[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4936 Introduced in House (IH)]
<DOC>
114th CONGRESS
2d Session
H. R. 4936
To provide assistance to small businesses.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 14, 2016
Mr. Walberg introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Oversight and Government Reform, Small Business, Education and the
Workforce, and the Judiciary, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide assistance to small businesses.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Main Street Jobs
and Opportunity Act of 2016''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--DEATH TAX REPEAL
Sec. 101. Repeal of estate and generation-skipping transfer taxes.
Sec. 102. Modifications of gift tax.
TITLE II--SMALL BUSINESS PAPERWORK RELIEF
Sec. 201. Suspension of fines for first-time paperwork violations by
small business concerns.
TITLE III--OCCUPATIONAL LICENSING
Sec. 301. Sense of Congress regarding occupational licensing.
Sec. 302. Study on effects of certain occupational licensing
requirements.
TITLE IV--RESTORE TRADITIONAL DEFINITION OF FULL-TIME EMPLOYMENT
Sec. 401. Repeal of 30-hour threshold for classification as full-time
employee for purposes of the employer
mandate in the Patient Protection and
Affordable Care Act and replacement with 40
hours.
TITLE V--SMALL BUSINESS START-UP SAVINGS ACCOUNTS
Sec. 501. Establishment of Small Business Start-Up Savings Accounts.
TITLE VI--LIMIT FRIVOLOUS LAWSUITS
Sec. 601. Attorney accountability.
TITLE VII--INCREASE IRS ACCOUNTABILITY
Sec. 701. Modification of standards for awarding of costs and certain
fees.
Sec. 702. Civil damages allowed for reckless or intentional disregard
of internal revenue laws.
Sec. 703. Modifications relating to certain offenses by officers and
employees in connection with revenue laws.
Sec. 704. Modifications relating to civil damages for unauthorized
inspection or disclosure of returns and
return information.
Sec. 705. Increase in monetary penalties for certain unauthorized
disclosures of information.
TITLE I--DEATH TAX REPEAL
SEC. 101. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.
(a) Estate Tax Repeal.--Subchapter C of chapter 11 of subtitle B of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 2210. TERMINATION.
``(a) In General.--Except as provided in subsection (b), this
chapter shall not apply to the estates of decedents dying on or after
the date of the enactment of the Main Street Jobs and Opportunity Act
of 2016.
``(b) Certain Distributions From Qualified Domestic Trusts.--In
applying section 2056A with respect to the surviving spouse of a
decedent dying before the date of the enactment of the Main Street Jobs
and Opportunity Act of 2016--
``(1) section 2056A(b)(1)(A) shall not apply to
distributions made after the 10-year period beginning on such
date, and
``(2) section 2056A(b)(1)(B) shall not apply on or after
such date.''.
(b) Generation-Skipping Transfer Tax Repeal.--Subchapter G of
chapter 13 of subtitle B of such Code is amended by adding at the end
the following new section:
``SEC. 2664. TERMINATION.
``This chapter shall not apply to generation-skipping transfers on
or after the date of the enactment of the Main Street Jobs and
Opportunity Act of 2016.''.
(c) Conforming Amendments.--
(1) The table of sections for subchapter C of chapter 11 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new item:
``Sec. 2210. Termination.''.
(2) The table of sections for subchapter G of chapter 13 of
such Code is amended by adding at the end the following new
item:
``Sec. 2664. Termination.''.
(d) Effective Date.--The amendments made by this section shall
apply to the estates of decedents dying, and generation-skipping
transfers, on or after the date of the enactment of this Act.
SEC. 102. MODIFICATIONS OF GIFT TAX.
(a) Computation of Gift Tax.--Subsection (a) of section 2502 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) Computation of Tax.--
``(1) In general.--The tax imposed by section 2501 for each
calendar year shall be an amount equal to the excess of--
``(A) a tentative tax, computed under paragraph
(2), on the aggregate sum of the taxable gifts for such
calendar year and for each of the preceding calendar
periods, over
``(B) a tentative tax, computed under paragraph
(2), on the aggregate sum of the taxable gifts for each
of the preceding calendar periods.
``(2) Rate schedule.--
``If the amount with respect to which The tentative tax is:
the tentative tax to be computed is:.
Not over $10,000....................... 18% of such amount.
Over $10,000 but not over $20,000...... $1,800, plus 20% of the excess
over $10,000.
Over $20,000 but not over $40,000...... $3,800, plus 22% of the excess
over $20,000.
Over $40,000 but not over $60,000...... $8,200, plus 24% of the excess
over $40,000.
Over $60,000 but not over $80,000...... $13,000, plus 26% of the excess
over $60,000.
Over $80,000 but not over $100,000..... $18,200, plus 28% of the excess
over $80,000.
Over $100,000 but not over $150,000.... $23,800, plus 30% of the excess
over $100,000.
Over $150,000 but not over $250,000.... $38,800, plus 32% of the excess
of $150,000.
Over $250,000 but not over $500,000.... $70,800, plus 34% of the excess
over $250,000.
Over $500,000.......................... $155,800, plus 35% of the
excess of $500,000.''.
(b) Treatment of Certain Transfers in Trust.--Section 2511 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(c) Treatment of Certain Transfers in Trust.--Notwithstanding any
other provision of this section and except as provided in regulations,
a transfer in trust shall be treated as a taxable gift under section
2503, unless the trust is treated as wholly owned by the donor or the
donor's spouse under subpart E of part I of subchapter J of chapter
1.''.
(c) Lifetime Gift Exemption.--
(1) In general.--Paragraph (1) of section 2505(a) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) the amount of the tentative tax which would be
determined under the rate schedule set forth in section
2502(a)(2) if the amount with respect to which such tentative
tax is to be computed were $5,000,000, reduced by''.
(2) Inflation adjustment.--Section 2505 of such Code is
amended by adding at the end the following new subsection:
``(d) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year after
2011, the dollar amount in subsection (a)(1) shall be increased
by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by
substituting `calendar year 2010' for `calendar year
1992' in subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $10,000, such amount shall be rounded
to the nearest multiple of $10,000.''.
(d) Conforming Amendments.--
(1) The heading for section 2505 of such Code is amended by
striking ``unified''.
(2) The item in the table of sections for subchapter A of
chapter 12 of such Code relating to section 2505 is amended to
read as follows:
``Sec. 2505. Credit against gift tax.''.
(3) Section 2801(a)(1) of such Code is amended by striking
``section 2001(c) as in effect on the date of such receipt''
and inserting ``section 2502(a)(2)''.
(e) Effective Date.--The amendments made by this section shall
apply to gifts made on or after the date of the enactment of this Act.
(f) Transition Rule.--
(1) In general.--For purposes of applying sections 1015(d),
2502, and 2505 of the Internal Revenue Code of 1986, the
calendar year in which this Act is enacted shall be treated as
2 separate calendar years one of which ends on the day before
the date of the enactment of this Act and the other of which
begins on such date of enactment.
(2) Application of section 2504(b).--For purposes of
applying section 2504(b) of the Internal Revenue Code of 1986,
the calendar year in which this Act is enacted shall be treated
as one preceding calendar period.
TITLE II--SMALL BUSINESS PAPERWORK RELIEF
SEC. 201. SUSPENSION OF FINES FOR FIRST-TIME PAPERWORK VIOLATIONS BY
SMALL BUSINESS CONCERNS.
Section 3506 of title 44, United States Code (commonly referred to
as the ``Paperwork Reduction Act''), is amended by adding at the end
the following:
``(j) Small Businesses.--
``(1) Small business concern.--In this subsection, the term
`small business concern' has the meaning given that term under
section 3 of the Small Business Act (15 U.S.C. 632).
``(2) In general.--In the case of a first-time violation by
a small business concern of a requirement regarding the
collection of information by an agency, the head of the agency
shall not impose a civil fine on the small business concern
unless the head of the agency determines that--
``(A) the violation has the potential to cause
serious harm to the public interest;
``(B) failure to impose a civil fine would impede
or interfere with the detection of criminal activity;
``(C) the violation is a violation of an internal
revenue law or a law concerning the assessment or
collection of any tax, debt, revenue, or receipt;
``(D) the violation was not corrected on or before
the date that is 6 months after the date on which the
small business concern receives notification of the
violation in writing from the agency; or
``(E) except as provided in paragraph (3), the
violation presents a danger to the public health or
safety.
``(3) Danger to public health or safety.--
``(A) In general.--In any case in which the head of
an agency determines under paragraph (2)(E) that a
violation presents a danger to the public health or
safety, the head of the agency may, notwithstanding
paragraph (2)(E), determine not to impose a civil fine
on the small business concern if the violation is
corrected not later than 24 hours after receipt by the
owner of the small business concern of notification of
the violation in writing.
``(B) Considerations.--In determining whether to
allow a small business concern 24 hours to correct a
violation under subparagraph (A), the head of an agency
shall take into account all of the facts and
circumstances regarding the violation, including--
``(i) the nature and seriousness of the
violation, including whether the violation is
technical or inadvertent or involves willful or
criminal conduct;
``(ii) whether the small business concern
has made a good faith effort to comply with
applicable laws and to remedy the violation
within the shortest practicable period of time;
and
``(iii) whether the small business concern
has obtained a significant economic benefit
from the violation.
``(C) Notice to congress.--In any case in which the
head of an agency imposes a civil fine on a small
business concern for a violation that presents a danger
to the public health or safety and does not allow the
small business concern 24 hours to correct the
violation under subparagraph (A), the head of the
agency shall notify Congress regarding the
determination not later than 60 days after the date on
which the civil fine is imposed by the agency.
``(4) Limited to first-time violations.--
``(A) In general.--This subsection shall not apply
to any violation by a small business concern of a
requirement regarding collection of information by an
agency if the small business concern previously
violated any requirement regarding collection of
information by the agency.
``(B) Other agencies.--For purposes of making a
determination under subparagraph (A), the head of an
agency shall not take into account any violation of a
requirement regarding collection of information by
another agency.''.
TITLE III--OCCUPATIONAL LICENSING
SEC. 301. SENSE OF CONGRESS REGARDING OCCUPATIONAL LICENSING.
It is the sense of Congress that--
(1) the Department of Labor should act within its existing
authority to reduce employment barriers created by certain
occupational licensing requirements, including providing
technical assistance and disseminating guidance and information
on best practices to States interested in increasing economic
opportunity through licensing reciprocity agreements or other
approaches; and
(2) that States should form interstate compacts to make it
easier for licensed workers to practice and relocate across
State lines, while also enabling State regulators to share
practitioners' performance histories.
SEC. 302. STUDY ON EFFECTS OF CERTAIN OCCUPATIONAL LICENSING
REQUIREMENTS.
(a) Study.--The Secretary of Labor shall conduct a study on the
effects of occupational licensing requirements to determine how such
requirements may--
(1) affect the service quality of certain occupations;
(2) affect public safety; and
(3) impose barriers to entry for establishing small
businesses, inhibit competition, increase costs to consumers,
limit hiring, or negatively impact certain populations.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary shall transmit a report to Congress detailing
the results of the study required by subsection (a), including any
recommendation for legislation.
TITLE IV--RESTORE TRADITIONAL DEFINITION OF FULL-TIME EMPLOYMENT
SEC. 401. REPEAL OF 30-HOUR THRESHOLD FOR CLASSIFICATION AS FULL-TIME
EMPLOYEE FOR PURPOSES OF THE EMPLOYER MANDATE IN THE
PATIENT PROTECTION AND AFFORDABLE CARE ACT AND
REPLACEMENT WITH 40 HOURS.
(a) Full-Time Equivalents.--Paragraph (2) of section 4980H(c) of
the Internal Revenue Code of 1986 is amended--
(1) by repealing subparagraph (E), and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Full-time equivalents treated as full-time
employees.--Solely for purposes of determining whether
an employer is an applicable large employer under this
paragraph, an employer shall, in addition to the number
of full-time employees for any month otherwise
determined, include for such month a number of full-
time employees determined by dividing the aggregate
number of hours of service of employees who are not
full-time employees for the month by 174.''.
(b) Full-Time Employees.--Paragraph (4) of section 4980H(c) of the
Internal Revenue Code of 1986 is amended--
(1) by repealing subparagraph (A), and
(2) by inserting before subparagraph (B) the following new
subparagraph:
``(A) In general.--The term `full-time employee'
means, with respect to any month, an employee who is
employed on average at least 40 hours of service per
week.''.
(c) Effective Date.--The amendments made by this section shall
apply to months beginning after December 31, 2013.
TITLE V--SMALL BUSINESS START-UP SAVINGS ACCOUNTS
SEC. 501. ESTABLISHMENT OF SMALL BUSINESS START-UP SAVINGS ACCOUNTS.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 7529. SMALL BUSINESS START-UP SAVINGS ACCOUNTS.
``(a) In General.--An individual or an eligible small business may
enter into an agreement with the Secretary to establish a small
business start-up savings account.
``(b) Small Business Start-Up Savings Account.--For purposes of
this section, the term `small business start-up savings account' means
a trust created or organized in the United States for the benefit of
the account beneficiary, but only if the written governing instrument
creating the trust meets the following requirements:
``(1) Except as provided in subsection (d)(3) in the case
of a rollover contribution, no contribution will be accepted
unless it is in cash, and contributions will not be accepted
for the taxable year on behalf of any account beneficiary in
excess of the amount in effect for such taxable year under
subsection (d)(2).
``(2) The trustee is a bank (as defined in section 408(n))
or such other person who demonstrates to the satisfaction of
the Secretary that the manner in which such other person will
administer the trust will be consistent with the requirements
of this section.
``(3) No part of the trust funds will be invested in life
insurance contracts.
``(4) The interest of an individual in the balance of his
account is nonforfeitable.
``(5) The assets of the trust will not be commingled with
other property except in a common trust fund or common
investment fund.
``(c) Eligible Small Business.--For purposes of this section, the
term `eligible small business' means, with respect to any taxable year,
any person engaged in a trade or business if the average number of
employees employed by such person on business days during the taxable
year was 500 or fewer.
``(d) Treatment of Contributions.--
``(1) In general.--There shall be allowed as a deduction
for the taxable year an amount equal to so much of the account
beneficiary's contributions for the taxable year to all small
business start-up savings accounts maintained for the benefit
of such beneficiary as do not exceed the contribution
limitations in effect for the taxable year under paragraph (2).
``(2) Contribution limitation.--
``(A) In general.--The amount allowable as a
deduction under paragraph (1) with respect to all small
business start-up savings accounts maintained for the
benefit of any person shall not exceed the lesser of--
``(i) $10,000, or
``(ii) $150,000, reduced by the aggregate
contributions by such person for all taxable
years with respect to all small business start-
up savings accounts of the taxpayer.
``(B) Cost of living adjustment.--
``(i) In general.--In the case of a taxable
year beginning after 2016, the $10,000 amount
in subparagraph (A) shall be increased by an
amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2015' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $500,
such amount shall be rounded to the next lowest
multiple of $500.
``(3) Rollovers from retirement plans not allowed.--Under
regulations prescribed by the Secretary, a person may make a
rollover contribution to a small business start-up savings
account only in the case of a rollover from another small
business start-up savings account.
``(4) Treated as deduction for individuals and
corporations.--For purposes of chapter 1, the deduction allowed
under paragraph (1) shall be treated as a deduction specified
in part VI of subchapter B of chapter 1 (relating to itemized
deductions for individuals and corporations).
``(e) Treatment of Distributions.--
``(1) Tax treatment.--
``(A) Exclusion of qualified distributions.--Any
qualified distribution from a small business start-up
savings account shall not be includible in gross
income.
``(B) Inclusion of other distributions.--Any
distribution from a small business start-up savings
account which is not a qualified distribution shall be
included in gross income.
``(2) Qualified distribution.--For purposes of this
subsection, the term `qualified distribution' means, with
respect to any taxable year, any payment or distribution from a
small business start-up savings account--
``(A) to the extent the amount of such payment or
distribution does not exceed the sum of--
``(i) the aggregate amounts paid or
incurred by the taxpayer for such taxable year
with respect to the taxpayer's trade or
business for the purchase of equipment or
facilities, marketing, training, incorporation,
and accounting fees, and
``(ii) the aggregate capital contributions
of the taxpayer with respect to an eligible
small business for the taxable year (but only
to the extent such amounts are used by such
small business for purposes described in clause
(i)), and
``(B) which, in the case of a payment or
distribution subsequent to the first payment or
distribution from such account (or any predecessor to
such account)--
``(i) is made not later than the close of
the 5th taxable year beginning after the date
of such first payment or distribution, and
``(ii) is made with respect to the same
eligible small business with respect to which
such first payment or distribution was made.
``(3) Treatment after death of account beneficiary.--
``(A) In general.--If, by reason of the death of
the account beneficiary, any person acquires the
account beneficiary's interest in a small business
start-up savings account--
``(i) such account shall cease to be a
small business start-up savings account as of
the date of death, and
``(ii) an amount equal to the fair market
value of the assets in such account on such
date shall be includible--
``(I) in the case of a person who
is not the estate of such beneficiary,
in such person's gross income for the
taxable year which includes such date,
or
``(II) in the case of a person who
is the estate of such beneficiary, in
such beneficiary's gross income for the
last taxable year of such beneficiary.
``(B) Special rules.--
``(i) Reduction of inclusion for predeath
expenses.--The amount includible in gross
income under subparagraph (A) shall be reduced
by the amounts described in paragraph (2) which
were incurred by the decedent before the date
of the decedent's death and paid by such person
within 1 year after such date.
``(ii) Deduction for estate taxes.--An
appropriate deduction shall be allowed under
section 691(c) to any person (other than the
decedent) with respect to amounts included in
gross income under subparagraph (A)(ii)(I) by
such person.
``(4) Treatment for failure to be treated as eligible small
business.--If for any taxable year a taxpayer which holds a
small business start-up savings account as an eligible small
business ceases to be an eligible small business--
``(A) such account shall cease to be a small
business start-up savings account, and
``(B) the balance of such account shall be treated
as paid out for such taxable year in a distribution
which is not a qualified distribution.
``(f) Special Rules.--
``(1) Denial of double benefit.--Any deduction or credit
otherwise allowed for the taxable year with respect to amounts
described in subsection (e)(2)(A) shall be reduced by an amount
equal to the qualified distributions attributable to such
amounts. The adjusted basis of any property placed in service
for the taxable year shall be reduced by the amount of any
qualified distributions attributable to such property. For
purposes of this paragraph, qualified distributions shall first
be treated as attributable to amounts described in subsection
(e)(2)(A), then to property placed in service for the taxable
year.
``(2) Aggregation rule.--For purposes of this section, all
persons treated as a single employer under subsection (a) or
(b) of section 52, or subsection (m) or (o) of section 414,
shall be treated as one person.''.
(b) Excise Tax on Excess Contributions and Nonqualified
Distributions.--Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 50A--SMALL BUSINESS START-UP SAVINGS ACCOUNTS
``Sec. 5000D. Tax on excess contributions to small business start-up
savings accounts.
``Sec. 5000E. Tax on nonqualified distributions from small business
start-up savings accounts.
``Sec. 5000F. Cross reference.
``SEC. 5000D. TAX ON EXCESS CONTRIBUTIONS TO SMALL BUSINESS START-UP
SAVINGS ACCOUNTS.
``(a) In General.--In the case of a small business start-up savings
account (within the meaning of section 7529) there is imposed for each
taxable year a tax in an amount equal to 6 percent of the amount of the
excess contributions to such taxpayer's account (determined as of the
close of the taxable year).
``(b) Limitation.--The amount of tax imposed by subsection (a)
shall not exceed 6 percent of the value of the account (determined as
of the close of the taxable year).
``(c) Excess Contributions.--For purposes of this section, in the
case of contributions to all small business start-up savings accounts
maintained for the benefit of a person, the term `excess contributions'
means the sum of--
``(1) the excess (if any) of--
``(A) the amount contributed to such accounts for
the taxable year, over
``(B) the amount allowable as a contribution under
section 7529(d)(2)(A) for such taxable year, and
``(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of--
``(A) the distributions out of the accounts for the
taxable year, and
``(B) the excess (if any) of--
``(i) the maximum amount allowable as a
contribution under section 7529(d)(2)(A) for
such taxable year, over
``(ii) the amount contributed to such
accounts for such taxable year.
``SEC. 5000E. TAX ON NONQUALIFIED DISTRIBUTIONS FROM SMALL BUSINESS
START-UP SAVINGS ACCOUNTS.
``(a) In General.--If for any taxable year an amount is paid or
distributed out of a taxpayer's small business start-up savings
account, there is imposed for such taxable year a tax in an amount
equal to 10 percent of the portion of such amount which is includible
in the gross income of the taxpayer.
``(b) Exception for Disability or Death.--Subsection (a) shall not
apply if the payment or distribution is made after the account
beneficiary becomes disabled within the meaning of section 72(m)(7)
(but only if such beneficiary's account was created before becoming so
disabled) or dies.
``SEC. 5000F. CROSS REFERENCE.
``For prohibited transactions, see section 4975.''.
(c) Prohibited Transactions.--
(1) In general.--Paragraph (1) of section 4975(e) of such
Code is amended by striking ``or'' at the end of subparagraph
(F), by striking the period at the end of subparagraph and
inserting ``, or'', and by adding at the end the following new
subparagraph:
``(H) a small business start-up savings account
(within the meaning of section 7529).''.
(2) Special rule for ceasing to be a small business start-
up savings account.--Section 4975(c) of such Code (relating to
tax on prohibited transactions) is amended by adding at the end
the following new paragraph:
``(7) Special rule for small business start-up savings
account.--An individual for whose benefit a small business
start-up savings account (within the meaning of section 7529)
is established shall be exempt from the tax imposed by this
section with respect to any transaction concerning such account
(which would otherwise be taxable under this section) if, with
respect to such transaction, the account ceases to be a small
business start-up savings account by reason of the application
of paragraph (3) or (4) of section 7529(e) to such account.''.
(d) Deduction Allowed Whether or Not Individual Itemizes.--
Subsection (a) of section 62 of such Code is amended by inserting after
paragraph (21) the following new paragraph:
``(22) Contributions to small business start-up savings
accounts.--The deduction allowed by section 7529(d)(1)(A).''.
(e) Conforming Amendments.--
(1) The table of chapters for subtitle D of such Code is
amended by adding at the end the following new item:
``Chapter 50A. Small Business Start-Up Savings Accounts''.
(2) The table of sections for chapter 77 of such Code is
amended by inserting after the item relating to section 7528
the following new item:
``Sec. 7529. Small Business Start-Up Savings Accounts.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
TITLE VI--LIMIT FRIVOLOUS LAWSUITS
SEC. 601. ATTORNEY ACCOUNTABILITY.
(a) Sanctions Under Rule 11.--Rule 11(c) of the Federal Rules of
Civil Procedure is amended--
(1) in paragraph (1), by striking ``may'' and inserting
``shall'';
(2) in paragraph (2), by striking ``Rule 5'' and all that
follows through ``motion.'' and inserting ``Rule 5.''; and
(3) in paragraph (4), by striking ``situated'' and all that
follows through the end of the paragraph and inserting
``situated, and to compensate the parties that were injured by
such conduct. Subject to the limitations in paragraph (5), the
sanction shall consist of an order to pay to the party or
parties the amount of the reasonable expenses incurred as a
direct result of the violation, including reasonable attorneys'
fees and costs. The court may also impose additional
appropriate sanctions, such as striking the pleadings,
dismissing the suit, or other directives of a non-monetary
nature, or, if warranted for effective deterrence, an order
directing payment of a penalty into the court.''.
(b) Rule of Construction.--Nothing in this Act or an amendment made
by this Act shall be construed to bar or impede the assertion or
development of new claims, defenses, or remedies under Federal, State,
or local laws, including civil rights laws, or under the Constitution
of the United States.
TITLE VII--INCREASE IRS ACCOUNTABILITY
SEC. 701. MODIFICATION OF STANDARDS FOR AWARDING OF COSTS AND CERTAIN
FEES.
(a) Small Businesses Eligible Without Regard to Net Worth.--
Subparagraph (D) of section 7430(c)(4) of the Internal Revenue Code of
1986 is amended by striking ``and'' at the end of clause (i)(II), by
striking the period at the end of clause (ii) and inserting ``, and'',
and by adding at the end the following new clause:
``(iii) in the case of an eligible small
business, the net worth limitation in clause
(ii) of such section shall not apply.''.
(b) Eligible Small Business.--Paragraph (4) of section 7430(c) of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(F) Eligible small business.--For purposes of
subparagraph (D)(iii), the term `eligible small
business' means, with respect to any proceeding
commenced in a taxable year--
``(i) a corporation the stock of which is
not publicly traded,
``(ii) a partnership, or
``(iii) a sole proprietorship,
if the average annual gross receipts of such
corporation, partnership, or sole proprietorship for
the 3-taxable-year period preceding such taxable year
does not exceed $50,000,000. For purposes of applying
the test under the preceding sentence, rules similar to
the rules of paragraphs (2) and (3) of section 448(c)
shall apply.''.
(c) Effective Date.--The amendments made by this section shall
apply to proceedings commenced after the date of the enactment of this
Act.
SEC. 702. CIVIL DAMAGES ALLOWED FOR RECKLESS OR INTENTIONAL DISREGARD
OF INTERNAL REVENUE LAWS.
(a) Increase in Amount of Damages.--Section 7433(b) of the Internal
Revenue Code of 1986 is amended by striking ``$1,000,000 ($100,000, in
the case of negligence)'' and inserting ``$3,000,000 ($300,000, in the
case of negligence)''.
(b) Extension of Time To Bring Action.--Section 7433(d)(3) of the
Internal Revenue Code of 1986 is amended by striking ``2 years'' and
inserting ``5 years''.
(c) Effective Date.--The amendments made by this section shall
apply to actions of employees of the Internal Revenue Service after the
date of the enactment of this Act.
SEC. 703. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY OFFICERS AND
EMPLOYEES IN CONNECTION WITH REVENUE LAWS.
(a) Increase in Penalty.--Section 7214 of the Internal Revenue Code
of 1986 is amended--
(1) by striking ``$10,000'' in subsection (a) and inserting
``$25,000'', and
(2) by striking ``$5,000'' in subsection (b) and inserting
``$10,000''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 704. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR UNAUTHORIZED
INSPECTION OR DISCLOSURE OF RETURNS AND RETURN
INFORMATION.
(a) Increase in Amount of Damages.--Subparagraph (A) of section
7431(c)(1) of the Internal Revenue Code of 1986 is amended by striking
``$1,000'' and inserting ``$10,000''.
(b) Effective Date.--The amendment made by this section shall apply
to inspections and disclosure occurring on and after the date of the
enactment of this Act.
SEC. 705. INCREASE IN MONETARY PENALTIES FOR CERTAIN UNAUTHORIZED
DISCLOSURES OF INFORMATION.
(a) In General.--Paragraphs (1), (2), (3), and (4) of section
7213(a) of the Internal Revenue Code of 1986 are each amended by
striking ``$5,000'' and inserting ``$10,000''.
(b) Effective Date.--The amendments made by this section shall
apply to disclosures made after the date of the enactment of this Act.
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