(i) IN GENERAL- Notwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services described in section 3401(h)(2)(A). CommentsClose CommentsPermalink





`(ii) LIMITATION- If an individual elects to receive a distribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution. CommentsClose CommentsPermalink





`(C) NONDISCRIMINATION REQUIREMENT- Subparagraph (A)(iii) shall apply only if all employees of an employer (as determined under subsections (b), (c), (m), and (o)) performing service in the uniformed services described in section 3401(h)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the employer, to make contributions based on the payments on reasonably equivalent terms. For purposes of applying this subparagraph, the provisions of paragraphs (3), (4), and (5) of section 410(b) shall apply. CommentsClose CommentsPermalink





`(D) DIFFERENTIAL WAGE PAYMENT- For purposes of this paragraph, the term `differential wage payment' has the meaning given such term by section 3401(h)(2).'. CommentsClose CommentsPermalink





(B) CONFORMING AMENDMENT- The heading for section 414(u) is amended by inserting `and to Differential Wage Payments to Members on Active Duty' after `USERRA'. CommentsClose CommentsPermalink





(2) DIFFERENTIAL WAGE PAYMENTS TREATED AS COMPENSATION FOR INDIVIDUAL RETIREMENT PLANS- Section 219(f)(1) (defining compensation) is amended by adding at the end the following new sentence: `The term `compensation'compensation includes any differential wage payment (as defined in section 3401(h)(2)).'. CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to years beginning after December 31, 2007. CommentsClose CommentsPermalink





(c) Provisions Relating to Plan Amendments- CommentsClose CommentsPermalink





(1) IN GENERAL- If this subsection applies to any plan or annuity contract amendment--(A), such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i), and(B) except as provided by the Secretary of the Treasury, such plan shall not fail to meet the requirements of the Internal Revenue Code of 1986 or the Employee Retirement Income Security Act of 1974 by reason of such amendment. CommentsClose CommentsPermalink





(2) AMENDMENTS TO WHICH SECTION APPLIES- CommentsClose CommentsPermalink





(A) IN GENERAL- This subsection shall apply to any amendment to any plan or annuity contract which is made-- CommentsClose CommentsPermalink





(i) pursuant to any amendment made by this sectionsubsection (b)(1), and CommentsClose CommentsPermalink





(ii) on or before the last day of the first plan year beginning on or after January 1, 2009. CommentsClose CommentsPermalink





(B) In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this subparagraph shall be applied by substituting `2011' for `2009' in clause (ii). CommentsClose CommentsPermalink





(B) CONDITIONS- This subsection shall not apply to any plan or annuity contract amendment unless-- CommentsClose CommentsPermalink





(i) during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect, and CommentsClose CommentsPermalink





(ii) such plan or contract amendment applies retroactively for such period. CommentsClose CommentsPermalink

SEC. 11005. EXTENSION OF EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.

SEC. 108. DISCLOSURE OF RETURN INFORMATION RELATING TO VETERANS PROGRAMS MADE PERMANENT.

(a) In General- Subparagraph (D) of section 6103(l)(7) (relating to disclosure of return information to Federal, State, and local agencies administering certain programs under the Social Security Act, the Food Stamp Act of 1977, or title 38, United States Code or certain housing assistance programs) is amended by striking the last sentence. CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to requests made after September 30, 2008Technical Amendment- Section 6103(l)(7)(D)(viii)(III) is amended by striking `sections 1710(a)(1)(I), 1710(a)(2), 1710(b), and 1712(a)(2)(B)' and inserting `sections 1710(a)(2)(G), 1710(a)(3), and 1710(b)'. CommentsClose CommentsPermalink

SEC. 11109. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH IRAS AND EDUCATION SAVINGS ACCOUNTS.

(a) Provision in Effect Before Pension Protection Act- Subsection (e) of section 408A (relating to qualified rollover contribution), as in effect before the amendments made by section 824 of the Pension Protection Act of 2006, is amended to read as follows: CommentsClose CommentsPermalink





`(e) Qualified Rollover Contribution- For purposes of this section-- CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `qualified rollover contribution' means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). Such term includes a rollover contribution described in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. CommentsClose CommentsPermalink





`(2) MILITARY DEATH GRATUITY- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified rollover contribution' includes a contribution to a Roth IRA maintained for the benefit of an individual made before the end of the 1-year period beginning on the date on which such individual receives an amount undersection 1477 of title 10, United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed-- CommentsClose CommentsPermalink





`(i) the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by CommentsClose CommentsPermalink





`(ii) the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9). CommentsClose CommentsPermalink





`(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT TO APPLY- Section 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A). CommentsClose CommentsPermalink





`(C) APPLICATION OF SECTION 72- For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.'. CommentsClose CommentsPermalink





(b) Provision in Effect After Pension Protection Act- Subsection (e) of section 408A, as in effect after the amendments made by section 824 of the Pension Protection Act of 2006, is amended to read as follows: CommentsClose CommentsPermalink





`(e) Qualified Rollover Contribution- For purposes of this section-- CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `qualified rollover contribution' means a rollover contribution-- CommentsClose CommentsPermalink





`(A) to a Roth IRA from another such account, CommentsClose CommentsPermalink





`(B) from an eligible retirement plan, but only if-- CommentsClose CommentsPermalink





`(i) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and CommentsClose CommentsPermalink





`(ii) in the case of any eligible retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), as applicable. CommentsClose CommentsPermalink





For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. CommentsClose CommentsPermalink





`(2) MILITARY DEATH GRATUITY- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `qualified rollover contribution' includes a contribution to a Roth IRA maintained for the benefit of an individual made before the end of the 1-year period beginning on the date on which such individual receives an amount undersection 1477 of title 10, United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed-- CommentsClose CommentsPermalink





`(i) the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by CommentsClose CommentsPermalink





`(ii) the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9). CommentsClose CommentsPermalink





`(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT TO APPLY- Section 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by the subparagraph (A). CommentsClose CommentsPermalink





`(C) APPLICATION OF SECTION 72- For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.'. CommentsClose CommentsPermalink





(c) Education Savings Accounts- Subsection (d) of section 530 is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(9) MILITARY DEATH GRATUITY- CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of this section, the term `rollover contribution' includes a contribution to a Coverdell education savings account made before the end of the 1-year period beginning on the date on which the contributor receives an amount undersection 1477 of title 10, United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed-- CommentsClose CommentsPermalink





`(i) the sum of the amounts received during such period by such contributor under such sections with respect to such person, reduced by CommentsClose CommentsPermalink





`(ii) the amounts so received which were contributed to a Roth IRA under section 408A(e)(2) or to another Coverdell education savings account. CommentsClose CommentsPermalink





`(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT TO APPLY- The last sentence of paragraph (5) shall not apply with respect to amounts treated as a rollover by the subparagraph (A). CommentsClose CommentsPermalink





`(C) APPLICATION OF SECTION 72- For purposes of applying section 72 in the case of a distribution which is includible in gross income under paragraph (1), the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.'. CommentsClose CommentsPermalink





(d) Effective Dates- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided by paragraphs (2) and (3), the amendments made by this section shall apply with respect to deaths from injuries occurring on or after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) APPLICATION OF AMENDMENTS TO DEATHS FROM INJURIES OCCURRING ON OR AFTER OCTOBER 7, 2001, AND BEFORE ENACTMENT- The amendments made by this section shall apply to any contribution made pursuant to section 408A(e)(2) or 530(d)(5) of the Internal Revenue Code of 1986, as amended by this Act, with respect to amounts received undersection 1477 of title 10, United States Code, or under section 1967 of title 38 of such Code, for deaths from injuries occurring on or after October 7, 2001, and before the date of the enactment of this Act if such contribution is made not later than 1 year after the date of the enactment of this Act. CommentsClose CommentsPermalink





(3) PENSION PROTECTION ACT CHANGES- Section 408A(e)(1) of the Internal Revenue Code of 1986 (as in effect after the amendments made by subsection (b)) shall apply to taxable years beginning after December 31, 2007. CommentsClose CommentsPermalink

SEC. 202110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE PEACE CORPS.

(a) In General- Subsection (d) of section 121 (relating to special rules) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(12) PEACE CORPS- CommentsClose CommentsPermalink





`(A) IN GENERAL- At the election of an individual with respect to a property, the running of the 5-year period described in subsections (a) and (c)(1)(B) and paragraph (7) of this subsection with respect to such property shall be suspended during any period that such individual or such individual's spouse is serving outside the United States-- CommentsClose CommentsPermalink





`(i) on qualified official extended duty (as defined in paragraph (9)(C)) as an employee of the Peace Corps, or CommentsClose CommentsPermalink





`(ii) as an enrolled volunteer or volunteer leader under section 5 or 6 (as the case may be) of the Peace Corps Act (22 U.S.C. 2504, 2505). CommentsClose CommentsPermalink





`(B) APPLICABLE RULES- For purposes of subparagraph (A), rules similar to the rules of subparagraphs (B) and (D) shall apply.'. CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2007. CommentsClose CommentsPermalink

TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME

TITLE III--REVENUE PROVISIONS

SEC. 301. INCREASE IN PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS.

SEC. 305. REVISION OF TAX RULES ON EXPATRIATION.

(a) In General- Subpart A of part II of subchapter N of chapter 1 is amended by inserting after section 877 the following new section: CommentsClose CommentsPermalink

`SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

`(a) General Rules- For purposes of this subtitle-- CommentsClose CommentsPermalink





`(1) MARK TO MARKET- All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value. CommentsClose CommentsPermalink





`(2) RECOGNITION OF GAIN OR LOSS- In the case of any sale under paragraph (1)-- CommentsClose CommentsPermalink





`(A) notwithstanding any other provision of this title, any gain arising from such sale shall be taken into account for the taxable year of the sale, and CommentsClose CommentsPermalink





`(B) any loss arising from such sale shall be taken into account for the taxable year of the sale to the extent otherwise provided by this title, except that section 1091 shall not apply to any such loss. CommentsClose CommentsPermalink





Proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain or loss taken into account under the preceding sentence, determined without regard to paragraph (3). CommentsClose CommentsPermalink





`(3) EXCLUSION FOR CERTAIN GAIN- CommentsClose CommentsPermalink





`(A) IN GENERAL- The amount which would (but for this paragraph) be includible in the gross income of any individual by reason of paragraph (1) shall be reduced (but not below zero) by $600,000. CommentsClose CommentsPermalink





`(B) ADJUSTMENT FOR INFLATION- CommentsClose CommentsPermalink





`(i) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2008, the dollar amount in subparagraph (A) shall be increased by an amount equal to-- CommentsClose CommentsPermalink





`(I) such dollar amount, multiplied by CommentsClose CommentsPermalink





`(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2007' for `calendar year 1992' in subparagraph (B) thereof. CommentsClose CommentsPermalink





`(ii) ROUNDING- If any amount as adjusted under clause (i) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000. CommentsClose CommentsPermalink





`(b) Election To Defer Tax- CommentsClose CommentsPermalink





`(1) IN GENERAL- If the taxpayer elects the application of this subsection with respect to any property treated as sold by reason of subsection (a), the time for payment of the additional tax attributable to such property shall be extended until the due date of the return for the taxable year in which such property is disposed of (or, in the case of property disposed of in a transaction in which gain is not recognized in whole or in part, until such other date as the Secretary may prescribe). CommentsClose CommentsPermalink





`(2) DETERMINATION OF TAX WITH RESPECT TO PROPERTY- For purposes of paragraph (1), the additional tax attributable to any property is an amount which bears the same ratio to the additional tax imposed by this chapter for the taxable year solely by reason of subsection (a) as the gain taken into account under subsection (a) with respect to such property bears to the total gain taken into account under subsection (a) with respect to all property to which subsection (a) applies. CommentsClose CommentsPermalink





`(3) TERMINATION OF EXTENSION- The due date for payment of tax may not be extended under this subsection later than the due date for the return of tax imposed by this chapter for the taxable year which includes the date of death of the expatriate (or, if earlier, the time that the security provided with respect to the property fails to meet the requirements of paragraph (4), unless the taxpayer corrects such failure within the time specified by the Secretary). CommentsClose CommentsPermalink





`(4) SECURITY- CommentsClose CommentsPermalink





`(A) IN GENERAL- No election may be made under paragraph (1) with respect to any property unless adequate security is provided with respect to such property. CommentsClose CommentsPermalink





`(B) ADEQUATE SECURITY- For purposes of subparagraph (A), security with respect to any property shall be treated as adequate security if-- CommentsClose CommentsPermalink





`(i) it is a bond which is furnished to, and accepted by, the Secretary, which is conditioned on the payment of tax (and interest thereon), and which meets the requirements of section 6325, or CommentsClose CommentsPermalink





`(ii) it is another form of security for such payment (including letters of credit) that meets such requirements as the Secretary may prescribe. CommentsClose CommentsPermalink





`(5) WAIVER OF CERTAIN RIGHTS- No election may be made under paragraph (1) unless the taxpayer makes an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of any tax imposed by reason of this section. CommentsClose CommentsPermalink





`(6) ELECTIONS- An election under paragraph (1) shall only apply to property described in the election and, once made, is irrevocable. CommentsClose CommentsPermalink





`(7) INTEREST- For purposes of section 6601, the last date for the payment of tax shall be determined without regard to the election under this subsection. CommentsClose CommentsPermalink





`(c) Exception for Certain Property- Subsection (a) shall not apply to-- CommentsClose CommentsPermalink





`(1) any deferred compensation item (as defined in subsection (d)(4)), CommentsClose CommentsPermalink





`(2) any specified tax deferred account (as defined in subsection (e)(2)), and CommentsClose CommentsPermalink





`(3) any interest in a nongrantor trust (as defined in subsection (f)(3)). CommentsClose CommentsPermalink





`(d) Treatment of Deferred Compensation Items- CommentsClose CommentsPermalink





`(1) WITHHOLDING ON ELIGIBLE DEFERRED COMPENSATION ITEMS- CommentsClose CommentsPermalink





`(A) IN GENERAL- In the case of any eligible deferred compensation item, the payor shall deduct and withhold from any taxable payment to a covered expatriate with respect to such item a tax equal to 30 percent thereof. CommentsClose CommentsPermalink





`(B) TAXABLE PAYMENT- For purposes of subparagraph (A), the term `taxable payment' means with respect to a covered expatriate any payment to the extent it would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States. A deferred compensation item shall be taken into account as a payment under the preceding sentence when such item would be so includible. CommentsClose CommentsPermalink





`(2) OTHER DEFERRED COMPENSATION ITEMS- In the case of any deferred compensation item which is not an eligible deferred compensation item-- CommentsClose CommentsPermalink





`(A)(i) with respect to any deferred compensation item to which clause (ii) does not apply, an amount equal to the present value of the covered expatriate's accrued benefit shall be treated as having been received by such individual on the day before the expatriation date as a distribution under the plan, and CommentsClose CommentsPermalink





`(ii) with respect to any deferred compensation item referred to in paragraph (4)(D), the rights of the covered expatriate to such item shall be treated as becoming transferable and not subject to a substantial risk of forfeiture on the day before the expatriation date, CommentsClose CommentsPermalink





`(B) no early distribution tax shall apply by reason of such treatment, and CommentsClose CommentsPermalink





`(C) appropriate adjustments shall be made to subsequent distributions from the plan to reflect such treatment. CommentsClose CommentsPermalink





`(3) ELIGIBLE DEFERRED COMPENSATION ITEMS- For purposes of this subsection, the term `eligible deferred compensation item' means any deferred compensation item with respect to which-- CommentsClose CommentsPermalink





`(A) the payor of such item is-- CommentsClose CommentsPermalink





`(i) a United States person, or CommentsClose CommentsPermalink





`(ii) a person who is not a United States person but who elects to be treated as a United States person for purposes of paragraph (1) and meets such requirements as the Secretary may provide to ensure that the payor will meet the requirements of paragraph (1), and CommentsClose CommentsPermalink





`(B) the covered expatriate-- CommentsClose CommentsPermalink





`(i) notifies the payor of his status as a covered expatriate, and CommentsClose CommentsPermalink





`(ii) makes an irrevocable waiver of any right to claim any reduction under any treaty with the United States in withholding on such item. CommentsClose CommentsPermalink





`(4) DEFERRED COMPENSATION ITEM- For purposes of this subsection, the term `deferred compensation item' means-- CommentsClose CommentsPermalink





`(A) any interest in a plan or arrangement described in section 219(g)(5), CommentsClose CommentsPermalink





`(B) any interest in a foreign pension plan or similar retirement arrangement or program, CommentsClose CommentsPermalink





`(C) any item of deferred compensation, and CommentsClose CommentsPermalink





`(D) any property, or right to property, which the individual is entitled to receive in connection with the performance of services to the extent not previously taken into account under section 83 or in accordance with section 83. CommentsClose CommentsPermalink





`(5) EXCEPTION- Paragraphs (1) and (2) shall not apply to any deferred compensation item which is attributable to services performed outside the United States while the covered expatriate was not a citizen or resident of the United States. CommentsClose CommentsPermalink





`(6) SPECIAL RULES- CommentsClose CommentsPermalink





`(A) APPLICATION OF WITHHOLDING RULES- Rules similar to the rules of subchapter B of chapter 3 shall apply for purposes of this subsection. CommentsClose CommentsPermalink





`(B) APPLICATION OF TAX- Any item subject to the withholding tax imposed under paragraph (1) shall be subject to tax under section 871. CommentsClose CommentsPermalink





`(C) COORDINATION WITH OTHER WITHHOLDING REQUIREMENTS- Any item subject to withholding under paragraph (1) shall not be subject to withholding under section 1441 or chapter 24. CommentsClose CommentsPermalink





`(e) Treatment of Specified Tax Deferred Accounts- CommentsClose CommentsPermalink





`(1) ACCOUNT TREATED AS DISTRIBUTED- In the case of any interest in a specified tax deferred account held by a covered expatriate on the day before the expatriation date-- CommentsClose CommentsPermalink





`(A) the covered expatriate shall be treated as receiving a distribution of his entire interest in such account on the day before the expatriation date, CommentsClose CommentsPermalink





`(B) no early distribution tax shall apply by reason of such treatment, and CommentsClose CommentsPermalink





`(C) appropriate adjustments shall be made to subsequent distributions from the account to reflect such treatment. CommentsClose CommentsPermalink





`(2) SPECIFIED TAX DEFERRED ACCOUNT- For purposes of paragraph (1), the term `specified tax deferred account' means an individual retirement plan (as defined in section 7701(a)(37)) other than any arrangement described in subsection (k) or (p) of section 408, a qualified tuition program (as defined in section 529), a Coverdell education savings account (as defined in section 530), a health savings account (as defined in section 223), and an Archer MSA (as defined in section 220). CommentsClose CommentsPermalink





`(f) Special Rules for Nongrantor Trusts- CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of a distribution (directly or indirectly) of any property from a nongrantor trust to a covered expatriate-- CommentsClose CommentsPermalink





`(A) the trustee shall deduct and withhold from such distribution an amount equal to 30 percent of the taxable portion of the distribution, and CommentsClose CommentsPermalink





`(B) if the fair market value of such property exceeds its adjusted basis in the hands of the trust, gain shall be recognized to the trust as if such property were sold to the expatriate at its fair market value. CommentsClose CommentsPermalink





`(2) TAXABLE PORTION- For purposes of this subsection, the term `taxable portion' means, with respect to any distribution, that portion of the distribution which would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States. CommentsClose CommentsPermalink





`(3) NONGRANTOR TRUST- For purposes of this subsection, the term `nongrantor trust' means the portion of any trust that the individual is not considered the owner of under subpart E of part I of subchapter J. The determination under the preceding sentence shall be made immediately before the expatriation date. CommentsClose CommentsPermalink





`(4) SPECIAL RULES RELATING TO WITHHOLDING- For purposes of this subsection-- CommentsClose CommentsPermalink





`(A) rules similar to the rules of subsection (d)(6) shall apply, and CommentsClose CommentsPermalink





`(B) the covered expatriate shall be treated as having waived any right to claim any reduction under any treaty with the United States in withholding on any distribution to which paragraph (1)(A) applies unless the covered expatriate agrees to such other treatment as the Secretary determines appropriate. CommentsClose CommentsPermalink





`(5) APPLICATION- This subsection shall apply to a nongrantor trust only if the covered expatriate was a beneficiary of the trust on the day before the expatriation date. CommentsClose CommentsPermalink





`(g) Definitions and Special Rules Relating to Expatriation- For purposes of this section-- CommentsClose CommentsPermalink





`(1) COVERED EXPATRIATE- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `covered expatriate' means an expatriate who meets the requirements of subparagraph (A), (B), or (C) of section 877(a)(2). CommentsClose CommentsPermalink





`(B) EXCEPTIONS- An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if-- CommentsClose CommentsPermalink





`(i) the individual-- CommentsClose CommentsPermalink





`(I) became at birth a citizen of the United States and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and CommentsClose CommentsPermalink





`(II) has been a resident of the United States (as defined in section 7701(b)(1)(A)(ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or CommentsClose CommentsPermalink





`(ii)(I) the individual's relinquishment of United States citizenship occurs before such individual attains age 18 1/2 , and CommentsClose CommentsPermalink





`(II) the individual has been a resident of the United States (as so defined) for not more than 10 taxable years before the date of relinquishment. CommentsClose CommentsPermalink





`(C) COVERED EXPATRIATES ALSO SUBJECT TO TAX AS CITIZENS OR RESIDENTS- In the case of any covered expatriate who is subject to tax as a citizen or resident of the United States for any period beginning after the expatriation date, such individual shall not be treated as a covered expatriate during such period for purposes of subsections (d)(1) and (f) and section 2801. CommentsClose CommentsPermalink





`(2) EXPATRIATE- The term `expatriate' means-- CommentsClose CommentsPermalink





`(A) any United States citizen who relinquishes his citizenship, and CommentsClose CommentsPermalink





`(B) any long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)). CommentsClose CommentsPermalink





`(3) EXPATRIATION DATE- The term `expatriation date' means-- CommentsClose CommentsPermalink





`(A) the date an individual relinquishes United States citizenship, or CommentsClose CommentsPermalink





`(B) in the case of a long-term resident of the United States, the date on which the individual ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)). CommentsClose CommentsPermalink





`(4) RELINQUISHMENT OF CITIZENSHIP- A citizen shall be treated as relinquishing his United States citizenship on the earliest of-- CommentsClose CommentsPermalink





`(A) the date the individual renounces his United States nationality before a diplomatic or consular officer of the United States pursuant to paragraph (5) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)), CommentsClose CommentsPermalink





`(B) the date the individual furnishes to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)), CommentsClose CommentsPermalink





`(C) the date the United States Department of State issues to the individual a certificate of loss of nationality, or CommentsClose CommentsPermalink





`(D) the date a court of the United States cancels a naturalized citizen's certificate of naturalization. CommentsClose CommentsPermalink





Subparagraph (A) or (B) shall not apply to any individual unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department of State. CommentsClose CommentsPermalink





`(5) LONG-TERM RESIDENT- The term `long-term resident' has the meaning given to such term by section 877(e)(2). CommentsClose CommentsPermalink





`(6) EARLY DISTRIBUTION TAX- The term `early distribution tax' means any increase in tax imposed under section 72(t), 220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4). CommentsClose CommentsPermalink





`(h) Other Rules- CommentsClose CommentsPermalink





`(1) TERMINATION OF DEFERRALS, ETC- In the case of any covered expatriate, notwithstanding any other provision of this title-- CommentsClose CommentsPermalink





`(A) any time period for acquiring property which would result in the reduction in the amount of gain recognized with respect to property disposed of by the taxpayer shall terminate on the day before the expatriation date, and CommentsClose CommentsPermalink





`(B) any extension of time for payment of tax shall cease to apply on the day before the expatriation date and the unpaid portion of such tax shall be due and payable at the time and in the manner prescribed by the Secretary. CommentsClose CommentsPermalink





`(2) STEP-UP IN BASIS- Solely for purposes of determining any tax imposed by reason of subsection (a), property which was held by an individual on the date the individual first became a resident of the United States (within the meaning of section 7701(b)) shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable. CommentsClose CommentsPermalink





`(3) COORDINATION WITH SECTION 684- If the expatriation of any individual would result in the recognition of gain under section 684, this section shall be applied after the application of section 684. CommentsClose CommentsPermalink





`(i) Regulations- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.'. CommentsClose CommentsPermalink





(b) Tax on Gifts and Bequests Received by United States Citizens and Residents From Expatriates- CommentsClose CommentsPermalink





(1) IN GENERAL- Subtitle B (relating to estate and gift taxes) is amended by inserting after chapter 14 the following new chapter: CommentsClose CommentsPermalink

`CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

`Sec. 2801. Imposition of tax. CommentsClose CommentsPermalink

`SEC. 2801. IMPOSITION OF TAX.

`(a) In General- If, during any calendar year, any United States citizen or resident receives any covered gift or bequest, there is hereby imposed a tax equal to the product of-- CommentsClose CommentsPermalink





`(1) the highest rate of tax specified in the table contained in section 2001(c) as in effect on the date of such receipt (or, if greater, the highest rate of tax specified in the table applicable under section 2502(a) as in effect on the date), and CommentsClose CommentsPermalink





`(2) the value of such covered gift or bequest. CommentsClose CommentsPermalink





`(b) Tax To Be Paid by Recipient- The tax imposed by subsection (a) on any covered gift or bequest shall be paid by the person receiving such gift or bequest. CommentsClose CommentsPermalink





`(c) Exception for Certain Gifts- Subsection (a) shall apply only to the extent that the value of covered gifts and bequests received by any person during the calendar year exceeds $10,000the dollar amount in effect under section 2503(b) for such calendar year. CommentsClose CommentsPermalink





`(d) Tax Reduced by Foreign Gift or Estate Tax- The tax imposed by subsection (a) on any covered gift or bequest shall be reduced by the amount of any gift or estate tax paid to a foreign country with respect to such covered gift or bequest. CommentsClose CommentsPermalink





`(e) Covered Gift or Bequest- CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of this chapter, the term `covered gift or bequest' means-- CommentsClose CommentsPermalink





`(A) any property acquired by gift directly or indirectly from an individual who, at the time of such acquisition, is a covered expatriate, and CommentsClose CommentsPermalink





`(B) any property acquired directly or indirectly by reason of the death of an individual who, immediately before such death, was a covered expatriate. CommentsClose CommentsPermalink





`(2) EXCEPTIONS FOR TRANSFERS OTHERWISE SUBJECT TO ESTATE OR GIFT TAX- Such term shall not include-- CommentsClose CommentsPermalink





`(A) any property shown on a timely filed return of tax imposed by chapter 12 which is a taxable gift by the covered expatriate, and CommentsClose CommentsPermalink





`(B) any property included in the gross estate of the covered expatriate for purposes of chapter 11 and shown on a timely filed return of tax imposed by chapter 11 of the estate of the covered expatriate. CommentsClose CommentsPermalink





`(3) EXCEPTIONS FOR TRANSFERS TO SPOUSE OR CHARITY- Such term shall not include any property with respect to which a deduction would be allowed under section 2055, 2056, 2522, or 2523, whichever is appropriate, if the decedent or donor were a United States person. CommentsClose CommentsPermalink





`(4) TRANSFERS IN TRUST- CommentsClose CommentsPermalink





`(A) DOMESTIC TRUSTS- In the case of a covered gift or bequest made to a domestic trust-- CommentsClose CommentsPermalink





`(i) subsection (a) shall apply in the same manner as if such trust were a United States citizen, and CommentsClose CommentsPermalink





`(ii) the tax imposed by subsection (a) on such gift or bequest shall be paid by such trust. CommentsClose CommentsPermalink





`(B) FOREIGN TRUSTS- CommentsClose CommentsPermalink





`(i) IN GENERAL- In the case of a covered gift or bequest made to a foreign trust, subsection (a) shall apply to any distribution attributable to such gift or bequest from such trust (whether from income or corpus) to a United States citizen or resident in the same manner as if such distribution were a covered gift or bequest. CommentsClose CommentsPermalink





`(ii) DEDUCTION FOR TAX PAID BY RECIPIENT- There shall be allowed as a deduction under section 164 the amount of tax imposed by this section which is paid or accrued by a United States citizen or resident by reason of a distribution from a foreign trust, but only to the extent such tax is imposed on the portion of such distribution which is included in the gross income of such citizen or resident. CommentsClose CommentsPermalink





`(iii) ELECTION TO BE TREATED AS DOMESTIC TRUST- Solely for purposes of this section, a foreign trust may elect to be treated as a domestic trust. Such an election may be revoked with the consent of the Secretary. CommentsClose CommentsPermalink





`(f) Covered Expatriate- For purposes of this section, the term `covered expatriate' has the meaning given to such term by section 877A(g)(1).'. CommentsClose CommentsPermalink





(2) CLERICAL AMENDMENT- The table of chapters for subtitle B is amended by inserting after the item relating to chapter 14 the following new item: CommentsClose CommentsPermalink

`Chapter 15. Gifts and Bequests From Expatriates.'.

(c) Definition of Termination of United States Citizenship- CommentsClose CommentsPermalink





(1) IN GENERAL- Section 7701(a) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(50) TERMINATION OF UNITED STATES CITIZENSHIP- CommentsClose CommentsPermalink





`(A) IN GENERAL- An individual shall not cease to be treated as a United States citizen before the date on which the individual's citizenship is treated as relinquished under section 877A(g)(4). CommentsClose CommentsPermalink





`(B) DUAL CITIZENS- Under regulations prescribed by the Secretary, subparagraph (A) shall not apply to an individual who became at birth a citizen of the United States and a citizen of another country.'. CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS- CommentsClose CommentsPermalink





(A) Paragraph (1) of section 877(e) is amended to read as follows: CommentsClose CommentsPermalink





`(1) IN GENERAL- Any long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)) shall be treated for purposes of this section and sections 2107, 2501, and 6039G in the same manner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement.'. CommentsClose CommentsPermalink





(B) Paragraph (6) of section 7701(b) is amended by adding at the end the following flush sentence: CommentsClose CommentsPermalink





`An individual shall cease to be treated as a lawful permanent resident of the United States if such individual commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the foreign country, does not waive the benefits of such treaty applicable to residents of the foreign country, and notifies the Secretary of the commencement of such treatment.'. CommentsClose CommentsPermalink





(C) Section 7701 is amended by striking subsection (n) and by redesignating subsections (o) and (p) as subsections (n) and (o), respectively. CommentsClose CommentsPermalink





(d) Information Returns- Section 6039G is amended-- CommentsClose CommentsPermalink





(1) by inserting `or 877A' after `section 877(b)' in subsection (a), and CommentsClose CommentsPermalink





(2) by inserting `or 877A' after `section 877(a)' in subsection (d). CommentsClose CommentsPermalink





(e) Clerical Amendment- The table of sections for subpart A of part II of subchapter N of chapter 1 is amended by inserting after the item relating to section 877 the following new item: CommentsClose CommentsPermalink





`Sec. 877A. Tax responsibilities of expatriation.'. CommentsClose CommentsPermalink





(f) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in this subsection, the amendments made by this section shall apply to expatriates (as defined in section 877A(g) of the Internal Revenue Code of 1986, as added by this section) whose expatriation date (as so defined) is on or after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) GIFTS AND BEQUESTS- Chapter 15 of the Internal Revenue Code of 1986 (as added by subsection (b)) shall apply to covered gifts and bequests (as defined in section 2801 of such Code, as so added) received on or after the date of the enactment of this Act from transferors whose expatriation date is on or after such date of enactment. CommentsClose CommentsPermalink

SEC. 302. SPECIAL ENROLLMENT OPTION BY EMPLOYER HEALTH PLANS FOR MEMBERS OF UNIFORM SERVICES WHO LOSE402. AMENDMENT RELATED TO THE TAX RELIEF AND HEALTH CARE COVERAGE.(a) In General- Section 9801(f) (relating to special enrollment periods) is amended by adding at the end the following ACT OF 2006.

(a) Amendment Related to Section 1201 of the Act- Subparagraph (D) of section 408(d)(8) is amended by striking `all amounts distributed from all individual retirement plans were treated as 1 contract under paragraph (2)(A) for purposes of determining the inclusion of such distribution under section 72' and inserting `all amounts in all individual retirement plans of the individual were distributed during such taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible'. CommentsClose CommentsPermalink





(b) Amendment Related to Section 1203 of the Act- Subsection (d) of section 1366 is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(4) APPLICATION OF LIMITATION ON CHARITABLE CONTRIBUTIONS- In the case of any charitable contribution of property to which the second sentence of section 1367(a)(2) applies, paragraph (1) shall not apply to the extent of the excess (if any) of-- CommentsClose CommentsPermalink





`(A) the shareholder's pro rata share of such contribution, over CommentsClose CommentsPermalink





`(B) the shareholder's pro rata share of the adjusted basis of such property.'. CommentsClose CommentsPermalink





(c) Amendment Related to Section 1215 of the Act- Subclause (I) of section 170(e)(7)(D)(i) is amended by striking `related' and inserting `substantial and related'. CommentsClose CommentsPermalink





(d) Amendments Related to Section 1218 of the Act- CommentsClose CommentsPermalink





(1) Section 2055 is amended by striking subsection (g) and by redesignating subsection (h) as subsection (g). CommentsClose CommentsPermalink





(2) Subsection (e) of section 2522 is amended-- CommentsClose CommentsPermalink





(A) by striking paragraphs (2) and (4), CommentsClose CommentsPermalink





(B) by redesignating paragraph (3) as paragraph (2), and CommentsClose CommentsPermalink





(C) by adding at the end of paragraph (2), as so redesignated, the following new subparagraph: CommentsClose CommentsPermalink





`(C) INITIAL FRACTIONAL CONTRIBUTION- For purposes of this paragraph, the term `initial fractional contribution' means, with respect to any donor, the first gift of an undivided portion of the donor's entire interest in any tangible personal property for which a deduction is allowed under subsection (a) or (b).'. CommentsClose CommentsPermalink





(e) Amendments Related to Section 1219 of the Act- CommentsClose CommentsPermalink





(1) Paragraph (2) of section 6695A(a) is amended by inserting `a substantial estate or gift tax valuation understatement (within the meaning of section 6662(g)),' before `or a gross valuation misstatement'. CommentsClose CommentsPermalink





(2) Paragraph (1) of section 6696(d) is amended by striking `or under section 6695' and inserting `, section 6695, or 6695A'. CommentsClose CommentsPermalink





(f) Amendment Related to Section 1221 of the Act- Subparagraph (A) of section 4940(c)(4) is amended to read as follows: CommentsClose CommentsPermalink





`(A) There shall not be taken into account any gain or loss from the sale or other disposition of property to the extent that such gain or loss is taken into account for purposes of computing the tax imposed by section 511.'. CommentsClose CommentsPermalink





(g) Amendment Related to Section 1225 of the Act- CommentsClose CommentsPermalink





(1) Subsection (b) of section 6104 is amended-- CommentsClose CommentsPermalink





(A) by striking `Information' in the heading, and CommentsClose CommentsPermalink





(B) by adding at the end the following: `Any annual return which is filed under section 6011 by an organization described in section 501(c)(3) and which relates to any tax imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc., organizations) shall be treated for purposes of this subsection in the same manner as if furnished under section 6033.'. CommentsClose CommentsPermalink





(2) Clause (ii) of section 6104(d)(1)(A) is amended to read as follows: CommentsClose CommentsPermalink





`(ii) any annual return which is filed under section 6011 by an organization described in section 501(c)(3) and which relates to any tax imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc., organizations),'. CommentsClose CommentsPermalink





(3) Paragraph (2) of section 6104(d) is amended by striking `section 6033' and inserting `section 6011 or 6033'. CommentsClose CommentsPermalink





(h) Amendment Related to Section 1231 of the Act- Subsection (b) of section 4962 is amended by striking `or D' and inserting `D, or G'. CommentsClose CommentsPermalink





(i) Amendment Related to Section 1242 of the Act- CommentsClose CommentsPermalink





(1) Subclause (II) of section 4958(c)(3)(A)(i) is amended by striking `paragraph (1), (2), or (4) of section 509(a)' and inserting `subparagraph (C)(ii)'. CommentsClose CommentsPermalink





(2) Clause (ii) of section 4958(c)(3)(C) is amended to read as follows: CommentsClose CommentsPermalink





`(ii) EXCEPTION- Such term shall not include-- CommentsClose CommentsPermalink





`(I) any organization described in paragraph (1), (2), or (4) of section 509(a), and CommentsClose CommentsPermalink





`(II) any organization which is treated as described in such paragraph (2) by reason of the last sentence of section 509(a) and which is a supported organization (as defined in section 509(f)(3)) of the organization to which subparagraph (A) applies.'. CommentsClose CommentsPermalink





(j) Effective Date- The amendments made by this section shall take effect as if included in the provisions of the Pension Protection Act of 2006 to which they relate. CommentsClose CommentsPermalink

(a) Amendments Related to Section 103 of the Act- Paragraph (6) of section 954(c) is amended by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following new subparagraph: CommentsClose CommentsPermalink





`(B) EXCEPTION- Subparagraph (A) shall not apply in the case of any interest, rent, or royalty to the extent such interest, rent, or royalty creates (or increases) a deficit which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation.'. CommentsClose CommentsPermalink





(b) Amendments Related to Section 202 of the Act- CommentsClose CommentsPermalink





(1) Subparagraph (A) of section 355(b)(2) is amended to read as follows: CommentsClose CommentsPermalink





`(A) it is engaged in the active conduct of a trade or business,'. CommentsClose CommentsPermalink





(2) Paragraph (3) of section 355(b) is amended to read as follows: CommentsClose CommentsPermalink





`(3) LOSS OF MILITARY HEALTH COVERAGE-`SPECIAL RULES FOR DETERMINING ACTIVE CONDUCT IN THE CASE OF AFFILIATED GROUPS- CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of determining whether a corporation meets the requirements of paragraph (2)(A), all members of such corporation's separate affiliated group shall be treated as one corporation. CommentsClose CommentsPermalink





`(B) SEPARATE AFFILIATED GROUP- For purposes of this paragraph, the term `separate affiliated group' means, with respect to any corporation, the affiliated group which would be determined under section 1504(a) if such corporation were the common parent and section 1504(b) did not apply. CommentsClose CommentsPermalink





`(C) TREATMENT OF TRADE OR BUSINESS CONDUCTED BY ACQUIRED MEMBER- If a corporation became a member of a separate affiliated group as a result of one or more transactions in which gain or loss was recognized in whole or in part, any trade or business conducted by such corporation (at the time that such corporation became such a member) shall be treated for purposes of paragraph (2) as acquired in a transaction in which gain or loss was recognized in whole or in part. CommentsClose CommentsPermalink





`(D) REGULATIONS- The Secretary shall prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which provide for the proper application of subparagraphs (B), (C), and (D) of paragraph (2), and modify the application of subsection (a)(3)(B), in connection with the application of this paragraph.'. CommentsClose CommentsPermalink





(3) The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made by section 202 of the Tax Increase Prevention and Reconciliation Act of 2005 and by section 410 of division A of the Tax Relief and Health Care Act of 2006 had never been enacted. CommentsClose CommentsPermalink





(c) Amendment Related to Section 515 of the Act- Subsection (f) of section 911 is amended to read as follows: CommentsClose CommentsPermalink





`(f) Determination of Tax Liability- CommentsClose CommentsPermalink





`(1) IN GENERAL- If, for any taxable year, any amount is excluded from gross income of a taxpayer under subsection (a), then, notwithstanding sections 1 and 55-- CommentsClose CommentsPermalink





`(A) if such taxpayer has taxable income for such taxable year, the tax imposed by section 1 for such taxable year shall be equal to the excess (if any) of-- CommentsClose CommentsPermalink





`(i) the tax which would be imposed by section 1 for such taxable year if the taxpayer's taxable income were increased by the amount excluded under subsection (a) for such taxable year, over CommentsClose CommentsPermalink





`(ii) the tax which would be imposed by section 1 for such taxable year if the taxpayer's taxable income were equal to the amount excluded under subsection (a) for such taxable year, and CommentsClose CommentsPermalink





`(B) if such taxpayer has a taxable excess (as defined in section 55(b)(1)(A)(ii)) for such taxable year, the amount determined under the first sentence of section 55(b)(1)(A)(i) for such taxable year shall be equal to the excess (if any) of-- CommentsClose CommentsPermalink





`(i) the amount which would be determined under such sentence for such taxable year (subject to the limitation of section 55(b)(3)) if the taxpayer's taxable excess (as so defined) were increased by the amount excluded under subsection (a) for such taxable year, over CommentsClose CommentsPermalink





`(ii) the amount which would be determined under such sentence for such taxable year if the taxpayer's taxable excess (as so defined) were equal to the amount excluded under subsection (a) for such taxable year. CommentsClose CommentsPermalink





`(2) SPECIAL RULES- CommentsClose CommentsPermalink





`(A) REGULAR TAX- In applying section 1(h) for purposes of determining the tax under paragraph (1)(A)(i) for any taxable year in which, without regard to this subsection, the taxpayer's net capital gain exceeds taxable income (hereafter in this subparagraph referred to as the capital gain excess)-- CommentsClose CommentsPermalink





`(i) the taxpayer's net capital gain (determined without regard to section 1(h)(11)) shall be reduced (but not below zero) by such capital gain excess, CommentsClose CommentsPermalink





`(ii) the taxpayer's qualified dividend income shall be reduced by so much of such capital gain excess as exceeds the taxpayer's net capital gain (determined without regard to section 1(h)(11) and the reduction under clause (i)), and CommentsClose CommentsPermalink





`(iii) adjusted net capital gain, unrecaptured section 1250 gain, and 28-percent rate gain shall each be determined after increasing the amount described in section 1(h)(4)(B) by such capital gain excess. CommentsClose CommentsPermalink





`(B) ALTERNATIVE MINIMUM TAX- In applying section 55(b)(3) for purposes of determining the tax under paragraph (1)(B)(i) for any taxable year in which, without regard to this subsection, the taxpayer's net capital gain exceeds the taxable excess (as defined in section 55(b)(1)(A)(ii))-- CommentsClose CommentsPermalink





`(i) the rules of subparagraph (A) shall apply, except that such subparagraph shall be applied by substituting `the taxable excess (as defined in section 55(b)(1)(A)(ii))' for `taxable income', and CommentsClose CommentsPermalink





`(ii) the reference in section 55(b)(3)(B) to the excess described in section 1(h)(1)(B) shall be treated as a reference to such excess as determined under the rules of subparagraph (A) for purposes of determining the tax under paragraph (1)(A)(i). CommentsClose CommentsPermalink





`(C) DEFINITIONS- Terms used in this paragraph which are also used in section 1(h) shall have the respective meanings given such terms by section 1(h), except that in applying subparagraph (B) the adjustments under part VI of subchapter A shall be taken into account.'. CommentsClose CommentsPermalink





(d) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall take effect as if included in the provisions of the Tax Increase Prevention and Reconciliation Act of 2005 to which they relate. CommentsClose CommentsPermalink





(2) MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER SECTION 355- CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding paragraphs (1) and (2), a group health plan shall permit an employee who is eligible, but not enrolled, for coverage underExcept as otherwise provided in this paragraph, the amendments made by subsection (b) shall apply to distributions made after May 17, 2006. CommentsClose CommentsPermalink





(B) TRANSITION RULE- The amendments made by subsection (b) shall not apply to any distribution pursuant to a transaction which is-- CommentsClose CommentsPermalink





(i) made pursuant to an agreement which was binding on May 17, 2006, and at all times thereafter, CommentsClose CommentsPermalink





(ii) described in a ruling request submitted to the Internal Revenue Service on or before such date, or CommentsClose CommentsPermalink





(iii) described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission. CommentsClose CommentsPermalink





(C) ELECTION OUT OF TRANSITION RULE- Subparagraph (B) shall not apply if the distributing corporation elects not to have such subparagraph apply to distributions of such corporation. Any such election, once made, shall be irrevocable. CommentsClose CommentsPermalink





(D) SPECIAL RULE FOR CERTAIN PRE-ENACTMENT DISTRIBUTIONS- For purposes of determining the continued qualification under section 355(b)(2)(A) of the Internal Revenue Code of 1986 of distributions made on or before May 17, 2006, as a result of an acquisition, disposition, or other restructuring after such date, such distribution shall be treated as made on the date of such acquisition, disposition, or restructuring for purposes of applying subparagraphs (A) through (C) of this paragraph. The preceding sentence shall only apply with respect to the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coveragecorporation that undertakes such acquisition, disposition, or other restructuring, and only if such application results in continued qualification under section 355(b)(2)(A) of such Code. CommentsClose CommentsPermalink





(3) AMENDMENT RELATED TO SECTION 515 OF THE ACT- The amendment made by subsection (c) shall apply to taxable years beginning after December 31, 2006. CommentsClose CommentsPermalink

(a) Amendment Related to Section 1306 of the Act- Paragraph (2) of section 45J(b) is amended to read as follows: CommentsClose CommentsPermalink





`(2) AMOUNT OF NATIONAL LIMITATION- The aggregate amount of national megawatt capacity limitation allocated by the Secretary under paragraph (3) shall not exceed 6,000 megawatts.'. CommentsClose CommentsPermalink





(b) Amendments Related to Section 1342 of the Act- CommentsClose CommentsPermalink





(1) So much of subsection (b) of section 30C as precedes paragraph (1) thereof is amended to read as follows: CommentsClose CommentsPermalink





`(b) Limitation- The credit allowed under subsection (a) with respect to all qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year at a location shall not exceed--'. CommentsClose CommentsPermalink





(2) Subsection (c) of section 30C is amended to read as follows: CommentsClose CommentsPermalink





`(c) Qualified Alternative Fuel Vehicle Refueling Property- For purposes of this section, the term `qualified alternative fuel vehicle refueling property' has the same meaning as the term `qualified clean-fuel vehicle refueling property' would have under section 179A if-- CommentsClose CommentsPermalink





`(1) paragraph (1) of section 179A(d) did not apply to property installed on property which is used as the principal residence (within the meaning of section 121) of the taxpayer, and CommentsClose CommentsPermalink





`(2) only the following were treated as clean-burning fuels for purposes of section 179A(d): CommentsClose CommentsPermalink





`(A) Any fuel at least 85 percent of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen. CommentsClose CommentsPermalink





`(B) Any mixture-- CommentsClose CommentsPermalink





`(i) which consists of two or more of the following: biodiesel (as defined in section 40A(d)(1)), diesel fuel (as defined in section 4083(a)(3)), or kerosene, and CommentsClose CommentsPermalink





`(ii) at least 20 percent of the volume of which consists of biodiesel (as so defined) determined without regard to any kerosene in such mixture.'. CommentsClose CommentsPermalink





(c) Amendments Related to Section 1351 of the Act- CommentsClose CommentsPermalink





(1) Paragraph (3) of section 41(a) is amended by inserting `for energy research' before the period at the end. CommentsClose CommentsPermalink





(2) Paragraph (6) of section 41(f) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(E) ENERGY RESEARCH- The term `energy research' does not include any research which is not qualified research.'. CommentsClose CommentsPermalink





(d) Amendments Related to Section 1362 of the Act- CommentsClose CommentsPermalink





(1)(A) Paragraph (1) of section 4041(d) is amended by adding at the end the following new sentence: `No tax shall be imposed under the terms of the plan if each of the following conditions is met:`(i) The employee or dependent, by reason of service in the uniformed servicepreceding sentence on the sale or use of any liquid if tax was imposed with respect to such liquid under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.'. CommentsClose CommentsPermalink





(B) Paragraph (3) of section 4042(b) is amended to read as follows: CommentsClose CommentsPermalink





`(3) EXCEPTION FOR FUEL ON WHICH LEAKING UNDERGROUND STORAGE TANK TRUST FUND FINANCING RATE SEPARATELY IMPOSED- The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.'. CommentsClose CommentsPermalink





(C) Notwithstanding section 6430 of the Internal Revenue Code of 1986, a refund, credit, or payment may be made under subchapter B of chapter 65 of such Code for taxes imposed with respect to any liquid after September 30, 2005, and before the date of the enactment of this Act under section 4041(d)(1) or 4042 of such Code at the Leaking Underground Storage Tank Trust Fund financing rate to the extent that tax was imposed with respect to such liquid under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate. CommentsClose CommentsPermalink





(2)(A) Paragraph (5) of section 4041(d) is amended-- CommentsClose CommentsPermalink





(i) by striking `(other than with respect to any sale for export under paragraph (3) thereof)', and CommentsClose CommentsPermalink





(ii) by adding at the end the following new sentence: `The preceding sentence shall not apply with respect to subsection (g)(3) and so much of subsection (g)(1) as relates to vessels (within the meaning ofsection 4303 of title 38, United States Code), was covered under a Federal health care benefit program (including coverage under section 4221(d)(3)) employed in foreign trade or trade between the United States and any of its possessions.'. CommentsClose CommentsPermalink





(B) Section 4082 is amended-- CommentsClose CommentsPermalink





(i) by striking `(other than such tax at the Leaking Underground Storage Tank Trust Fund financing rate imposed in all cases other than for export)' in subsection (a), and CommentsClose CommentsPermalink





(ii) by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, and by inserting after subsection (e) the following new subsection: CommentsClose CommentsPermalink





`(f) Exception for Leaking Underground Storage Tank Trust Fund Financing Rate- CommentsClose CommentsPermalink





`(1) IN GENERAL- Subsection (a) shall not apply to the tax imposed under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate. CommentsClose CommentsPermalink





`(2) EXCEPTION FOR EXPORT, ETC- Paragraph (1) shall not apply with respect to any fuel if the Secretary determines that such fuel is destined for export or for use by the purchaser as supplies for vessels (within the meaning of section 4221(d)(3)) employed in foreign trade or trade between the United States and any of its possessions.'. CommentsClose CommentsPermalink





(C) Subsection (e) of section 4082 is amended-- CommentsClose CommentsPermalink





(i) by striking `an aircraft, the rate of tax under section 4081(a)(2)(A)(iii) shall be zero.' and inserting `an aircraft-- CommentsClose CommentsPermalink





`(1) the rate of tax under section 4081(a)(2)(A)(iii) shall be zero, and CommentsClose CommentsPermalink





`(2) if such aircraft is employed in foreign trade or trade between the United States and any of its possessions, the increase in such rate under section 4081(a)(2)(B) shall be zero.'; and CommentsClose CommentsPermalink





(ii) by moving the last sentence flush with the margin of such subsection (following the paragraph (2) added by clause (i)). CommentsClose CommentsPermalink





(D) Section 6430 is amended to read as follows: CommentsClose CommentsPermalink

`No refunds, credits, or payments shall be made under this subchapter for any tax imposed at the Leaking Underground Storage Tank Trust Fund financing rate, except in the case of fuels-- CommentsClose CommentsPermalink





`(1) which are exempt from tax under section 4081(a) by reason of section 4082(f)(2), CommentsClose CommentsPermalink





`(2) which are exempt from tax under section 4041(d) by reason of the last sentence of paragraph (5) thereof, or CommentsClose CommentsPermalink





`(3) with respect to which the TRICARE program (as that term is defined in section 1072 of title 10, United States Code) or by reason of entitlement to health care benefits under the laws administered by the Secretary of Veterans Affairs or as a member of the uniformed services on active duty), and the employee or dependent loses eligibility for such coverage.`(ii) The employee or dependent irate increase under section 4081(a)(2)(B) is zero by reason of section 4082(e)(2).'. CommentsClose CommentsPermalink





(3) Paragraph (5) of section 4041(d) is amended by inserting `(b)(1)(A),' after `subsections'. CommentsClose CommentsPermalink





(e) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise eligible to enroll for coverage underprovided in this subsection, the amendments made by this section shall take effect as if included in the provisions of the Energy Policy Act of 2005 to which they relate. CommentsClose CommentsPermalink





(2) NONAPPLICATION OF EXEMPTION FOR OFF-HIGHWAY BUSINESS USE- The amendment made by subsection (d)(3) shall apply to fuel sold for use or used after the date of the enactment of this Act. CommentsClose CommentsPermalink





(3) AMENDMENT MADE BY THE SAFETEA-LU- The amendment made by subsection (d)(2)(C)(ii) shall take effect as if included in section 11161 of the SAFETEA-LU. CommentsClose CommentsPermalink

(a) Amendments Related to Section 339 of the Act- CommentsClose CommentsPermalink





(1)(A) Section 45H is amended by striking subsection (d) and by redesignating subsections (e), (f), and (g) as subsections (d), (e), and (f), respectively. CommentsClose CommentsPermalink





(B) Subsection (d) of section 280C is amended to read as follows: CommentsClose CommentsPermalink





`(d) Credit for Low Sulfur Diesel Fuel Production- The deductions otherwise allowed under this chapter for the taxable year shall be reduced by the amount of the terms of the plan.`(iii) The employee requests such coverage not later than 90 days after the date on which the coverage described in credit determined for the taxable year under section 45H(a).'. CommentsClose CommentsPermalink





(C) Subsection (a) of section 1016 is amended by striking paragraph (31) and by redesignating paragraphs (32) through (37) as paragraphs (31) through (36), respectively. CommentsClose CommentsPermalink





(2)(A) Section 45H, as amended by paragraph (1), is amended by adding at the end the following new subsection: CommentsClose CommentsPermalink





`(g) Election to Not Take Credit- No credit shall be determined under subsection (a) for the taxable year if the taxpayer elects not to have subsection (a) apply to such taxable year.'. CommentsClose CommentsPermalink





(B) Subsection (m) of section 6501 is amended by inserting `45H(g),' after `45C(d)(4),'. CommentsClose CommentsPermalink





(3)(A) Subsections (b)(1)(A), (c)(2), (e)(1), and (e)(2) of section 45H (as amended by paragraph (1)) and section 179B(a) are each amended by striking `qualified capital costs' and inserting `qualified costs'. CommentsClose CommentsPermalink





(B) The heading of paragraph (2) of section 45H(c) is amended by striking `CAPITAL'. CommentsClose CommentsPermalink





(C) Subsection (a) of section 179B is amended by inserting `and which are properly chargeable to capital account' before the period at the end. CommentsClose CommentsPermalink





(b) Amendments Related to Section 710 of the Act- CommentsClose CommentsPermalink





(1) Clause (ii) of section 45(c)(3)(A) is amended by striking `which is segregated from other waste materials and'. CommentsClose CommentsPermalink





(2) Subparagraph (B) of section 45(d)(2) is amended by inserting `and' at the end of clause (i), by striking clause (ii), and by redesignating clause (iii) as clause (ii). CommentsClose CommentsPermalink





(c) Amendments Related to Section 848 of the Act- CommentsClose CommentsPermalink





(1) Paragraph (2) of section 470(c) is amended to read as follows: CommentsClose CommentsPermalink





`(2) TAX-EXEMPT USE PROPERTY- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `tax-exempt use property' has the meaning given to such term by section 168(h), except that such section shall be applied-- CommentsClose CommentsPermalink





`(i) without regard to paragraphs (1)(C) and (3) thereof, and CommentsClose CommentsPermalink





`(ii) as if section 197 intangible property (as defined in section 197), and property described in paragraph (1)(B) or (2) of section 167(f), were tangible property. CommentsClose CommentsPermalink





`(B) EXCEPTION FOR PARTNERSHIPS- Such term shall not include any property which would (but for this subparagraph) be tax-exempt use property solely by reason of section 168(h)(6). CommentsClose CommentsPermalink





`(C) CROSS REFERENCE- For treatment of partnerships as leases to which section 168(h) applies, see section 7701(e).'. CommentsClose CommentsPermalink





(2) Subparagraph (A) of section 470(d)(1) is amended by striking `(at any time during the lease term)' and inserting `(at all times during the lease term)'. CommentsClose CommentsPermalink





(d) Amendments Related to Section 888 of the Act- CommentsClose CommentsPermalink





(1) Subparagraph (A) of section 1092(a)(2) is amended by striking `and' at the end of clause (ii), by redesignating clause (iii) as clause (iv), and by inserting after clause (ii) the following new clause: CommentsClose CommentsPermalink





`(iii) if the application of clause (ii) does not result in an increase in the basis of any offsetting position in the identified straddle, the basis of each of the offsetting positions in the identified straddle shall be increased in a manner which-- CommentsClose CommentsPermalink





`(I) is reasonable, consistent with the purposes of this paragraph, and consistently applied by the taxpayer, and CommentsClose CommentsPermalink





`(II) results in an aggregate increase in the basis of such offsetting positions which is equal to the loss described in clause (ii), and'. CommentsClose CommentsPermalink





(2)(A) Subparagraph (B) of section 1092(a)(2) is amended by adding at the end the following flush sentence: CommentsClose CommentsPermalink





`A straddle shall be treated as clearly identified for purposes of clause (i) terminated.`only if such identification includes an identification of the positions in the straddle which are offsetting with respect other positions in the straddle.'. CommentsClose CommentsPermalink





(B) Subparagraph (A) of section 1092(a)(2) is amended-- CommentsClose CommentsPermalink





(i) by striking `identified positions' in clause (i) and inserting `positions', CommentsClose CommentsPermalink





(ii) by striking `identified position' in clause (ii) and inserting `position', and CommentsClose CommentsPermalink





(iii) by striking `identified offsetting positions' in clause (ii) and inserting `offsetting positions'. CommentsClose CommentsPermalink





(C) Subparagraph (B) of section 1092(a)(3) is amended by striking `identified offsetting position' and inserting `offsetting position'. CommentsClose CommentsPermalink





(3) Paragraph (2) of section 1092(a) is amended by redesignating subparagraph (C) as subparagraph (D) and inserting after subparagraph (B)EFFECTIVE DATE OF COVERAGE- Coverage requested under subparagraph (A)(iii) the following new subparagraph: CommentsClose CommentsPermalink





`(C) APPLICATION TO LIABILITIES AND OBLIGATIONS- Except as otherwise provided by the Secretary, rules similar to the rules of clauses (ii) and (iii) of subparagraph (A) shall apply for purposes of this paragraph with respect to any position which is, or has been, a liability or obligation.'. CommentsClose CommentsPermalink





(4) Subparagraph (D) of section 1092(a)(2), as redesignated by paragraph (3), is amended by inserting `the rules for the application of this section to a position which is or has been a liability or obligation, methods of loss allocation which satisfy the requirements of subparagraph (A)(iii),' before `and the ordering rules'. CommentsClose CommentsPermalink





(e) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 to which they relate. CommentsClose CommentsPermalink





(2) IDENTIFICATION REQUIREMENT OF AMENDMENT RELATED TO SECTION 888 OF THE AMERICAN JOBS CREATION ACT OF 2004- The amendment made by subsection (d)(2)(A) shall apply to straddles acquired after the date of the enactment of this Act. CommentsClose CommentsPermalink

(a) In General- CommentsClose CommentsPermalink





(1) Paragraph (5) of section 21(e) is amended by striking `section 152(e)(3)(A)' in the flush matter after subparagraph (B) and inserting `section 152(e)(4)(A)'. CommentsClose CommentsPermalink





(2) Paragraph (3) of section 25C(c) is amended by striking `section 3280' and inserting `part 3280'. CommentsClose CommentsPermalink





(3) Paragraph (2) of section 26(b) is amended by redesignating subparagraphs (S) and (T) as subparagraphs (U) and (V), respectively, and by inserting after subparagraph (R) the following new subparagraphs: CommentsClose CommentsPermalink





`(S) sections 106(e)(3)(A)(ii), 223(b)(8)(B)(i)(II), and 408(d)(9)(D)(i)(II) (relating to certain failures to maintain high deductible health plan coverage), CommentsClose CommentsPermalink





`(T) section 170(o)(3)(B) (relating to recapture of certain deductions for fractional gifts),'. CommentsClose CommentsPermalink





(4) Subsection (a) of section 34 is amended-- CommentsClose CommentsPermalink





(A) in paragraph (1), by striking `with respect to gasoline used during the taxable year on a farm for farming purposes', CommentsClose CommentsPermalink





(B) in paragraph (2), by striking `with respect to gasoline used during the taxable year (A) otherwise than as a fuel in a highway vehicle or (B) in vehicles while engaged in furnishing certain public passenger land transportation service', and CommentsClose CommentsPermalink





(C) in paragraph (3), by striking `with respect to fuels used for nontaxable purposes or resold during the taxable year'. CommentsClose CommentsPermalink





(5) Paragraph (2) of section 35(d) is amended-- CommentsClose CommentsPermalink





(A) by striking `paragraph (2) or (4) of', and CommentsClose CommentsPermalink





(B) by striking `(within the meaning of section 152(e)(1))' and inserting `(as defined in section 152(e)(4)(A))'. CommentsClose CommentsPermalink





(6) Subsection (b) of section 38 is amended-- CommentsClose CommentsPermalink





(A) by striking `and' each place it appears at the end of any paragraph, CommentsClose CommentsPermalink





(B) by striking `plus' each place it appears at the end of any paragraph, and CommentsClose CommentsPermalink





(C) by inserting `plus' at the end of paragraph (30). CommentsClose CommentsPermalink





(7) Paragraphs (2) and (3) of section 45L(c) are each amended by striking `section 3280' and inserting `part 3280'. CommentsClose CommentsPermalink





(8) Subsection (c) of section 48 is amended by striking `subsection' in the text preceding paragraph (1) and inserting `section'. CommentsClose CommentsPermalink





(9) Paragraphs (1)(B) and (2)(B) of section 48(c) are each amended by striking `paragraph (1)' and inserting `subsection (a)'. CommentsClose CommentsPermalink





(10) Clause (ii) of section 48A(d)(4)(B) is amended by striking `subsection' both places it appears. CommentsClose CommentsPermalink





(11) The last sentence of section 125(b)(2) is amended by striking `last sentence' and inserting `second sentence'. CommentsClose CommentsPermalink





(12) Subclause (II) of section 167(g)(8)(C)(ii) is amended by striking `section 263A(j)(2)' and inserting `section 263A(i)(2)'. CommentsClose CommentsPermalink





(13)(A) Clause (vii) of section 170(b)(1)(A) is amended by striking `subparagraph (E)' and inserting `subparagraph (F)'. CommentsClose CommentsPermalink





(B) Clause (ii) of section 170(e)(1)(B) is amended by striking `subsection (b)(1)(E)' and inserting `subsection (b)(1)(F)'. CommentsClose CommentsPermalink





(C) Clause (i) of section 1400S(a)(2)(A) is amended by striking `subparagraph (F)' and inserting `subparagraph (G)'. CommentsClose CommentsPermalink





(D) Subparagraph (A) of section 4942(i)(1) is amended by striking `section 170(b)(1)(E)(ii)' and inserting `section 170(b)(1)(F)(ii)'. CommentsClose CommentsPermalink





(14) Subclause (II) of section 170(e)(1)(B)(i) is amended by inserting `, but without regard to clause (ii) thereof' after `paragraph (7)(C)'. CommentsClose CommentsPermalink





(15)(A) Subparagraph (A) of section 170(o)(1) and subparagraph (A) of section 2522(e)(1) are each amended by striking `all interest in the property is' and inserting `all interests in the property are'. CommentsClose CommentsPermalink





(B) Section 170(o)(3)(A)(i), and section 2522(e)(2)(A)(i) (as redesignated by section 403(d)(2)), are each amended-- CommentsClose CommentsPermalink





(i) by striking `interest' and inserting `interests', and CommentsClose CommentsPermalink





(ii) by striking `before' and inserting `on or before'. CommentsClose CommentsPermalink





(16)(A) Subparagraph (C) of section 852(b)(4) is amended to read as follows: CommentsClose CommentsPermalink





`(C) DETERMINATION OF HOLDING PERIODS- For purposes of this paragraph, in determining the period for which the taxpayer has held any share of stock-- CommentsClose CommentsPermalink





`(i) the rules of paragraphs (3) and (4) of section 246(c) shall apply, and CommentsClose CommentsPermalink





`(ii) there shall not be taken into account any day which is more than 6 months after the date on which such share becomes ex-dividend.'. CommentsClose CommentsPermalink





(B) Subparagraph (B) of section 857(b)(8) is amended to read as follows: CommentsClose CommentsPermalink





`(B) DETERMINATION OF HOLDING PERIODS- For purposes of this paragraph, in determining the period for which the taxpayer has held any share of stock or beneficial interest-- CommentsClose CommentsPermalink





`(i) the rules of paragraphs (3) and (4) of section 246(c) shall apply, and CommentsClose CommentsPermalink





`(ii) there shall not be taken into account any day which is more than 6 months after the date on which such share or interest becomes ex-dividend.'. CommentsClose CommentsPermalink





(17) Paragraph (2) of section 856(l) is amended by striking the last sentence and inserting the following: `For purposes of subparagraph (B), securities described in subsection (m)(2)(A) shall not be taken into account.'. CommentsClose CommentsPermalink





(18) Subparagraph (F) of section 954(c)(1) is amended to read as follows: CommentsClose CommentsPermalink





`(F) INCOME FROM NOTIONAL PRINCIPAL CONTRACTS- CommentsClose CommentsPermalink





`(i) IN GENERAL- Net income from notional principal contracts. CommentsClose CommentsPermalink





`(ii) COORDINATION WITH OTHER CATEGORIES OF FOREIGN PERSONAL HOLDING COMPANY INCOME- Any item of income, gain, deduction, or loss from a notional principal contract entered into for purposes of hedging any item described in any preceding subparagraph shall not be taken into account for purposes of this subparagraph but shall be taken into account under such other subparagraph.'. CommentsClose CommentsPermalink





(19) Paragraph (1) of section 954(c) is amended by redesignating subparagraph (I) as subparagraph (H). CommentsClose CommentsPermalink





(20) Paragraph (33) of section 1016(a), as redesignated by section 407(a)(1)(C), is amended by striking `section 25C(e)' and inserting `section 25C(f)'. CommentsClose CommentsPermalink





(21) Paragraph (36) of section 1016(a), as redesignated by section 407(a)(1)(C), is amended by striking `section 30C(f)' and inserting `section 30C(e)(1)'. CommentsClose CommentsPermalink





(22) Subparagraph (G) of section 1260(c)(2) is amended by adding `and' at the end. CommentsClose CommentsPermalink





(23)(A) Section 1297 is amended by striking subsection (d) and by redesignating subsections (e) and (f) as subsections (d) and (e), respectively. CommentsClose CommentsPermalink





(B) Subparagraph (G) of section 1260(c)(2) is amended by striking `subsection (e)' and inserting `subsection (d)'. CommentsClose CommentsPermalink





(C) Subparagraph (B) of section 1298(a)(2) is amended by striking `Section 1297(e)' and inserting `Section 1297(d)'. CommentsClose CommentsPermalink





(24) Paragraph (1) of section 1362(f) is amended-- CommentsClose CommentsPermalink





(A) by striking `, section 1361(b)(3)(B)(ii), or section 1361(c)(1)(A)(ii)' and inserting `or section 1361(b)(3)(B)(ii)', and CommentsClose CommentsPermalink





(B) by striking `, section 1361(b)(3)(C), or section 1361(c)(1)(D)(iii)' in subparagraph (B) and inserting `or section 1361(b)(3)(C)'. CommentsClose CommentsPermalink





(25) Paragraph (2) of section 1400O is amended by striking `under of' and inserting `under'. CommentsClose CommentsPermalink





(26) The table of sections for part II of subchapter Y of chapter 1 is amended by adding at the end the following new item: CommentsClose CommentsPermalink





`Sec. 1400T. Special rules for mortgage revenue bonds.'. CommentsClose CommentsPermalink





(27) Subsection (b) of section 4082 is amended to read as follows: CommentsClose CommentsPermalink





`(b) Nontaxable Use- For purposes of this section, the term `nontaxable use' means-- CommentsClose CommentsPermalink





`(1) any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax, CommentsClose CommentsPermalink





`(2) any use in a train, and CommentsClose CommentsPermalink





`(3) any use described in section 4041(a)(1)(C)(iii)(II). CommentsClose CommentsPermalink





The term `nontaxable use' does not include the use of kerosene in an aircraft and such term shall not include any use described in section 6421(e)(2)(C).'. CommentsClose CommentsPermalink





(28) Paragraph (4) of section 4101(a) (relating to registration in event of change of ownership) is redesignated as paragraph (5). CommentsClose CommentsPermalink





(29) Paragraph (6) of section 4965(c) is amended by striking `section 4457(e)(1)(A)' and inserting `section 457(e)(1)(A)'. CommentsClose CommentsPermalink





(30) Subpart C of part II of subchapter A of chapter 51 is amended by redesignating section 5432 (relating to recordkeeping by wholesale dealers) as section 5121. CommentsClose CommentsPermalink





(31) Paragraph (2) of section 5732(c), as redesignated by section 11125(b)(20)(A) of the SAFETEA-LU, is amended by striking `this subpart' and inserting `this subchapter'. CommentsClose CommentsPermalink





(32) Subsection (b) of section 6046 is amended-- CommentsClose CommentsPermalink





(A) by striking `subsection (a)(1)' and inserting `subsection (a)(1)(A)', and CommentsClose CommentsPermalink





(B) by striking `paragraph (2) or (3) of subsection (a)' and inserting `subparagraph (B) or (C) of subsection (a)(1)'. CommentsClose CommentsPermalink





(33)(A) Subparagraph (A) of section 6103(b)(5) is amended by striking `the Canal Zone,'. CommentsClose CommentsPermalink





(B) Section 7651 is amended by striking paragraph (4) and by redesignating paragraph (5) as paragraph (4). CommentsClose CommentsPermalink





(34) Subparagraph (A) of section 6211(b)(4) is amended by striking `and 34' and inserting `34, and 35'. CommentsClose CommentsPermalink





(35) Subparagraphs (A) and (B) of section 6230(a)(3) are each amended by striking `section 6013(e)' and inserting `section 6015'. CommentsClose CommentsPermalink





(36) Paragraph (3) of section 6427(e) (relating to termination), as added by section 11113 of the SAFETEA-LU, is redesignated as paragraph (5) and moved after paragraph (4). CommentsClose CommentsPermalink





(37) Clause (ii) of section 6427(l)(4)(A) is amended by striking `section 4081(a)(2)(iii)' and inserting `section 4081(a)(2)(A)(iii)'. CommentsClose CommentsPermalink





(38)(A) Section 6427, as amended by section 1343(b)(1) of the Energy Policy Act of 2005, is amended by striking subsection (p) (relating to gasohol used in noncommercial aviation) and redesignating subsection (q) as subsection (p). CommentsClose CommentsPermalink





(B) The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made by paragraph (2) of section 11151(a) of the SAFETEA-LU had never been enacted. CommentsClose CommentsPermalink





(39) Subsection (a) of section 6695A is amended by striking `then such person' in paragraph (2) and inserting the following: CommentsClose CommentsPermalink





`then such person'. CommentsClose CommentsPermalink





(40) Subparagraph (C) of section 6707A(e)(2) is amended by striking `section 6662A(e)(2)(C)' and inserting `section 6662A(e)(2)(B)'. CommentsClose CommentsPermalink





(41)(A) Paragraph (3) of section 9002 is amended by striking `section 309(a)(1)' and inserting `section 306(a)(1)'. CommentsClose CommentsPermalink





(B) Paragraph (1) of section 9004(a) is amended by striking `section 320(b)(1)(B)' and inserting `section 315(b)(1)(B)'. CommentsClose CommentsPermalink





(C) Paragraph (3) of section 9032 is amended by striking `section 309(a)(1)' and inserting `section 306(a)(1)'. CommentsClose CommentsPermalink





(D) Subsection (b) of section 9034 is amended by striking `section 320(b)(1)(A)' and inserting `section 315(b)(1)(A)'. CommentsClose CommentsPermalink





(42) Section 9006 is amended by striking `Comptroller General' each place it appears and inserting `Commission'. CommentsClose CommentsPermalink





(43) Subsection (c) of section 9503 is amended by redesignating paragraph (7) (relating to transfers from the trust fund for certain aviation fuels taxes) as paragraph (6). CommentsClose CommentsPermalink





(44) Paragraph (1) of section 1301(g) of the Energy Policy Act of 2005 is amended by striking `shall take effect of the date of the enactment' and inserting `shall become effective not later than the first day of the first month after the date of such request.'take effect on the date of the enactment'. CommentsClose CommentsPermalink





(45) The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made by section 1(a) ofPublic Law 109-433 had never been enacted. CommentsClose CommentsPermalink





(b) Clerical Amendments Related to the Tax Relief and Health Care Act of 2006- CommentsClose CommentsPermalink





(1) AMENDMENT RELATED TO SECTION 209 OF DIVISION A OF THE ACT- Paragraph (3) of section 168(l) is amended by striking `enzymatic'. CommentsClose CommentsPermalink





(2) AMENDMENTS RELATED TO SECTION 419 OF DIVISION A OF THE ACT- CommentsClose CommentsPermalink





(A) Clause (iv) of section 6724(d)(1)(B) is amended by inserting `or (h)(1)' after `section 6050H(a)'. CommentsClose CommentsPermalink





(B) Subparagraph (K) of section 6724(d)(2) is amended by inserting `or (h)(2)' after `section 6050H(d)'. CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the provision of the Tax Relief and Health Care Act of 2006 to which they relate. CommentsClose CommentsPermalink





(c) Clerical Amendments Related to the Gulf Opportunity Zone Act of 2005- CommentsClose CommentsPermalink





(1) AMENDMENTS RELATED TO SECTION 402 OF THE ACT- Subparagraph (B) of section 24(d)(1) is amended-- CommentsClose CommentsPermalink





(A) by striking `the excess (if any) of' in the matter preceding clause (i) and inserting `the greater of', and CommentsClose CommentsPermalink





(B) by striking `section' in clause (ii)(II) and inserting `section 32'. CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the provisions of the Gulf Opportunity Zone Act of 2005 to which they relate. CommentsClose CommentsPermalink





(d) Clerical Amendments Related to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users- CommentsClose CommentsPermalink





(1) AMENDMENTS RELATED TO SECTION 11163 OF THE ACT- Subparagraph (C) of section 6416(a)(4) is amended-- CommentsClose CommentsPermalink





(A) by striking `ultimate vendor' and all that follows through `has certified' and inserting `ultimate vendor or credit card issuer has certified', and CommentsClose CommentsPermalink





(B) by striking `all ultimate purchasers of the vendor' and all that follows through `are certified' and inserting `all ultimate purchasers of the vendor or credit card issuer are certified'. CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the provisions of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users to which they relate. CommentsClose CommentsPermalink





(e) Clerical Amendments Related to the Energy Policy Act of 2005- CommentsClose CommentsPermalink





(1) AMENDMENT RELATED TO SECTION 1344 OF THE ACT- Subparagraph (B) of section 6427(e)(5), as redesignated by subsection (a)(36), is amended by striking `2006' and inserting `2008'. CommentsClose CommentsPermalink





(2) AMENDMENTS RELATED TO SECTION 1351 OF THE ACT- Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) are each amended by striking `qualified research expenses and basic research payments' and inserting `qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums,'. CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the provisions of the Energy Policy Act of 2005 to which they relate. CommentsClose CommentsPermalink





(f) Clerical Amendments Related to the American Jobs Creation Act of 2004- CommentsClose CommentsPermalink





(1) AMENDMENT RELATED TO SECTION 301 OF THE ACT- Section 9502 is amended by striking subsection (e) and redesignating subsection (f) as subsection (e). CommentsClose CommentsPermalink





(2) AMENDMENT RELATED TO SECTION 413 OF THE ACT- Subsection (b) of section 1298 is amended by striking paragraph (7) and by redesignating paragraphs (8) and (9) as paragraphs (7) and (8), respectively. CommentsClose CommentsPermalink





(3) AMENDMENT RELATED TO SECTION 895 OF THE ACT- Clause (iv) of section 904(f)(3)(D) is amended by striking `a controlled group' and inserting `an affiliated group'. CommentsClose CommentsPermalink





(4) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 to which they relate. CommentsClose CommentsPermalink





(g) Clerical Amendments Related to the FSC Repeal and Extraterritorial Income Exclusion Act of 2000- CommentsClose CommentsPermalink





(1) Subclause (I) of section 56(g)(4)(C)(ii) is amended by striking `921' and inserting `921 (as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)'. CommentsClose CommentsPermalink





(2) Clause (iv) of section 54(g)(4)(C) is amended by striking `a cooperative described in section 927(a)(4)' and inserting `an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products'. CommentsClose CommentsPermalink





(3) Paragraph (4) of section 245(c) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(C) FSC- The term `FSC' has the meaning given such term by section 922.'. CommentsClose CommentsPermalink





(4) Subsection (c) of section 245 is amended by inserting at the end the following new paragraph: CommentsClose CommentsPermalink





`(5) REFERENCES TO PRIOR LAW- Any reference in this subsection to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.'. CommentsClose CommentsPermalink





(5) Paragraph (4) of section 275(a) is amended by striking `if' and all that follows and inserting `if the taxpayer chooses to take to any extent the benefits of section 901.'. CommentsClose CommentsPermalink





(6)(A) Subsection (a) of section 291 is amended by striking paragraph (4) and by redesignating paragraph (5) as paragraph (4). CommentsClose CommentsPermalink





(B) Paragraph (1) of section 291(c) is amended by striking `subsection (a)(5)' and inserting `subsection (a)(4)'. CommentsClose CommentsPermalink





(7)(A) Paragraph (4) of section 441(b) is amended by striking `FSC or'. CommentsClose CommentsPermalink





(B) Subsection (h) of section 441 is amended-- CommentsClose CommentsPermalink





(i) by striking `FSC or' each place it appears, and CommentsClose CommentsPermalink





(ii) by striking `FSC's and' in the heading thereof. CommentsClose CommentsPermalink





(8) Subparagraph (B) of section 884(d)(2) is amended by inserting before the comma `(as in effect before their repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)'. CommentsClose CommentsPermalink





(9) Section 901 is amended by striking subsection (h). CommentsClose CommentsPermalink





(10) Clause (v) of section 904(d)(2)(B) is amended-- CommentsClose CommentsPermalink





(A) by inserting `and' at the end of subclause (I), by striking subclause (II), and by redesignating subclause (III) as subclause (II), CommentsClose CommentsPermalink





(B) by striking `a FSC (or a former FSC)' in subclause (II) (as so redesignated) and inserting `a former FSC (as defined in section 922)', and CommentsClose CommentsPermalink





(C) by adding at the end the following: CommentsClose CommentsPermalink





`Any reference in subclause (II) to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.'. CommentsClose CommentsPermalink





(11) Subsection (b) of section 906 is amended by striking paragraph (5) and redesignating paragraphs (6) and (7) as paragraphs (5) and (6), respectively. CommentsClose CommentsPermalink





(12) Subparagraph (B) of section 936(f)(2) is amended by striking `FSC or'. CommentsClose CommentsPermalink





(13) Section 951 is amended by striking subsection (c) and by redesignating subsection (d) as subsection (c). CommentsClose CommentsPermalink





(14) Subsection (b) of section 952 is amended by striking the second sentence. CommentsClose CommentsPermalink





(15)(A) Paragraph (2) of section 956(c) is amended-- CommentsClose CommentsPermalink





(i) by striking subparagraph (I) and by redesignating subparagraphs (J) through (M) as subparagraphs (I) through (L), respectively, and CommentsClose CommentsPermalink





(ii) by striking `subparagraphs (J), (K), and (L)' in the flush sentence at the end and inserting `subparagraphs (I), (J), and (K)'. CommentsClose CommentsPermalink





(B) Clause (ii) of section 954(c)(2)(C) is amended by striking `section 956(c)(2)(J)' and inserting `section 956(c)(2)(I)'. CommentsClose CommentsPermalink





(16) Paragraph (1) of section 992(a) is amended by striking subparagraph (E), by inserting `and' at the end of subparagraph (C), and by striking `, and' at the end of subparagraph (D) and inserting a period. CommentsClose CommentsPermalink





(17) Paragraph (5) of section 1248(d) is amended-- CommentsClose CommentsPermalink





(A) by inserting `(as defined in section 922)' after `a FSC', and CommentsClose CommentsPermalink





(B) by adding at the end the following new sentence: `Any reference in this paragraph to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.'. CommentsClose CommentsPermalink





(18) Subparagraph (D) of section 1297(b)(2) is amended by striking `foreign trade income of a FSC or'. CommentsClose CommentsPermalink





(19)(A) Paragraph (1) of section 6011(c) is amended by striking `or former DISC or a FSC or former FSC' and inserting `, former DISC, or former FSC (as defined in section 922 as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)'. CommentsClose CommentsPermalink





(B) Subsection (c) of section 6011 is amended by striking `and FSC's' in the heading thereof. CommentsClose CommentsPermalink





(20) Subsection (c) of section 6072 is amended by striking `a FSC or former FSC' and inserting `a former FSC (as defined in section 922 as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)'. CommentsClose CommentsPermalink





(21) Section 6686 is amended by inserting `FORMER' before `FSC' in the heading thereof. CommentsClose CommentsPermalink

(a) Amendment to the Internal Revenue Code of 1986- Section 9812(f)(3) of the Internal Revenue Code of 1986 is amended by striking `2007' and inserting `2008'. CommentsClose CommentsPermalink





(b) Amendment to the Employee Retirement Income Security Act of 1974- Section 70112(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181(f)) is amended by adding at the end the following:`(3) LOSS OF MILITARY HEALTH COVERAGE-`(A) IN GENERAL- Notwithstanding paragraphs (1) and (2), a group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met:`(i) The employee or dependent, by reason of service in the uniformed services (within the meaning ofsection 4303 of title 38, United States Code), was covered under a Federal health care benefit program (including coverage under the TRICARE program (as that term is defined in section 1072 of title 10, United States Code) or by reason of entitlement to health care benefits under the laws administered by the Secretary of Veterans Affairs or as a member of the uniformed services on active duty), and the employee or dependent loses eligibility for such coverage.`(ii) The employee or dependent is otherwise eligible to enroll for coverage under the terms of the plan.`(iii) The employee requests such coverage not later than 90 days after the date on which the coverage described in clause (i) terminated.`(B) EFFECTIVE DATE OF COVERAGE- Coverage requested under subparagraph (A)(iii) shall become effective not later than the first day of the first month after the date of such request.5a(f)) is amended by striking `2007' and inserting `2008'. CommentsClose CommentsPermalink





(c) Amendment to the Public Health Service Act- Section 27015(f) of the Public Health Service Act (42 U.S.C. 300gg(f)) is amended by adding at the end the following:`(3) LOSS OF MILITARY HEALTH COVERAGE-`(A) IN GENERAL- Notwithstanding paragraphs (1) and (2), a group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met:`(i) The employee or dependent, by reason of service in the uniformed services (within the meaning ofsection 4303 of title 38, United States Code), was covered under a Federal health care benefit program (including coverage under the TRICARE program (as that term is defined in section 1072 of title 10, United States Code) or by reason of entitlement to health care benefits under the laws administered by the Secretary of Veterans Affairs or as a member of the uniformed services on active duty), and the employee or dependent loses eligibility for such coverage.`(ii) The employee or dependent is otherwise eligible to enroll for coverage under the terms of the plan.`(iii) The employee requests such coverage not later than 90 days after the date on which the coverage described in clause (i) terminated.`(B) EFFECTIVE DATE OF COVERAGE- Coverage requested under subparagraph (A)(iii) shall become effective not later than the first day of the first month after the date of such request.'.(d) Regulations- The Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, consistent with section 104 of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 300gg-92 note), may promulgate such regulations as may be necessary or appropriate to require the notification of individuals (or their dependents) of their rights under the amendment made by this Act.(e) Effective Date- The amendments made by this section shall take effect 90 days after the date of the enactment of this Act.SEC. 303. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A RETURN OF TAX.(a) In General- Subsection (a) of section 6651 is amended by striking `$100' in the last sentence and inserting `$225'.(b) Effective Date- The amendment made by this section shall apply to returns the due date for the filing of which (including extensions) is5(f)) is amended by striking `2007' and inserting `2008'. CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to benefits for services furnished after December 31, 2007. CommentsClose CommentsPermalink

Amend the title so as to read: `An Act to amend the Internal Revenue Code of 1986 to provide tax relief and protections for military personnel, and for other purposes.'.Attest:Secretaryttest:CommentsClose CommentsPermalink

Clerk.CommentsClose CommentsPermalink

110th CONGRESS 1st Session H.R. 3997

HOUSE AMENDMENT TO SENATE

AMENDMENTS