H.R.4333 - Technical and Miscellaneous Revenue Act of 1988100th Congress (1987-1988)
|Sponsor:||Rep. Rostenkowski, Dan [D-IL-8] (Introduced 03/31/1988)|
|Committees:||House - Ways and Means|
|Committee Reports:||H.Rept 100-795; H.Rept 100-1104|
|Latest Action:||11/10/1988 Became Public Law No: 100-647. (All Actions)|
|Roll Call Votes:||There have been 3 roll call votes|
This bill has the status Became Law
Here are the steps for Status of Legislation:
- Passed House
- Passed Senate
- Resolving Differences
- To President
- Became Law
Summary: H.R.4333 — 100th Congress (1987-1988)All Information (Except Text)
(Conference report filed in House, H. Rept. 100-1104)
Conference report filed in House (10/21/1988)
Technical and Miscellaneous Revenue Act of 1988 - Title I: Technical Corrections to Tax Reform Act of 1986 - Makes a technical adjustment to an assessment rule applicable when the owner of a large amount of cash is not identified.
Revises the rate of the accumulated earnings tax on corporations from a variable rate based on income below and in excess of $100,000 to a flat 28 percent of accumulated taxable income.
Makes a technical amendment relating to the exemption of certain individuals from the requirement to file an income tax return.
States that reimbursement by a third party (rather than by an employer) shall not affect the permissibility of the tax deduction for reimbursed employee expenses.
Revises the definition of "exempt function" in the context of taxation of political organizations.
Amends Internal Revenue Code (IRC) and Social Security Act provisions relating to nonresident aliens temporarily in the United States for the purpose of studying at vocational or other recognized nonacademic institutions.
Deletes provisions describing the treatment of Social Security benefits for purposes of defining earned income.
Amends provisions relating to the two percent floor on miscellaneous itemized deductions to: (1) add provisions concerning the coordination of such limitation with the limitation on the tax deduction for trade and business expenses; and (2) revise the determination of adjusted gross income of estates and trusts with respect to such limitation.
Adds provisions relating to the deductibility of meal and entertainment expenses incurred during a move reimbursed by an employer.
Limits the tax deduction of expenses in connection with portions of dwelling units allocated to business uses.
Amends provisions governing the computation of the earnings and profits of certain foreign corporations for purposes of determining the effect of depreciation on such earnings and profits.
Amends the IRC with regard to the application of the accelerated cost recovery system (ACRS) in cases of: (1) certain property placed in service in churning transactions; (2) certain transfers; and (3) certain property subject to U.S. tax and used by a foreign person or entity.
Permits greater taxpayer discretion in using the 150 percent declining balance method of depreciation for ACRS purposes and specifies the applicable recovery period to be used in such cases.
Terminates special rules for the tax treatment of sound recordings for property placed in service after 1985.
Makes other technical amendments and corrections relating to provisions: (1) modifying the ACRS; and (2) limiting expensing of depreciable assets.
Revises Tax Reform Act (TRA) provisions that specify effective dates of new law.
Makes technical amendments and corrections to a number of transitional rules provided in the TRA with respect to urban renovation projects. Makes technical amendments and corrections to the Tax Reform Acts of both 1986 and 1984 concerning property treated under prior tax Acts.
Adds a number of projects to those covered under special transitional rules. Amends the TRA concerning the applicability of modifications of the ACRS to a number of specific properties.
Makes technical amendments and corrections to IRC and TRA provisions relating to transition property with respect to the former regular investment tax credit. Adds: (1) an exception to the application of certain adjustment rules relating to such credit; and (2) a number of properties to be considered as transition property.
Makes technical revisions of the ordering rules in connection with components of the investment credit and certain credits no longer extant for purposes of the general business credit.
Makes technical amendments to TRA provisions relating to the effective 15-year carryback of existing carryforwards of steel companies. Establishes rule criteria to apply to overpayments under this section.
Amends the IRC with respect to the income tax research credit.
Amends the IRC to disallow use of any depreciation deduction with respect to: (1) any trademark or trade name expenditure; or (2) any railroad grading or tunnel bore. Brings this railroad equipment within the ACRS.
Makes technical amendments and corrections to TRA provisions relating to the modification of the investment tax credit for certain rehabilitation expenditures.
Makes technical amendments to the IRC with respect to the low-income housing credit, including: (1) amendments of special rules for nontaxable transfers; (2) the addition of an exception to rules governing basis reduction for certain residential rental units; (3) the exclusion from the eligible basis of a building of amounts deducted for depreciation; (4) the addition of provisions applicable to rent-restricted units in cases when Federal rental assistance is reduced as a tenant's income increases; (5) provisions relating to limitations on the aggregate credit allowable with respect to projects located in a State; (6) a prohibition of any carryback of the credit before 1987; and (7) a revision of the definition of "qualified low-income housing project" to include, under certain circumstances, residential rental property having units occupied by persons making de minimis equity contributions.
Corrects a reference in the Merchant Marine Act, 1936.
Makes technical amendments and corrections to IRC and TRA provisions relating to capital gains. Revises: (1) provisions limiting the capital losses permitted to noncorporate taxpayers; (2) the description of taxable income from foreign sources for capital gains purposes; (3) the definition of a "capital gains rate differential" and its applicability to the calculation of the bad debt reserves of certain financial institutions; (4) a special rule relating to the withholding of tax on dispositions of U.S. real property interests by domestic partnerships, trusts, or estates; and (5) provisions dealing with incentive stock options.
Makes technical amendments to the TRA and the IRC to revise and limit the tax exclusion for the discharge of qualified farm indebtedness and to provide for its coordination with other tax exclusions.
Makes a technical amendment relating to the taxation of capital gains from dispositions of interests in oil, gas, geothermal, or other mineral properties.
Makes technical amendments and corrections to the IRC and the TRA with respect to tax shelter and interest limitations, revising provisions relating to: (1) methods of accounting, including revisions of the phase-in of the disallowance of passive activity losses or credits held before the date of enactment of the Tax Reform Act of 1986 (October 22, 1986); (2) the definition of a "qualified investor" for purposes of the transitional rule for interests in low-income housing projects; (3) the phase-in of the limitation on investment interest; and (4) determinations of indebtedness for purposes of the personal interest disallowance, including provisions related to qualified residence interest.
Makes technical amendments and corrections to TRA and IRC corporate tax provisions. Revises the percentage to be used in computing the deduction for dividends received from certain foreign sales corporations. Includes amendments relating to: (1) the reduction of corporate shareholders' basis in stock by the nontaxed portion of extraordinary dividends; (2) the limitation on net operating loss carryforwards and certain built-in losses following a change in corporate ownership, including provisions relating to built-in gains and gains attributable to stock acquisitions (section 338 gains), rules relating to constructive stock ownership, and provisions applicable when the old loss corporation is in a title 11 or similar proceeding; and (3) recognition of gain and loss on distributions of property in corporate liquidations.
Restructures IRC provisions dealing with transfers of partnership and trust interests by corporations.
Makes technical amendments relating to: (1) transfers of property from the United States to foreign corporations; (2) sales or exchanges of stock in certain foreign corporations; (3) accounting provisions in connection with distributions of installment obligations by an S corporation in complete liquidation; and (4) the taxation of C corporations that elect subchapter S status, including revisions of provisions dealing with the tax imposed when passive investment income exceeds 25 percent of the gross receipts of certain S corporations.
Adds to the IRC provisions dealing with special allocation rules for certain partnership transactions.
Makes technical amendments and corrections concerning: (1) the definition of "related persons" with respect to the installment method of accounting; (2) the treatment of amortizable bond premium as interest; (3) certain entities not to be treated as corporations, including a special rule for persons holding income interests; and (4) the taxation generally of regulated investment companies and their shareholders, including changes of definitions and revisions of the excise tax on undistributed income of such companies.
Makes technical amendments to TRA and IRC provisions with respect to real estate investment trusts, including: (1) provisions specifying asset and income requirements; (2) certain definitions; (3) distribution requirements; and (4) the excise tax on undistributed income of such trusts.
Makes technical amendments to IRC provisions dealing with the taxation of real estate mortgage investment conduits (REMICs). Imposes a 34 percent tax on a REMIC's net income from foreclosure property. Reduces the amount of taxable income of a REMIC by the amount of such tax.
Imposes a tax on contributions to a REMIC after the startup day in an amount equal to the amount of the contribution. Permits specified exceptions.
Imposes a 15 percent tax on: (1) any transfer of a residual interest in a REMIC to a disqualified organization (certain political entities, tax-exempt organizations, and rural utility cooperatives); and (2) a pass-through entity if a disqualified organization is the record holder of an interest in the entity at any time during the year.
Makes corrections to TRA and IRC rules for accruing the original discount on regular interests and similar debt instruments.
Amends the TRA to direct the Secretary of the Treasury (Secretary) to: (1) study the operation of these REMIC-related amendments and their impact on the competitiveness of savings and loan and similar institutions; and (2) report the results to specified congressional committees by January 1, 1990.
Makes technical amendments and corrections to IRC provisions with respect to the alternative minimum tax, including provisions relating to: (1) the phase-out of the exemption amount with respect to married individuals filing separate returns; (2) the treatment of taxes on dividends from Puerto Rico and U.S. possession corporations; (3) adjustments applicable to taxpayers in computing alternative minimum taxable income, including disallowance of the standard deduction and the deduction for personal exemptions in calculations to determine the taxable income of noncorporate taxpayers; (4) tax preference items; (5) the denial of certain losses and the determination of their amount; and (6) transitional provisions.
Revises provisions limiting the amount of the general business tax credit.
Amends accounting provisions of the TRA and the IRC. Directs the Secretary to prescribe regulations as necessary to prevent the use of related parties, pass-through entities, or intermediaries to evade certain limitations on the use of the cash method of accounting. Includes technical amendments of provisions relating to: (1) the special rule for the spudding of oil or gas wells; (2) capitalization and inclusion in inventory costs of certain expenses; (3) accounting methods for long-term contracts, including the addition of provisions permitting the Secretary to prescribe a simplified procedure for allocation of costs in certain cases and a prohibition against applying the look-back method to certain contracts; (4) the taxable years of certain entities, such as partnerships and common trust funds; (5) allocation of installment indebtedness, including provisions dealing with dispositions of personal property under revolving credit plans and installment obligations arising out of certain stock or securities sales; (6) disallowance of the use of the installment method of accounting for certain obligations; and (7) income attributable to utility services.
Makes technical amendments and corrections to TRA and IRC provisions concerning financial institutions. Includes amendments with respect to: (1) the credit for investment in certain depreciable property in cases when the mutual savings bank or other financial institution is a lessee; (2) the tax deduction for bad debt reserves of banks; (3) the pro rata allocation of interest expense to tax-exempt interest; and (4) the treatment of losses on deposits or accounts in insolvent financial institutions, including provisions allowing an institution whose deposits are not insured under Federal law to elect to treat losses on account of its bankruptcy or insolvency as ordinary losses.
Amends the IRC to state that charitable gift annuities (those owned by an individual who made a tax-deductible charitable contribution to the annuities' issuer) are not commercial-type insurance for purposes of determining the tax-exempt status of organization. Directs the Secretary of the Treasury to revise the tables used to determine the amount of a charitable contribution to reflect interest rates and recent mortality experience.
Makes technical amendments to the TRA and IRC with respect to insurance products and companies. Includes amendments relating to: (1) phase-in provisions for insurance companies whose income is now taxable but was not previously subject to taxation; (2) the treatment of certain dividends and interest; (3) the discounting of unpaid losses and certain unpaid expenses; (4) the alternative tax for certain small companies; and (5) adjustments of the shareholders surplus account when alternative minimum tax is imposed. Amends provisions of the Tax Reform Act of 1984 that permit a mutual life insurance company to elect to treat individual noncancellable accident and health policies as cancellable.
Amends IRC and TRA provisions dealing with limitation and nondiscrimination requirements applicable to pensions and deferred compensation plans. Includes amendments relating to: (1) the treatment of married individuals filing separate returns and living apart for purposes of the limitation on the deduction for qualified retirement contributions; (2) nondeductible contributions to individual retirement plans, including the institution of a $50 penalty for failure to report designated nondeductible contributions; (3) distributions on deferrals in excess of the $7,000 limitation on the exclusion from gross income; (4) adjustments to limitations on contributions and benefits under qualified plans; (5) modifications of provisions governing tax-deferred compensation plans of State and local governments and of tax-exempt organizations; (6) special rules for simplified employee pensions (SEPs), including a technical amendment to the Social Security Act and a new provision prohibiting employee election of a salary reduction arrangement in cases when the SEP does not meet the requirements necessary to ensure the distribution of excess contributions; (7) the application of nondiscrimination rules to integrated plans; (8) minimum employee coverage requirements for qualified plans, including new provisions to address employers having only highly compensated employees; (9) certain definitions; (10) cash or deferred arrangements, including new provisions to govern distributions upon the termination of a plan or the disposition of either a corporation's assets or its interest in a subsidiary; and (11) nondiscrimination requirements for employer matching contributions, employee contributions, and tax-sheltered annuities.
Amends TRA and IRC provisions dealing with the treatment of distributions and various other aspects of pensions and deferred compensation plans. Includes technical amendments and corrections with respect to: (1) the taxation of distributions, including revisions of special rules for partial distributions; (2) the additional tax on early distributions from qualified retirement plans, including the repeal of provisions triggering additional tax when an employee receives certain distributions before reaching age 59 1/2; (3) the class of taxpayers permitted to elect to treat certain lump-sum distributions received in 1987 as if they were received in 1986; (4) the tax on nondeductible contributions to qualified employer plans; (5) the excise tax on the reversion of qualified plan assets to an employer, including revisions relating to employee stock ownership plans; (6) the excise tax on excess distributions from qualified retirement plans, including an addition to the rules for computing excess retirement accumulation; and (7) the tax treatment of the Federal Thrift Savings Fund.
Makes technical amendments and corrections to TRA and IRC provisions relating to employee benefits and employee stock ownership plans (ESOPs). Includes amendments with respect to: (1) the loss of the tax-exempt status of any organization that is part of a plan failing to meet certain requirements; (2) cafeteria plans; (3) technical amendments of the Social Security Act; (4) the definition of the terms "wages" and "compensation" for certain purposes; (5) taxes relating to funded welfare benefit plans, including the imposition of a new excise tax on funds that include discriminatory employee benefit plans; (6) additional requirements for certain tax-exempt organizations; (7) the deductibility of the health insurance costs of self-employed individuals; (8) the employee tax exclusion of amounts paid by an employer for dependent care assistance, including a new paperwork requirement for employers; (9) the estate tax deduction for proceeds from sales of employer securities; (10) loans used to acquire employer securities, including provisions relating to the period of applicability of the exclusion of interest on such securities acquisitions loans; and (11) qualification requirements for ESOPs.
Makes technical amendments and corrections to foreign tax provisions of the TRA and the IRC. Includes amendments relating to: (1) limitations on the foreign tax credit, including a definition of "financial services income" for purposes of such limitations; (2) source rules for personal property sales, including the addition of a special rule for certain stock sales by residents of Puerto Rico; (3) the treatment of gain from the sale of stock of a foreign corporation when the gain would ordinarily be sourced in the United States but, pursuant to a treaty obligation of the United States, the taxpayer chooses to treat the gain as foreign source income; (4) the tax exemption of certain transportation-related income of foreign corporations; (5) income from U.S. sources with respect to companies meeting foreign business requirements; (6) rules for allocating interest to foreign source income, including revisions to phase-in rules; (7) the taxation of income earned through foreign corporations, including special rules for certain captive insurance companies and for determining the earnings and profits of a controlled foreign corporation for purposes of computing amounts to be included in the gross income of U.S. shareholders; (8) a new provision requiring certain shareholders in foreign corporations to file information returns; (9) subpart F income generally (types of income particularly suited to tax haven activity); (10) deductions for dividends received from certain foreign corporations; (11) the disposition of investment in U.S. real property; (12) passive foreign investment companies, including the interest charge on tax deferrals, the treatment of qualified electing funds, and a special rule for the treatment of certain foreign corporations owning at least 25 percent stock in a domestic corporation; (13) treatment of passive foreign investment company stock owned by a pooled income fund; (14) the branch profits tax on foreign corporations; (15) exemptions from the excise tax on policies issued by foreign insurers; (16) the treatment of deferred payments and appreciation arising out of business conducted by foreign corporations or by nonresident aliens within the United States; (17) withholding tax on foreign partners' share of a partnership's "effectively connected taxable income"; (18) income of foreign governments, including the addition of limitations on the tax exclusion from gross income of certain employees; (19) the treatment of losses of separate business units of dual residence corporations; (20) foreign currency transactions, including provisions for determining foreign taxes and the earnings and profits of foreign corporations; (21) tax treatment of the Virgin Islands (V.I.), including provisions for the coordination of U.S. and V.I. income taxes; (22) the addition of provisions relating to the coordination of U.S. treaty obligations, amendments made by the TRA, and technical corrections effected by this Act; (23) taxation of domestic international sales corporation (DISC) income to tax-exempt shareholders; and (24) treatment of shared foreign sales corporations, including a revision of rules governing the deduction for dividends received from such corporations.
Makes technical amendments and corrections to TRA and IRC provisions with respect to tax-exempt bonds. Includes amendments relating to: (1) various types of State and local bonds, including qualified small issue bonds, qualified student loan bonds; and qualified 501(c)(3) bonds; (2) requirements applicable to certain private bonds, such as issues of scholarship funding bonds and volunteer fire department bonds; (3) arbitrage rebate requirements and refunding bond provisions with respect to governmental units issuing $5,000,000 or less of bonds; (4) the definition of "investment property" for arbitrage bond purposes; (5) provisions, including transitional rules, relating to refundings and to the volume cap; (6) termination of the mortgage bond policy statement requirement; (7) provisions relating to certain established State programs, including a technical amendment of the Mortgage Subsidy Bond Tax Act of 1980; and (8) transitional rules for specific facilities.
Enacts into positive law a specified Treasury Regulation governing amounts held in a sinking fund for a bond issue.
Makes technical amendments and corrections to IRC and TRA provisions dealing with the income taxation of trusts and estates, including provisions relating to: (1) reversionary interests; (2) charitable remainder trust beneficiaries; and (3) an exception for charitable trusts, private foundations, and certain estates and trusts from the penalty tax for failure to pay estimated income tax.
Makes technical amendments and corrections of the IRC and TRA relating to the unearned income of minor children, including new provisions addressing the alternative minimum tax.
Makes technical amendments and corrections to IRC and TRA provisions with respect to the generation-skipping transfer tax, including provisions concerning: (1) special rules for determining the inclusion ratio for charitable lead annuity trusts, certain inter vivos transfers, and certain direct skips that are nontaxable gifts, as well as valuation of property in connection with the GST exemption for inclusion ratio purposes; (2) disregard of certain support obligations arising under State law when determining a person's interest in a trust; and (3) special rules governing certain transfers to grandchildren.
Makes technical amendments and corrections to compliance and tax administration sections of the TRA and the IRC, including amendments relating to: (1) the penalty for tax underpayment due to negligence and fraud; and (2) reporting requirements applicable to real estate transactions, including provisions excluding certain farm managers from the definition of "broker" and prohibiting a real estate reporting person from separately charging a customer for making certain required filings. Creates an exception from information reporting requirements for certain classified and confidential contracts between a Federal executive agency and another person.
Declares that certain salary recommendations submitted by the President for special trial judges shall not be effective to the extent such salaries are not equal to 90 percent of the rate for Tax Court judges and are not paid in the same installments as Tax Court judges' salaries.
Makes technical amendments and corrections to TRA and IRC provisions with respect to retirement pay for U.S. Tax Court judges.
Amends provisions of the IRC relating to tax administration. Revises levy exemptions related to service-connected disability payments to: (1) remove the exemption for certain veterans' life insurance benefits; and (2) add exemptions for wartime and peacetime death compensation, burial benefits, and dependency and indemnity compensation for service-connected deaths.
Includes the refundable earned income credit in deficiency assessments.
Makes technical amendments and corrections to TRA and IRC provisions with respect to the tax-exempt status of certain title holding corporations or trusts (an exception initiated by the TRA).
Makes other technical amendments and corrections to TRA and IRC provisions, including amendments relating to the excise tax on gasoline.
Increases the rate of the gasoline tax on gasoline used to produce gasohol.
Makes technical amendments and corrections to the IRC and to the Tax Reform Acts of both 1984 and 1986 relating to: (1) tax-exempt entity leasing provisions as applicable to tax-exempt controlled entities; (2) the nonrecognition of gain or loss with respect to certain transfers in connection with corporate reorganizations and the treatment of distributions in such cases; (3) the deductibility of excess golden parachute payments; (4) accounting changes with respect to designated settlement funds; (5) the exclusion from gross investment income of dividends from certain subsidiaries of life insurance companies; (6) special rules for stripped bonds of tax-exempt organizations; (7) technical amendments related to the Medicare program; and (8) the status of certain loans of artwork for purposes of gift tax liability.
Title II: Amendments Related to Tax Provisions in Other Legislation - Makes technical amendments and corrections to IRC provisions relating to: (1) directions to the Secretary to provide regulatory guidance to govern circumstances when a refund of the excise tax on certain chemicals shall be made directly to an exporter; (2) the addition of an exemption of regulated investment companies and real estate investment trusts from the environmental tax; (3) the tax on certain fuels to fund the Leaking Underground Storage Tank Trust Fund, including restoration of the exemption of certain fuel used in vessels and aircraft in international commerce; (4) taxation of qualified methanol and ethanol fuel; (5) the Leaking Underground Storage Tank Trust Fund tax as applied to gasoline used in aviation and in trains; (6) the floor stocks tax on gasoline; (7) the ordering of amendments made by the Superfund Revenue Act of 1986 and by the Harbor Maintenance Revenue Act of 1986 of provisions related to the excise tax on fuel used in commercial transportation on inland waterways; and (8) exemption from the port use excise tax for cargo transported between Alaska, Hawaii, and any U.S. possession for ultimate use or consumption at the relevant destination. Amends the Harbor Maintenance Revenue Act of 1986 to delay the due date for the Secretary of the Treasury's study of cargo diversion.
Makes technical amendments related to the Omnibus Budget Reconciliation Act of 1986 with respect to tax-exempt mutual or cooperative telephone or electric companies.
Makes technical corrections and amendments related to the Revenue Act of 1987, including amendments of IRC provisions dealing with: (1) dependent care expenses under cafeteria plans; (2) the installment method of accounting; (3) election by various entities of a taxable year other than the required one and the required payments for such entities; (4) publicly traded partnerships; (5) effective dates of various corporate tax provisions; (6) limitations on the use of preacquisition losses to offset built-in gains following corporate ownership changes; (7) the excise tax on the receipt of greenmail; (8) the interest rate to be used to compute tax reserves for life insurance companies; and (9) treatment of foreign insurance companies.
Makes technical amendments to provisions of the IRC and of ERISA dealing with: (1) the tax on nondeductible contributions to qualified employer plans, as applied to self-employed individuals; (2) the minimum funding standard for pension plans; and (3) the allocation of assets in plan spin-offs resulting from mergers and consolidations.
Amend,s IRC provisions relating to the manufacturers excise tax on certain vaccines.
Title III: Additional Simplification and Clarification Provisions - Subtitle A: Diesel Fuel Excise Tax Collection and Exemption Procedures - Amends the Internal Revenue Code to prohibit, with limited exceptions, the imposition of the excise tax on diesel and aviation fuels in connection with sales to a purchaser for use in public intercity, local, or school buses or for statutorily nontaxable uses (including off-highway business uses, State or local government uses, and shipping uses). Sets forth registration requirements for both sellers and purchasers participating in exempt sales. Establishes reporting requirements for producers and importers and penalties for failure to report.
Permits expedited procedures for refunds or income tax credits with respect to retail sales of diesel and aviation fuel employed in nontaxable uses. Provides for the payment of interest in connection with such refunds (including provisions for refunds, with interest, of taxes paid before December 31, 1988, the effective date of this tax exemption).
Treats marine retailers of taxable fuel as producers for purposes of the excise tax on diesel and aviation fuels.
Subtitle B: Health Care Continuation Rules - Amends the IRC to impose an excise tax of $100 per day on any nongovernmental employer employing 20 or more employees that fails to comply with group health plan continuation coverage requirements. Describes the required features of this coverage. Repeals the current penalties for compliance failures.
Subtitle C: Employee Benefit Nondiscrimination Rules - Revises provisions relating to nondiscrimination requirements applied to employee accident or health plans, employer-provided group-term life insurance plans, and certain other statutory employee benefit plans. Directs the Secretary of the Treasury to prescribe rules in connection with these revisions no later than November 15, 1988.
Subtitle D: Estate and Gift Taxes - Amends the IRC with respect to estate tax implications of certain transfers with a retained life estate, including provisions establishing a right of contribution in connection with such transfers for estate and gift tax purposes.
Subtitle E: Indian Fishing Rights - Amends the Internal Revenue Code to prohibit the imposition of any Federal income or employment tax in connection with income derived by an Indian or Indian tribe from the exercise of fishing rights secured by treaty, Executive Order, or Act of Congress.
Amends the Social Security Act and other Federal law to direct that any treaty, Executive Order, or Act of Congress securing Indian fishing rights be construed to prohibit the imposition of any State or local income tax on income derived from the exercise of the protected right if such income is exempt from Federal income taxation.
Title IV: Extensions and Modifications of Expiring Tax Provisions - Amends the IRC to extend through 1989 the income tax exclusion for employee educational assistance programs. (Under current law the exclusion expires as of tax year 1988.) Disqualifies as educational assistance any payments relating to graduate school. Waives the maximum excludible amount for graduate students teaching or doing research for certain educational organizations.
Extends through 1988 the tax exclusion of amounts received under qualified group legal services plans. (Under current law the exclusion expired as of tax year 1988.) Limits to $70 the excludible amount of legal insurance premiums.
Modifies provisions governing the low-income housing tax credit with respect to: (1) permissible carryovers of credit dollar amounts; and (2) the removal of restrictions applied to partnerships.
Extends through 1989 the period during which qualified mortgage bonds and mortgage credit certificates may be issued. (Under current law, authority for these programs is due to expire as of 1989.) Revises provisions relating to these bonds, including amendments of: (1) income requirements; (2) arbitrage requirements; and (3) use of loan proceeds. Imposes a recapture tax upon the disposition of a residence subject to federally-subsidized indebtedness. Directs the Comptroller General to study and report to specified congressional committees on the recapture tax and possible alternatives.
Extends for one year, through December 31, 1989, the investment tax credit in connection with depreciable: (1) solar energy property; (2) geothermal property; and (3) ocean thermal property.
Extends through 1989 the income tax credit for qualified research expenditures. (Under current law, the credit is due to expire as of tax year 1989.) Directs the Comptroller General to study and report to specified congressional committees on this credit. Denies an income tax deduction with respect to 50 percent of amounts subject to the credit.
Increases from 50 percent to 64 percent the amount of research and development expenditures that a company must allocate to income from sources within the United States. Establishes special rules for: (1) qualified research and experimental expenditures required by governmental entities; and (2) expenditures attributable to activities in space, in the ocean, or in Antarctica.
Extends the targeted jobs tax credit to cover workers who begin work before 1990. (Under current law, the credit will expire as of tax year 1989.) Reduces from 25 to 23 years the maximum age of economically disadvantaged youth eligible under credit provisions. Reduces from 85 percent to 40 percent the credit for summer youth employees from economically disadvantaged families.
Provides that the prohibition against indirect income tax deductions through pass-through entities shall not apply to any regulated investment company (mutual fund) whose shares are: (1) continuously offered pursuant to a public offering; (2) regularly traded on an established securities market; or (3) held by or for at least 500 persons at all times during the taxable year.
Amends the TRA and the IRC to delay the repeal of certain special reorganization rules for financial institutions, including financially troubled banks. Revises provisions governing: (1) tax attributes that are reduced by 50 percent of financial assistance received by the institution from the Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation; and (2) deductions based on amounts of assistance that are repaid by the taxpayer.
Title V: Revenue Increase Provisions - Subtitle A: Corporate Estimated Taxes - Repeals provisions that permit a corporation that annualizes estimated income tax installments to reduce an instllament payment, without penalty, if the subsequent payment includes at least 90 percent of the earlier deficiency.
Subtitle B: Insurance Provisions - Revises mortality and expense charges in connection with the guideline premium requirements applied in defining "life insurance contract."
Provides a framework for the tax treatment of loans and other amounts received under life insurance contracts that meet criteria qualifying them as modified endowment contracts. Imposes a ten percent tax on any amount received under these contracts that is includible in gross income.
Revises provisions governing the valuation of employee group-term life insurance, eliminating special rules for persons over 63 years old. Directs the Secretary of the Treasury and the Comptroller General each to study and report to specified congressional committees concerning: (1) the effectiveness of revised tax treatment of life insurance and annuity products in preventing the sale of such products primarily for investment purposes; and (2) the policy justification for, and practical implications of, tax treatment of the earnings on the cash surrender value of life insurance and annuity contracts in light of recent reform legislation.
Subtitle C: Loss Transfer Rules for Alaska Native Corporations - Disallows the use of Alaska Native Corporation losses or credits arising after April 26, 1988, to offset income or tax of any other corporation that is not an Alaska Native Corporation. Sets forth related administrative and judicial procedures.
Subtitle D: Estate and Gift Tax Provisions - Directs the Secretary of the Treasury to prescribe tables updating the interest rate assumptions used to determine the value of any annuity, interest for life or a term of years, or remainder or reversionary interest. Provides for ongoing revision of the tables to account for the most recent mortality experience.
Increases the estate and gift tax rates applied to the estates of nonresident aliens, applying to them the same rates that are applied to estates of U.S. citizens and residents. Permits a unified credit of $13,000 to the estates of such aliens.
Disallows the marital deduction for estate and gift tax purposes when property passes to an alien spouse. Permits: (1) the deduction if the property passes in a qualified domestic trust that meets criteria set forth in this Act; and (2) $100,000 of tax-free gifts annually with respect to the gift tax. Describes tax treatment with respect to domestic trusts.
Subtitle E: Long-Term Contract Provisions - Revises the percentage of completion-capitalized cost method of accounting applied in connection with long-term contracts, including special provisions relating to residential construction contracts.
Directs the Secretary of the Treasury to study and report to specified congressional committees on the revenue realization method of accounting for long-term contracts and on improvements to the percentage of completion method of accounting.
Subtitle F: Tax-Exempt Bond Provisions - Establishes loan origination requirements in connection with certain pooled financing bonds (bonds issued as part of an issue more than five percent of whose proceeds are reasonably expected to be used directly or indirectly to finance loans to two or more ultimate borrowers).
Directs the Secretary of the Treasury to submit an explanation to specified congressional committees if regulations relating to student loan incentive payments and student loan bond arbitrage regulations are not issued before July 1, 1989.
Amends the IRC to add restrictions in connection with bonds used to provide residential rental property for family units.
Subtitle G: Excise Tax Provisions - Imposes an excise tax of 45 cents per pound on pipe tobacco manufactured in or imported into the United Statess.
Revises the distilled spirits tax credit for flavors content, limiting its applicability to instances when flavors remain in the distilled beverage after the distillation process.
Subtitle H: Other Revenue Increase Provisions - Increases from one percent to two percent the penalty in connection with bad checks under internal revenue law.
Treats charges for basic local telephone service in connection with the first telephone line of a taxpayer residence as nondeductible personal expenses.
Requires the information returns filed by partnerships having tax-exempt partners to include reporting of unrelated business taxable income.
Broadens the scope of IRC provisions concerning losses from wash sales of stock or securities to apply them also to contracts or options to acquire or sell stock or securities.
Adds to the types of property included within the framework of special rules relating to interest paid on deferred tax liability of nondealers with respect to installment obligations. (Current law applies only to real property.)
Revises limitations on net operating loss carryforwards and certain built-in losses following ownership changes in connection with the acquisition of employer securities by an employee stock ownership plan.
Title VI: Other Substantive Revenue Provisions - Subtitle A: Provisions Relating to Individuals - Permits an 80 percent income tax deduction of contributions to or for an institution of higher education, even if the taxpayer receives, as a result of paying such an amount, the right to seating or the right to purchase seating in the institution's athletic stadium.
Amends income tax provisions relating to the nonrecognition of gain from the sale of a taxpayer's principal residence to provide that in cases when a taxpayer dies after the sale of the old residence and before the purchase of a new one: (1) his or her consent to the allotment, in accordance with regulations, between spouses of certain gain on the sale will be presumed; and (2) the requirement that the new residence be used as the principal residence of the taxpayer will not apply.
Permits a 100 percent tax deudction (currently 80 percent) of expenses for food or beverages: (1) required by Federal law to be provided to crew members of certain vessels; or (2) provided on an oil or gas platform or drilling rig located offshore or in Alaska.
Amends the Tax Reform Act of 1984 to add a transitional rule with respect to relieving innocent spouses of income tax liability in certain cases.
Excludes from the gross income of an individual any amount of a Christa McAuliffe teacher fellowship that is spent for the benefit of a school or school system rather than for the benefit of the individual recipient.
Sets forth conditions under which a parent may elect to claim the unearned income of a child on the parental tax return. Permits this option only if the relevant income consists exclusively of less than $5,000 in interest and dividends.
Amends the IRC to permit an income tax deduction for jury duty pay that a taxpayer-employee remits to an employer in exchange for continuing the employee's normal compensation during the jury duty period. Permits the same amount as an exclusion from gross income to taxpayers who do not itemize deductions.
Permits rural mail carriers to compute the amount of the income tax deduction for use of their automobiles in performance of mail services: (1) by using a standard mileage rate for all miles of such use equal to 150 percent of the basic standard rate; or (2) without applying the limitation on deductions generally applicable in cases when the business use of the automobile accounts for 50 percent, or less, of its use.
Prohibits the use of 150 percent of the basic standard mileage rate in determining the allowable deduction if the taxpayer claims an investment tax credit for depreciation deduction for such automobile.
Amends the IRC to exclude from the gross income of an individual any interest received or accrued on a U.S. savings bond to the extent such amount is used to pay qualified tuition expenses (tuition, fees, books, supplies, and equipment) in connection with the educational expenses of the taxpayer, spouse, or dependents at a qualified institution of higher education or vocational school. Reduces the permissible excludible amount when the taxpayer's adjusted gross income exceeds $40,000 ($60,000 joint return).
Directs the Secretary of the Treasury to study and report to specified congressional committees on the feasibiliy of using stamps or similar programs to encourage savings by parents toward the purchase of Series EE bonds.
Denies the income tax dependency exemption with respect to a dependent student who has attained age 24 by the close of the calendar year.
Amends the IRC to permit a taxpayer aged 55 or older to qualify for the one-time income tax exclusion of gain from the sale of a principal residence even if physical or mental incapacity has necessitated the taxpayer's leaving the relevant property to be cared for in a health care facility or in a relative's home.
Subtitle B: Provisions Relating to Accounting and Agriculture - Amends the IRC to provide that the income tax rules requiring cost capitalization shall not apply in connection with the qualified artistic work expenses of freelance writers, artists, and photographers. Excludes from qualified expenses those related to printing, photographic plates, motion picture films, video tapes, and similar items.
Exempts from the required application of uniform inventory cost capitalization rules any animal produced in a farming business, regardless of the animal's preproductive period.
Permits taxpayers who produce pistachio trees to elect to deduct preproductive costs associated with their planting, cultivation, and maintenance.
Revises treatment of single purpose agricultural or horticultural structures under the accelerated cost recovery system, assigning to them longer class lives.
Revises the applicable depreciation method for property used in a farming business.
Classifies trees or vines bearing fruit or nuts as ten-year property and provides for their depreciation based on the straight line method.
Amends the IRC to apply to livestock used for draft, breeding, dairy, or sporting purposes a special rule that permits a farmer or rancher who sells livestock solely because of drought conditions to elect to defer until the following year the taxation of the resulting income.
Permits a corresponding tax deferral of disaster payments received under title II of the Disaster Assistance Act of 1988.
Amends special rules for nondealers of real property to permit pledges of certain installment obligations to secure indebtedness incurred to refinance previous indebtedness.
Provides for the promulgation of rules by the Secretary of the Treasury in connection with indirect holdings of stocks through trusts in connection with qualified personal service corporations.
Subtitle C: Pensions and Employee Benefits - Excludes church plans from statutory employee benefit plans for purposes of statutes governing benefits under discriminatory plans.
Revises provisions affecting cafeteria plans maintained by educational institutions.
Modifies nondiscrimination rules with respect to employee annuity contracts purchased by tax-exempt (501(c)(3)) organizations.
Changes required beginning dates for distributions of benefits under governmental and church pension plans.
Creates special rules in connection with limitations on benefits and contributions under State and local government plans. Exempts certain governmental plans from minimum participation rules. Permits an employer to elect to apply such rules separately with respect to certain public safety personnel.
Directs the Secretary of the Treasury to study and report to specified congressional committees on the application of specified participation requirements to Government contractors who establish separate plans to meet requirements that they provide certain employee retirement benefits.
Includes as "collectibles" the coins issued by any State, thus requiring their acquisition by an individual retirement account or by an individually-directed account to be treated as a distribution for certain income tax purposes.
Revises provisions governing: (1) determination of required employer contributions toward the minimum funding standard with respect to multiemployer plans; and (2) deduction limitations in connection with employer contributions to these same plans.
Reduces from 20 years to 15 years the length of service requirement applicable in determining the eligibility of police or fire fighters for special limitations of benefits under defined benefit plans.
Excepts any State-law mandated disposition of qualified employer securities by a corporate employee stock ownership plan from the excise tax on ESOP dispositions.
Amends accounting rules governing the year of inclusion of compensation deferred under certain plans to: (1) declare the rules to be inapplicable to both nonelective deferred compensation and basic employee benefit plans; and (2) remove nongovernmental tax-exempt organizations from coverage under the rules. Directs the Secretary of the Treasury to study and report to specified congressional committees on tax treatment of deferred compensation paid by State and local governments and tax-exempt organizations.
Treats air cargo transportation as a tax-excludible fringe benefit.
Adds provisions to cover mergers and consolidations of plans or transfers of plan assets in connection with bridge banks. Directs the Secretary of the Treasury to study and report to specified congressional committees on appropriate methods of allocating assets under these new rules.
Permits special income averaging with respect to lump-sum distributions to an alternate payee who is the employee's spouse or former spouse. Applies this provision retroactively to 1985 and thereafter.
Increases from ten percent to 15 percent the excise tax on reversions of qualified plan assets to an employer.
Specifies the number of working hours required for part-time employees in connection with certain benefit plan requirements of small companies.
Accords income tax treatment as a qualified cash or deferred arrangement (401(k) plan) to any defined contribution plan established and maintained by a rural telephone cooperative. Applies to such plans the same accounting rules as are currently applied to the plans of rural electric cooperatives.
Directs the Secretary of the Treasury to study and report to specified congressional committees concerning the employment status, for income and employment tax purposes, of providers of technical services, such as engineering, drafting, and computer programming.
Subtitle D: Insurance Provisions - Prohibits the assessment of any pre-1987 income tax deficiency against a qualified group self-insured workers' compensation fund to the extent the deficiency is attributable to the timing of the policyholder dividend deductions.
Permits an additional income tax deduction to property and casualty insurance companies that are required to discount unpaid losses. Limits the deduction to companies that make special estimated tax payments in an amount equal to the tax benefit attributable to the deduction. Requires the companies to establish and maintain a special loss discount account.
Treats as life insurance policies certain self-funded death benefit plans maintained by churches for their employees, thus excluding the benefits provided through the plans from gross income for income tax purposes.
Amends the IRC to provide that, in cases of securities issued or guaranteed by the U.S. Government, each independent agency shall be treated as a separate issuer for purposes of the diversification test applied in connection with variable contracts based on segregated asset accounts of life insurance companies.
Subtitle E: Excise Tax Provisions - Authorizes the Secretary of the Treasury to prescribe de minimis tolerances for the volume of wine in bottles for purposes of the excise tax on wine.
Permits wholesale distributors of gasoline to claim refunds of gasoline tax for payment to their ultimate tax-exempt purchasers.
Authorizes the Secretary of the Treasury to authorize, under certain conditions, exemptions from the excise tax on heavy trucks and trailers sold at retail, upon the determination that the full benefit of the exemption will accrue to the United States.
Requires that the reduced gasoline tax rate (3.4 cents instead of 9.1 cents) be applied with respect to gasoline used to produce gasohol after the time of the relevant removal or sale.
Amends the IRC to exempt certain academic institutions and scientific research institutions from the $250 user fee (occupational tax) in connection with permits for research uses of specially denatured distilled spirits.
Exempts from the occupational tax on distilled spirits plants proprietors of plants producing 10,000 or fewer proof gallons per year exclusively for fuel use.
Provides that the manufacturers excise tax on bows, arrows, and related accessories shall be due and payable on the date for filing the appropriate return. (This provision corresponds to the treatment of sport fishing equipment under current law.)
Amends the IRC to extend the potential commencement date of the Oil Spill Liability Trust Fund and petroleum tax.
Exempts from the harbor maintenance tax any port use in connection with cargo owned or financed by a nonprofit organization and certified by the U.S. Customs Service as intended for humanitarian or development assistance uses overseas.
Permits only a single imposition of the harbor maintenance (port) tax on cargo moving under a single bill of lading that undergoes multiple loading or unloading at any U.S. ports for relay to its ultimate destination in Alaska, Hawaii, or any U.S. possession.
Subtitle F: Foreign Provisions - Establishes new guidelines for the treatment of any dual resident company that reorganizes as a foreign corporation, particularly with respect to the excess loss account of such a corporation. Sets forth criteria under which the corporation will be treated as a domestic corporation for tax purposes.
Provides that the taxpayer-investor, rather than the passive foreign investment company, shall elect treatment as a qualified electing fund.
Amends the Tax Reform Act of 1984 to revise the maximum debt-to-equity ratio permitted to certain controlled foreign corporations.
Sets forth a new framework permitting a qualified insurance branch of a controlled foreign corporation to elect to be treated as a separate foreign corporation for certain tax purposes.
Amends provisions relating to forward contracts, future contracts, options, and similar instruments in connection with foreign currency transactions.
Permits controlled foreign corporations, under certain circumstances, to elect to treat certain insurance income as subpart F income.
Revises provisions governing the treatment of interest on U.S. obligations received by banks organized in U.S. possessions.
Exempts from the 30 percent tax on nonresident alien individuals any gambling winnings from specified games.
Permits controlled foreign corporations that are insurance companies to elect to be treated as domestic corporations for certain tax purposes. Sets out a framework to govern such an election.
Exempts from all Federal, State, and local taxation any earnings on, and distributions from, the Enjebi Community Trust Fund.
Excludes from gross income certain cost-of-living allowances received by judicial officers or employees serving outside the continental United States.
Directs the Secretary of the Treasury to study and report to specified congressional committees concerning determinations of U.S. resident status for Federal tax law purposes.
Declares that specified treaties with the United Kingdom (on behalf of Bermuda) and with Barbados shall not prevent the imposition of a U.S. insurance excise tax with respect to coverage for 1989 and thereafter.
Excludes from gross income, for purposes of both the Federal and the Guam territorial income tax, any amount received in connection with judicial review by the District Court of Guam of certain claims adjudicated between July 21, 1944, and August 23, 1963, concerning just compensation for land.
Subtitle G: Estate Tax Provisions - Amends the IRC with respect to the valuation of farm land for estate tax purposes, permitting a surviving spouse to enter into a cash lease of farm or other real property with a family member and still have the property valued under use value principles rather than according to its highest and best use.
Amends estate tax and gift tax provisions relating to the application of qualified terminable interest property rules to joint and survivor annuities.
Subtitle H: Tax-Exempt Bond Provisions - Revises the definition of "manufacturing facility" for bond purposes to permit up to 25 percent of bond proceeds to be used in connection with certain nonmanufacturing facilities on the same site as the manufacturing facility without affecting the bond's tax-exempt status.
Revises provisions relating to arbitrage rebate requirements in connection with tax and revenue anticipation bonds.
Directs the Secretary of the Treasury to: (1) make specified amendments to regulations governing the valuation of ground rent leases for purposes of mortgage bond purchase price requirements; and (2) issue guidance as to the application of the private security or payment test to tax-exempt bond financing of hazardous waste clean-up activities involving privately owned land.
Amends the IRC to add to the category of tax-exempt facility bonds any bonds that are part of an issue 95 percent or more of whose net proceeds are used to provide high-speed intercity rail facilities to be owned by a governmental unit and made available to the general public.
Exempts such bonds from: (1) the volume cap generally applicable to private activity bonds (75 percent exemption); and (2) limitations on the use of bond proceeds for land acquisition.
Amends other tax-exempt bond law, including provisions relating to: (1) arbitrage rebate requirements; (2) bonds issued by volunteer fire departments; and (3) the small issuer exception.
Subtitle I: Provisions Relating to Exempt Organizations - Amends the TRA and the IRC with respect to: (1) certain games of chance operated by nonprofit organizations and not treated as unrelated business for purposes of the tax on unrelated business income; (2) the purchase of group insurance by cooperative hospital service organizations; and (3) the cancellation of certain Government or federally-guaranteed loans in determining the tax-exempt status of benevolent, mutual, or cooperative organizations.
Subtitle J: Taxpayer Rights and Procedures - Omnibus Taxpayer Bill of Rights - Part I: Taxpayer Rights - Requires the Secretary of the Treasury (Secretary) to prepare a statement setting forth in nontechnical terms: (1) the rights and obligations of a taxpayer and of the Internal Revenue Service (IRS) during a tax audit; (2) the procedures by which a taxpayer may appeal adverse decisions, prosecute refund claims, and file complaints; and (3) the procedures that the IRS may use in enforcing revenue laws. Directs the Secretary to transmit drafts of the statement to specified congressional committees and to distribute the final statement to all taxpayers the Secretary contacts with respect to the determination or collection of any tax (other than in connection with providing tax forms).
Requires the IRS, upon taxpayer request, to permit any taxpayer to record any interview regarding the determination or collection of any tax. Authorizes the IRS interviewer to record the interview if the taxpayer has been given prior notice and is provided with a transcript of the recording. Requires the interviewer to explain to the taxpayer the audit or collection process, including the taxpayer's rights with respect to the relevant process.
Directs the Secretary to issue regulations with respect to the time and place of certain taxpayer interviews and examinations of taxpayer records.
Requires the Secretary to abate any portion of any penalty or addition to tax attributable to erroneous advice in writing given to a taxpayer by an IRS officer or employee in response to the taxpayer's specific inquiry.
Authorizes the IRS Ombudsman, upon application filed by a taxpayer, to issue a Taxpayer Assistance Order if, in the determination of the Ombudsman, the taxpayer is suffering or is about to suffer a significant hardship as a result of the manner in which the Secretary is administering the internal revenue laws. Allows the terms of the Taxpayer Assistance Order to require the Secretary to release property of the taxpayer levied upon or to cease or refrain from certain actions.
Directs the Secretary to issue regulations with respect to Taxpayer Assistance Orders, including provisions to assure full, fair, and impartial due process for affected taxpayers.
Prohibits records of tax enforcement results from being used to evaluate certain IRS personnel or to impose or suggest production quotas.
Requires any temporary regulation issued by the Secretary to be issued as a proposed regulation as well. Terminates any temporary regulation three years after its issuance.
Directs the Secretary to submit proposed regulations to the Administrator of the Small Business Administration for comment on their impact on small business.
Amends the IRC to specify required contents for tax due notices and deficiency notices, including the basis of the deficiency and a breakdown of the total amount into tax, interest, and penalty. Directs the Secretary of the Treasury to report to specified congressional committees on the steps taken to implement these notice requirements.
Authorizes the Secretary to enter into an agreement with a taxpayer under which the taxpayer may pay tax liability in installments if the Secretary determines that such an agreement will facilitate collection of the liability. Permits the Secretary, after proper notice and a hearing, to modify or annul the agreement upon the finding that the financial condition of the affected taxpayer has significantly changed. Permits the Secretary to modify or annul an agreement if the taxpayer fails to pay any installment or any other tax liability when due or fails to provide requested financial information.
Establishes in the IRS the Office for Taxpayer Services, under the supervision of an Assistant Commissioner of Internal Revenue. Directs the Assistant Commissioner to: (1) be responsible for telephone, walk-in, and educational services, and for the design and production of tax and information forms; and (2) prepare annually for presentation to specified congressional committees a joint report (with the Taxpayer Ombudsman for the IRS) on the quality of taxpayer services.
Part II: Levy and Lien Provisions - Extends from ten to 30 days the period between the required notice to a person who neglects or refuses to pay tax liability and a levy on such person's salary, wages, or other property. Specifies information that must be incorporated in such notice, including possible alternative actions and the appropriate appeals procedures.
Revises the list of property exempt from levy to increase the exempt amount permitted for certain personal effects, the property of a business, and wages. Exempts from levy: (1) welfare payments under title IV (aid to families with dependent children) of the Social Security Act; (2) supplemental security income under title XVI of the Social Security Act (aid for the aged, blind, and disabled); (3) State or local government public assistance programs whose eligibility requirements are based on income or need; and (4) unemployment training allowances under the Job Training Partnership Act. Provides an express exemption, except under limited circumstances, for the taxpayer's principal residence.
Prohibits a levy on any property when levy and sales expenses would exceed the fair market value of the levied property.
Permits the Secretary to demand surrender of bank accounts only after 21 days in escrow have passed since service of the notice of levy on the accounts. Adds to current law a number of situations in which the Secretary must release a levy. Directs the Secretary of the Treasury to provide for expedited determinations relevant to levies on tangible personal property used in business if the levy would prevent the taxpayer from carrying on the business.
Authorizes the owner of property seized by levy to request that the property be sold within 60 days and requires the Secretary of the Treasury to comply with such requests.
Applies to jeopardy levies the administrative and judicial procedures currently applicable to jeopardy assessments.
Permits a taxpayer to bring a civil action against the United States in the Tax Court for judicial review of jeopardy levies and assessments. (Under current law an action for judicial review of jeopardy assessments may be filed only in district court.) Increases the time during which a taxpayer may petition for review. Describes jurisdictional requirements.
Allows an administrative appeal of tax liens and requires the immediate issuance of a certificate of release of any lien determined to have been erroneously filed.
Part III: Proceedings by Taxpayers - Authorizes an award of reasonable administrative costs to the prevailing party in proceedings by taxpayers before the IRS.
Permits a taxpayer to bring a civil action for damages resulting from: (1) the failure of any Federal officer or employee to release a tax lien on the taxpayer's property; and (2) the reckless or intentional disregard of internal revenue laws by any Federal officer or employee. Describes limitations applicable to such actions.
Authorizes a damage award, to a $10,000 maximum, to the United States in cases of frivolous or groundless taxpayer claims.
Imposes penalties on professional tax preparers who disclose information provided in connection with tax return preparation or who make nontax use of such information.
Part IV: Tax Court Jurisdiction - Grants to the Tax Court jurisdiction to enjoin premature assessments if the taxpayer has filed a timely petition for review. Provides for review of such injunctive orders by the U.S. Court of Appeals.
Grants to the Tax Court jurisdiction to enforce payment of refunds of overpayment and interest to taxpayers. Places on the Secretary the burden of proof of justifying any failure to refund, credit, or offset relevant amounts with respect to a taxpayer. Entitles a prevailing taxpayer to reasonable litigation costs and an interest rate of 120 percent of the overpayment rate with respect to refunds.
Grants to the Tax Court jurisdiction to: (1) review jeopardy assessment sales of assets; (2) redetermine interest under certain circumstances when a taxpayer claims an overpayment of interest; and (3) modify decisions in certain estate tax cases whose payment dates have been extended.
Subtitle K: Other Administrative Provisions - Permits, under certain circumstances, the disclosure of income tax returns and return information to officials of municipalties with a population of more than 250,000. (Current law allows disclosure when the population exceeds 2,000,000.)
Repeals provisions of the IRC and of the Economic Recovery Tax Act of 1981 that require the Secretary of the Treasury to study and report to the Congress concerning: (1) the 1983 payment-in-kind (PIK) program and its tax treatment; and (2) tax accounting methods for inventory.
Amends the Tax Reform Act of 1984 to require reporting concerning possessions corporations and foreign sales corporations every four years rather than annually.
Revises provisions relating to class lives assigned under the accelerated cost recovery system. Directs the Secretary of the Treasury, through an office established in the Treasury, to monitor and analyze actual experience with respect to all depreciable assets.
Repeals reporting requirements associated with the already repealed crude oil windfall profit tax.
Subtitle L: Provisions Relating to Corporations and Personal Holding Companies - Amends IRC provisions relating to the Secretary of the Treasury's authority to pay refunds to certain fiduciaries of insolvent members of affiliated groups.
Includes interest received by a broker or dealer among types of income not considered as personal holding company income. Excludes from this category as well dividends received by a qualified bank holding company from a 25-percent owned bank during any taxable year ending in 1989 or 1990.
Authorizes the Secretary of the Treasury to waive specified appraisal requirements in connection with charitable contributions of property.
Calls for the nonrecognition of gain or loss in connection with any distribution by cooperative housing associations of dwelling units that meets specified conditions.
Subtitle M: Miscellaneous Provisions - Repeals Federal law that sets a $270,000,000,000 limit on the face amount of bonds that the Secretary of the Treasury has authority to issue at interest rates exceeding 4.25 percent.
Extends from January 1, 1990, to January 1, 1991, the date by which a well may be drilled or a facility placed in service and still have fuel it generates qualify for the income tax credit for producing fuel from a nonconventional source.
Revises provisions relating to adjustments for the book value of corporations for purposes of computing alternative minimum taxable income.
Sets forth criteria to govern the employment status of dependent care services providers for employment tax purposes. Directs the Secretary of the Treasury to report to specified congressional committees on the tax status of day care providers paid under enumerated programs.
Title VII: Railroad Unemployment and Retirement Programs - Railroad Unemployment Insurance and Retirement Improvement Act of 1988 - Subtitle A: Financing Provisions - Amends the Railroad Unemployment Insurance Act to redefine compensation to provide that in computing the compensation paid to any employee, no part of any month's compensation in excess of the monthly compensation base shall be recognized. Establishes a formula for such monthly compensation base.
Directs the Railroad Retirement Board (the Board) to: (1) compute the monthly compensation base according to certain guidelines; (2) compute the maximum daily benefit rate applicable to days of unemployment and sickness; and (3) publish notice of such computation in the Federal Register. Revises the guidelines for employers' contributions.
Sets forth a special transition rule for public commuter railroads with respect to each of calendar years 1988 and 1989 to provide that such a carrier's contribution shall be equal to the amount of benefits attributable to such carrier (thus allowing such carriers to cover their unemployment and sickness costs in the Railroad Unemployment Compensation Program on a "reimbursable basis" for such years). Requires the Board to maintain an individual employer record for each employer, and the records necessary to determine pooled charges and pooled credits, as well as unallocated balances for the system. Provides for the combining of joint individual employer records upon the employers' request in the event of a merger, consolidation, unification, or reorganization. Establishes a 12 percent employer contribution limit (or 12.5 percent when a 3.5 surtax is in effect). Revises the guidelines for employee representatives' contributions to require that such a representative pay a contribution relating to so much of the compensation paid for representation services as is not in excess of a specified monthly compensation base. Extends certain remedies to an employer or employee representative who contests the contribution rate made applicable to him or her by the Board.
Establishes deadlines by which the Board shall proclaim certain account balances, pooled ratios, and surcharge rates. Requires the Board to publish notice of such proclamations in the Federal Register.
Increases from 0.5 to 0.65 the percentage of employer and employee contributions which must be credited to the railroad unemployment insurance administration fund.
Requires the Board to: (1) notify the base year employer when an employee files a claim for benefits; (2) afford such employer opportunity to respond before making an initial determination on such claim; and (3) notify such employer when the Board initially makes a determination to make benefit payments under a claim. Prescribes guidelines for administrative and judicial review of Board determinations to make payments under a claim.
Requires the Board to report annually to the Congress regarding the financial status of the railroad unemployment insurance system.
Amends the IRC with respect to railroad unemployment repayment tax to impose: (1) an excise tax upon every rail employer equal to four percent of total rail wages paid per month; and (2) an income tax upon rail employee representatives equal to four percent of rail wages paid to them each month. Terminates such tax if loans to the railroad unemployment fund are repaid. Provides for the continuation of certain surtax rates through 1990. Makes such taxes applicable to remuneration paid after December 31, 1988.
Directs the Comptroller General to report to the Congress the results of a study concerning the frequency of fraud and payment errors in the railroad unemployment compensation program.
Delays until October 1, 1990 (currently 1989), the due date for the report of the Commission on Railroad Retirement Reform to the President and the Congress.
Subtitle B: Benefit and Other Adjustments - Imposes a two-week waiting period with respect to both unemployment and sickness benefits.
Amends the daily unemployment or sickness benefit rates to prohibit daily benefits from exceeding: (1) $24.00 until July 1, 1988; and (2) $30.00 for registration periods beginning after June 30, 1988, but before July 1, 1989.
Redefines "qualified employee" to mean an employee who received compensation at least two and one-half times the monthly compensation base for months in the base year.
Increases from $10.00 to $15.00 the maximum permitted subsidiary remuneration.
Subtitle C: Retirement Act Amendments - Entitles certain employees to a specified lump sum benefit equal to the employee's contribution to the retirement fund made from compensation for which the employee did not receive service credit. Restricts such lump-sum payment to employees with at least ten years' service and who are retiring. Eliminates as a disqualifier for annuity benefits any compensated service rendered after receipt of annuity benefits to the annuitant's last employer. Repeals the requirement that an annuitant relinquish all rights to return to the service of the person by whom the annuitant was last employed in order to qualify for annuity benefits.
Increases the earnings limit for disability annuitants from $200 a month to $400 a month (and from $2,400 a year to $4,800 a year).
Redefines "war service period" to provide that the period June 15, 1948, to December 15, 1950, shall be deemed a war service period with respect to persons who returned to railroad employment without an intervening employment following military service.
Title VIII: Amendments Relating to Social Security Act Programs - Subtitle A: Old-Age, Survivors, and Disability Insurance and Related Provisions - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act and title XVI (Supplemental Security Income for the Aged, Blind, or Disabled) to provide interim benefit payments in cases when final decisions are delayed.
Amends title II of the Social Security Act to: (1) eliminate in connection with the application of the earnings test, proration of the annual exempt amount when a beneficiary dies; (2) set out a framework for the incremental reduction in windfall benefits; (3) deny benefits to persons deported or ordered to be deported because of associations with the Nazi government of Germany during World War II; (4) revise the term of office of public members of the boards of trustees of the various social security trust funds; and (5) continue disability insurance benefits and Medicare eligibility pending appeals.
Amends the IRC and the Social Security Act to provide an exemption from taxation under the Federal Insurance Contributions Act (employment tax) and from benefits under the social security program for employers and their employees in cases when both are members of religious groups opposed to participation in such a program. Requires both the employer and the employee to submit an application for the tax exemption.
Amends the Social Security Act to direct the Secretary of Health and Human Services to establish and conduct a Blood Donor Locator Service, under the direction of the Commissioner of Social Security, to be used to obtain and transmit to any authorized person the most recent mailing address of any blood donor who, as indicated by the donated blood or by the history of the subsequent use of the blood, has the virus for acquired immune deficiency syndrome (AIDS), in order to inform the donor of the possible need for medical care and treatment.
Sets forth recordkeeping requirements applicable to authorized persons receiving address information, including measures regarding the security and confidentiality of the information.
Amends IRC provisions relating to disclosure of taxpayer identity information to direct the Secretary of the Treasury to disclose the mailing address of taxpayers to the Blood Donor Locator Service. Sets forth safeguards applicable to the disclosed information.
Amends the Social Security Act to: (1) require an individual to present satisfactory proof of a social security account number before receiving any social security benefits; (2) permit eligible surviving spouses to substitute a certificate of election for an application to establish entitlement for certain reduced survivors' benefits; (3) revise the way in which the windfall benefit guarantee amount is calculated; and (4) consolidate reporting on continuing disability reviews.
Amends the Omnibus Budget Reconciliation Act of 1987 to exclude from social security taxes group-term life insurance an employer provides for employees leaving the employer's employ on or before December 31, 1988.
Amends Social Security Act and IRC provisions relating to: (1) the applicability of the Federal pension offset to Federal employees electing coverage under the FERS system; and (2) social security coverage of certain classifications of Federal employees and foreign service personnel.
Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to exclude from OASDI coverage cash wages paid to seasonal agricultural laborers who: (1) are paid on a piece rate basis; (2) are paid less than $150 per year by their employer for such labor; (3) commute daily from their permanent residence; and (4) were employed in agriculture less than 13 weeks in the preceding calendar year. (Currently, such wages are excluded if the agricultural laborer is paid less than $150 per year or the employer spends $2,500 or more on labor for the year.) Amends the IRC to prohibit the imposition of social security taxes on such wages.
Excludes certain employer contributions of State or local government employers from "wages" for employment tax purposes.
Directs the Secretary of Health and Human Services to report to specified congressional committees concerning: (1) applications for disability-related benefits associated with the complex related to acquired immune deficiency syndrome (AIDS); and (2) arrangements for coordinating Social Security Administration and State disability agency programs with respect to providing disability-related benefits for persons claiming AIDS disabilities.
Subtitle B: Public Assistance Provisions - Amends part A (Aid to Families with Dependent Children (AFDC)) of title IV of the Social Security Act and the Consolidated Omnibus Budget Reconciliation Act of 1985 to extend the moratorium on reductions in payments to States as a result of errors identified by the quality control system in connection with the AFDC program. Directs the Secretary of Health and Human Services to review current policies with respect to State use of AFDC funds to meet emergency needs and to report to the Congress recommendations for changes to improve emergency needs capability.
Amends title XVI (Supplemental Security Income) (SSI) of the Social Security Act to exclude the value of Federal housing assistance in determining income and resources under the SSI program.
Amends part E (Foster Care and Adoption Assistance) of title IV of the Social Security Act to extend, through FY 1989, Federal assistance to States and localities in establishing and carrying out independent living initiatives programs to assist children in making the transition from foster care to independent living.
Permits the FY 1989 expenditure of unobligated independent living program payments made to a State for FY 1987.
Authorizes a State to include in its independent living program: (1) foster care children for whom the State is not making foster care maintenance payments; and (2) for six months, children for whom such care or payment was discontinued on or after their 16th birthday.
Requires the application of procedural safeguards in connection with any determination regarding the services needed to assist a child in the transition from foster care to independent living.
Prohibits the use of Federal funding for independent living initiatives programs for room or board.
Subtitle C: National Commission on Children - Amends title IX (General Provisions) of the Social Security Act with respect to the National Commission on Children to: (1) delay both the interim and final reports of the Commission by six months; (2) revise the length of terms and meeting requirements; and (3) limit related authorizations to FY 1989 and 1990.
Subtitle D: Unemployment Compensation - Amends the Omnibus Budget Reconciliation Act of 1987 to modify the due dates of interim and final reports on certain self-employment demonstration projects.
Subtitle E: Medicare and Medicaid - Part I: Provisions Relating to Part A of Medicare - Amends title XVIII (Medicare) of the Social Security Act to: (1) extend the authority for disproportionate share payments for hospitals from 1990 to 1995; (2) revise provisions relating to bad debt collection efforts; (3) modify the computation of wage indices in connection with certain rural areas (requires the Secretary of Health and Human Services (HHS) and the Prospective Payment Assessment Commission to report to the Congress on alternative methods for reimbursing hospitals in affected areas); (4) give specific direction to the Secretary of HHS in connection with demonstration projects with respect to chronic ventilator-dependent units in hospitals, mandating five such projects of at least three years each; and (5) provide for election of personnel policy for employees of the Prospective Payment Assessment Commission.
Part II: Relating to Parts A and B of Medicare Program - Directs the Secretary of HHS to provide for demonstration joint nursing graduate education programs in five hospitals for specified periods and to report to the Congress on the programs. Describes program activities that will be allowable as reasonable costs of education, to be reimbursed by Medicare.
Amends title XVIII (Medicare) of the Social Security Act to: (1) eliminate waivers of certain rules relating to Health Maintenance Organization enrollment; (2) increase authorizations for the research program on patient outcomes in connection with specified medical and surgical procedures; and (3) delay the reporting deadline for the U.S. Bipartisan Commission on Comprehensive Health Care.
Part III: Provisions Relating to Part B of Medicare - Amends Medicare provisions with respect to: (1) travel fees relating to specimen collection from individuals by clinical laboratories; (2) budget neutrality revisions in connection with the fee schedule for certified registered nurse anesthetists; (3) coverage of psychologists' services provided at community mental health centers; and (4) duties of the Physician Payment Review Commission.
Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to extend for an additional year the moratorium on competitive bidding demonstrations for laboratory services.
Authorizes the Secretary of HHS to pay for medically necessary services of a medical attendant on commercial flights if such transportation is covered as ambulance services.
Part IV: Provisions Relating to Medicaid - Prohibits the Secretary of HHS from issuing any final regulation prior to May 1, 1989, changing the treatment of voluntary contributions or provider-paid taxes by States to receive Federal matching funds under the Medicaid program.
Amends provisions of title XIX (Medicaid) of the Social Security Act with respect to: (1) the long-term care waiver program; (2) an extension of the time period for submission of correction and reduction plans for certain intermediate care facilities for the mentally retarded; (3) Federal financial participation for case-management services; (4) the calculation of premium amounts for extended medical assistance; and (5) the waiver for home and community-based services for individuals who would otherwise require hospital or facility care.
Title IX: Trade Provisions - Makes a number of technical amendments to the Trade Act of 1974, the Omnibus Trade and Competitiveness Act of 1988, the Tariff Act of 1930, and the Tariff Schedules of the United States.
Amends Federal law concerning the calculation of relative values in the operations of petroleum refineries in a foreign trade zone.
Amends the Small Business Innovation Development Act of 1982 to direct the Comptroller General to submit to appropriate congressional committees recommendations as to whether to amend the Small Business Innovation Research program in specified ways.
Extends until January 1, 1993, certain existing suspensions of duty and duty reductions applicable to an enumerated list of items.
Title X: Manassas National Battlefield Park - Manassas National Battlefield Park Amendments of 1988 - Amends Federal law to include a a specified area of land within the Manassas National Battlefield Park, Virginia. Provides that all right, title, and interest in such land shall vest in the United States. Requires the United States to compensate the owners of such land. Prohibits the Secretary of the Interior from allowing the unauthorized use of such land. Allows the Secretary to permit the termination of all operations on and the removal of equipment, facilities, and personal property from such land.
Directs the Secretary to cooperate with Virginia to promote the scenic preservation of views from within the Park.
Requires the Secretary to conduct a study regarding the relocation of specified highways in, and in the vicinity of, the Park. Authorizes appropriations.