S.949 - Revenue Reconciliation Act of 1997105th Congress (1997-1998)
|Sponsor:||Sen. Roth Jr., William V. [R-DE] (Introduced 06/20/1997)|
|Committees:||Senate - Finance|
|Committee Reports:||S. Rept. 105-33|
|Latest Action:||06/27/1997 Returned to the Calendar. Calendar No. 92. (All Actions)|
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Summary: S.949 — 105th Congress (1997-1998)All Bill Information (Except Text)
Introduced in Senate (06/20/1997)
TABLE OF CONTENTS:
Title I: Child Tax Credit and Other Family Tax Relief
Title II: Education Incentives
Subtitle A: Tax Benefits Relating to Education Expenses
Subtitle B: Expanded Education Investment Savings
Subtitle C: Other Education Initiatives
Title III: Savings and Investment Incentives
Subtitle A: Retirement Savings
Subtitle B: Capital Gains
Title IV: Estate, Gift, and Generation-Skipping Tax
Title V: Extensions
Title VI: Incentives for Revitalization of the District of
Title VII: Miscellaneous Provisions
Subtitle A: Provisions Relating to Excise Taxes
Subtitle B: Provisions Relating to Pensions and Fringe
Subtitle C: Revisions Relating to Disasters
Subtitle D: Provisions Relating to Small Businesses
Subtitle E: Foreign Provisions
Subtitle F: Other Provisions
Title VIII: Revenues
Subtitle A: Financial Products
Subtitle B: Corporate Organizations and Reorganizations
Subtitle C: Other Corporate Provisions
Subtitle D: Administrative Provisions
Subtitle E: Excise Tax Provisions
Subtitle F: Provisions Relating to Tax-Exempt Entities
Subtitle G: Foreign Provisions
Subtitle H: Other Revenue Provisions
Title IX: Foreign-Related Simplification Provisions
Subtitle A: General Provisions
Subtitle B: Treatment of Controlled Foreign
Subtitle C: Repeal of Excise Tax on Transfers to
Subtitle D: Information Reporting
Subtitle E: Determination of Foreign or Domestic Status
Subtitle F: Other Simplification Provisions
Title X: Simplification Provisions Relating to Individuals
Subtitle A: Provisions Relating to Individuals
Subtitle B: Provisions Relating to Businesses Generally
Subtitle C: Simplification Relating to Electing Large
Subtitle D: Provisions Relating to Real Estate
Subtitle E: Provisions Relating to Regulated Investment
Subtitle F: Taxpayer Protections
Title XI: Simplification Provisions Relating to Estate and
Title XII: Simplification Provisions Relating to Excise
Taxes, Tax-Exempt Bonds, and Other Matters
Subtitle A: Excise Tax Simplification
Subtitle B: Tax-Exempt Bond Provisions
Subtitle C: Tax Court Procedures
Subtitle D: Other Provisions
Title XIII: Pension Simplification
Title XIV: Technical Amendments Related to Small Business
Job Protection Act of 1996 and Other Legislation
Revenue Reconciliation Act of 1997 - Title I: Child Tax Credit and Other Family Tax Relief - Amends the Internal Revenue Code (IRC) to allow a tax credit of up to $500 dollars for each qualifying child of a taxpayer.
(Sec. 102) Increases the exemption amounts applicable to the alternative minimum tax for individuals.
Title II: Education Incentives - Subtitle A: Tax Benefits Relating to Education Expenses - Permits an individual a tax credit of up to $1,500 per year for the first two years of qualified post- secondary education.
(Sec. 202) Permits a deduction of up to $2,500 for interest paid during the first five years interest is due on a qualified higher education loan. Makes a dependent ineligible for the deduction if a personal exemption is taken with respect to such dependent.
(Sec. 203) Waives the ten percent early withdrawal tax due on IRA distributions if the withdrawal is used to pay higher education expenses.
Subtitle B: Expanded Education Investment Savings Opportunities - Excludes from gross income education distributions for qualified higher education expenses from State tuition programs.
(Sec. 212) Permits an eligible institution to maintain a qualified State tuition program. Includes room and board in the definition of qualified higher education expenses. Makes additional modifications to the qualified State tuition program including, among other things, provisions concerning: (1) the definition of a family member; (2) estate and gift tax treatment; and (3) excess contributions.
(Sec. 213) Exempts an education individual retirement account (defined as a trust created exclusively to pay qualified higher education expenses) from taxation, subject to an exception relating to the imposition of tax on unrelated business income of charitable organizations.
Subtitle C: Other Education Initiatives - Permanently extends the exclusion for employer-provided educational expenses. Repeals, with respect to such expenses, the limitation on graduate education.
(Sec. 222) Repeals the $150 million limit applicable to qualified 501(c)(3) (charitable organization) bonds.
(Sec. 223) Increases the arbitrage rebate exception for public school capital expenditure bonds.
(Sec. 224) Makes the two-percent floor on miscellaneous itemized deductions inapplicable to certain elementary and secondary teacher education expenses.
Title III: Savings and Investment Incentives - Subtitle A: Retirement Savings - Increases the income limits for active participants with respect to the IRA (Individual Retirement Account) deduction. Removes limitations on a spouse's participation.
(Sec. 302) Permits individuals to establish IRA Plus accounts which shall be treated similarly to IRAs. Prohibits deductions for contributions to such accounts. Sets forth distribution rules (including excluding qualified distributions from gross income).
(Sec. 303) Permits distributions without penalty for: (1) first home purchases; and (2) certain unemployed individuals.
(Sec. 304) Permits the investment of IRA assets in certain bullion.
Subtitle B: Capital Gains - Reduces the maximum capital gains rate for individuals from 28 to 20 percent.
(Sec. 312) Makes the 50 percent exclusion for gain from the sale of small business stock applicable to corporations as well as to individuals.
(Sec. 313) Permits the nontaxable rollover of the gain from the sale of small business stock to another qualified small business stock, if done within 60 days of the sale date.
(Sec. 314) Revises provisions concerning the one-time exclusion for the gain from the sale of a principal residence to, among other things: (1) increase the exclusion to $250,000 ($500,000 for certain joint returns); (2) allow the exclusion once every two years; and (3) remove the age limitation.
Title IV: Estate, Gift, and Generation-Skipping Tax Provisions - Increases, incrementally, the unified estate and gift tax credit to $1 million by the year 2006.
(Sec. 402) Provides, in general, for the exclusion from the estate tax of the first $1 million of the value of a qualified family owned business.
(Sec. 403) Excludes from the estate tax a portion of land subject to a qualified conservation easement.
(Sec. 404) Extends from 10 to 20 the number of installments permitted to an estate for making payments of the estate tax in an estate consisting largely of an interest in a closely held business. Revises provisions concerning the payment of interest on such tax.
(Sec. 406) Permits a lineal descendent to rent specially-valued farm or trade property without imposition of the additional estate tax.
(Sec. 407) Extends the predeceased parent exception to transfers to collateral heirs, as specified.
Title V: Extensions - Extends: (1) the research tax credit until December 31, 1999; (2) the special rule for contributions of stock (for which market quotations are readily available) to private foundations until December 31, 1999; (3) the work opportunity tax credit for 22 months; and (4) permanently, the orphan drug credit.
Title VI: Incentives for the Revitalization of the District of Columbia - Permits, in the District of Columbia, the following tax incentives if, prior to January 1, 1998, a Federal law is enacted creating an entity known as the Economic Development Corporation as part of the District of Columbia government: (1) a first-time homebuyers tax credit of up to $5,000; (2) the allocation of up to $75 million in tax credits for certain investments in and loans to businesses; and (3) a zero-percent capital gains rate for capital gains resulting from the sale of qualified assets held over five years.
Title VII: Miscellaneous Provisions - Subtitle A: Provisions Relating to Excise Taxes - Repeals the diesel fuel tax applicable to diesel fuel used in recreational boats.
(Sec. 702) Establishes the Intercity Passenger Rail Fund to finance qualified expenses of: (1) the National Railroad Passenger Corporation; and (2) each non-Amtrak State.
(Sec. 703) Provides for the tax treatment of certain hard cider derived from apples.
(Sec. 704) Provides for the transfer of a portion of the 4.3 cents per gallon General Fund motor fuel excise tax to the Highway Trust Fund.
(Sec. 705) Revises the rate of tax on certain special motor fuels (benzol, naphtha, and etc).
(Sec. 706) Directs the Secretary of the Treasury to conduct a study concerning the options for changing the collection point of the distilled spirits excise tax.
(Sec. 707) Extends the alcohol used as fuel credit until December 31, 2007, and the related excise tax exemption until September 30, 2007.
(Sec. 708) Adds provisions which regulate the use of semi-generic designations on wine labels.
Subtitle B: Provisions Relating to Pensions and Fringe Benefits - Eliminates the percentage (100 percent of compensation or a specified dollar amount) limitation for a defined benefit compensation plan thereby subjecting such plans only to the dollar (indexed for inflation) limitation.
(Sec. 712) Modifies rules concerning the partial termination of a pension plan.
(Sec. 713) Increases the full funding limit for defined benefit pension plans.
(Sec. 714) Requires written spousal consent for distributions from qualified cash or deferred arrangement plans.
(Sec. 715) Excludes contributions from a self-employed minister to a church plan on the same basis as if such minister were a church employee.
(Sec. 716) Repeals application of the unrelated business income tax for an employee stock ownership plan that is an S corporation shareholder.
Subtitle C: Revisions Relating to Disasters - Provides special treatment for income from the sale of livestock sold or involuntarily converted because of drought or other weather related conditions.
(Sec. 722) Disregards gain or loss from the sale of livestock for purposes of the earned income credit.
(Sec. 723) Waives, with respect to qualified mortgage bond financing, specified requirements for residences located in disaster areas.
Subtitle D: Provisions Relating to Small Businesses - Waives any penalty through July 1, 1998, for a taxpayer first required to use the electronic fund transfer system after July 1, 1997, and who does not use such system.
(Sec. 732) Permits the use of the installment method of accounting for purposes of computing alternative minimum taxable income.
Subtitle E: Foreign Provisions - Provides that computer software is not excluded from the definition of export property under the foreign sales corporation provisions.
(Sec. 742) Directs the Secretary to prescribe regulations which determine the extent to which a taxpayer will be denied benefits under an income tax treaty with respect to income from a hybrid entity.
(Sec. 743) Excepts certain cash, securities, and obligations from the definition of U.S. property for purposes the controlled foreign corporation (CFC) rules.
(Sec. 744) Excepts for purposes of CFC rules, for the 1998 taxable year, certain income derived by a foreign personal holding company in the active conduct of an insurance, banking, financing, or similar business.
(Sec. 745) Provides for the treatment of the income nonresident aliens earned as a crew member of a foreign vessel temporarily in the United States, including treating such income as foreign source income.
(Sec. 751) Provides generally that certain U.S. shareholders of controlled foreign corporations will not be subject to passive foreign investment company inclusion.
(Sec. 752) Allows, as specified, a mark-to-market election by a shareholder of a passive foreign investment company.
Subtitle F: Other Provisions - Provides for the tax-exempt status of any organization created by State law which is organized and operated exclusively to provide workmen's compensation.
(Sec. 762) Excepts an existing partnership which elects to be subjected to a specified additional tax from the general rule that a publicly traded partnership be treated as a corporation.
(Sec. 763) Excludes certain sponsorship payments received by a tax-exempt organization from unrelated taxable income.
(Sec. 764) Permits timeshare associations to be taxed under provisions provided for the taxation of other homeowners associations.
(Sec. 765) Increases the business meals deduction for certain individuals: (1) subject to the hours of service limitations of the Department of Transportation; and (2) working at specified northern food processing facilities.
(Sec. 766) Permits a State or local government employee to deduct expenses incurred in connection with such employment.
(Sec. 767) Increases, for purposes of computing the charitable deduction for the use of a passenger automobile, the standard mileage rate.
(Sec. 768) Permits: (1) a taxpayer to treat any qualified environmental remediation expenditure incurred by the taxpayer as an expense which is not chargeable to capital account; and (2) any expenditure so treated to be allowed as a deduction.
(Sec. 769) Directs the Secretary of the Treasury to provide for a demonstration project assessing the feasibility and desirability of expanding combined Federal and State tax reporting.
(Sec. 770) Increases the maximum capital expenditure limit for qualified small issue bonds.
(Sec. 771) Extends, for two years, the credit for electricity produced from wind and closed-loop biomass.
(Sec. 772) Makes the 100 percent net income limitation applicable to the oil and gas depletion deduction inapplicable for any year in which the annual average wellhead price per barrel of crude oil is less than $14 per barrel.
(Sec. 773) Permits cooperative hospital service organizations to purchase patron accounts receivable on a recourse basis and remain tax-exempt.
(Sec. 774) Exempts Federal Home Loan Bank Board bonds from the general rule that interest on Federally guaranteed bonds is not tax- exempt.
(Sec. 775) Sets forth rules concerning the: (1) period for the deduction for traveling expenses while working away from home, including special rules for construction workers; (2) charitable contribution deduction for certain expenses incurred in support of Native Alaskan subsistence whaling; (3) eligibility criteria for the designation of future enterprise zones in Alaska or Hawaii; (4) de minimis fringe benefit rules concerning no-charge employee meals; and (5) standard for determining the employment tax status of securities brokers.
Title VIII: Revenues - Subtitle A: Financial Products - Provides that if there is a constructive sale of an appreciated financial position: (1) a taxpayer shall recognize gain as if such position were sold for its fair market value on the date of the constructive sale; and (2) for purposes of the treatment of gains and losses for periods after the constructive sale, proper adjustment shall be made in the amount of any gain or loss subsequently realized with respect to such position for any gain taken into account by reason of the above and the holding period of such position shall be determined as if such position were originally acquired on the date of such constructive sale.
(Sec. 802) Modifies the definition of an investment company for purposes of determining whether a gain or loss is recognized if property is transferred to a corporation by one or more persons solely in exchange for stock and immediately such person or persons controls such corporation.
(Sec. 803) Extends to all property (currently, only personal property) specified provisions concerning gains or losses from certain cancellations or other terminations of rights or obligations which are capital assets.
Subtitle B: Corporate Organizations and Reorganizations - Revises provisions concerning a corporate shareholder's basis in stock being reduced by the nontaxed portion of extraordinary dividends received to provide that if the nontaxed portion of such dividends exceeds such basis, such excess shall be treated as gain for the sale or exchange of such stock for the taxable year in which the extraordinary dividend is received.
(Sec. 812) Revises rules for: (1) distributions of stock and securities of a controlled corporation; (2) redemptions of stock through the use of related corporations; and (3) the holding period applicable to the dividends received deduction.
Subtitle C: Other Corporate Provisions - Revises provisions concerning the registration of tax shelters. Includes as a tax shelter any plan: (1) with a significant purpose being the avoidance of Federal income tax for a corporation; (2) offered to any potential participant under conditions of confidentiality; and (3) for which promoters receive in excess of $100,000. Requires the registration of a corporate tax shelter promoter.
(Sec. 822) Treats, subject to exceptions, certain preferred stock as boot.
Subtitle D: Administrative Provisions - Sets forth provisions concerning: (1) the reporting of payments made by Federal agencies to corporations; (2) extending the Department of Veterans Affairs disclosure provision; (3) requiring consistent reporting of the return of a beneficiary's estate or trust return and the return of the estate or trust; and (4) a continuous levy, levy exemptions, and levy disclosure.
Subtitle E: Excise Tax Provisions - Extends, for ten years, the Airport and Airway Trust Fund taxes.
(Sec. 842) Restores, for ten years, the Leaking Underground Storage Tank Trust Fund excise tax.
(Sec. 843) Applies the three percent communications tax to long- distance prepaid telephone cards.
(Sec. 844) Replaces the varied excise tax rates on vaccines with a single tax rate of 84 cents per dose.
(Sec. 845) Permits a credit against the manufacturers' excise tax paid with respect to the tire tax on certain truck tires.
(Sec. 846) Increases the excise tax rate on all tobacco products.
Subtitle F: Provisions Relating to Tax-Exempt Entities - Modifies provisions concerning interest, annuities, royalties, and rents received by a tax-exempt organization from a subsidiary and the unrelated business income tax to define the term "control" of a subsidiary to mean ownership of more than 50 percent.
(Sec. 852) Provides, as a general rule, that in the case of a sale or exchange between a tax-exempt entity and a related person, the basis of the related person in the property acquired shall not exceed the adjusted basis of such property in the hands of the tax-exempt entity, increased by the gain recognized to the tax-exempt entity on the transfer which is subject to the unrelated business income tax.
(Sec. 853) Provides for the tax treatment of Mutual of America.
Subtitle G: Foreign Provisions - Treats as foreign personal holding company income: (1) income from notional principal contracts; and (2) payments in lieu of dividends. Provides, for dealers, for an exception from certain foreign personal holding company income provisions.
(Sec. 862) Provides, for purposes of like-kind exchanges, that personal property used predominantly within the United States and personal property used predominantly outside the United States are not property of a like kind.
(Sec. 863) Establishes minimum holding periods for stock dividends in order to qualify for foreign tax credits.
(Sec. 864) Treats as U.S. source income income from the sale of property by a U.S. resident to another U.S. resident for use, consumption, or disposition in the United States, if the sale is not attributable to an office maintained by the seller outside the United States.
(Sec. 865) Prohibits the reduction of interest on underpayments by foreign tax credit carrybacks.
(Sec. 866) Sets forth provisions concerning: (1) the period of limitations on a claim for a credit or refund attributable to a foreign tax carryforward; (2) the reduction of the foreign tax credit carryback period and the increase of the foreign tax credit carryforward period; and (3) the repeal of the exception concerning the use of foreign tax credits for purposes of the alternative minimum tax.
Subtitle H: Other Revenue Provisions - Prohibits a family farm establishing a suspense account when required to use the accrual method of accounting.
(Sec. 872) Limits the net operating loss carryback period to two years and extends the net operating loss carryforward period to 20 years.
(Sec. 873) Prohibits, with respect to life insurance, a deduction for that portion of the taxpayer's interest expense which is allocable to unborrowed policy cash values, subject to exceptions.
(Sec. 874) Modifies basis allocation rules upon distribution of partnership property.
(Sec. 875) Eliminates the requirement that inventory must have substantially appreciated in value to cause ordinary income with respect to rules concerning sales and exchanges of partnership interests.
(Sec. 876) Permits the income forecast method of depreciation to be used only for film and video tape, copyrights, books, patents, and other property specified in regulations.
(Sec. 877) Sets forth provisions which: (1) require that involuntarily converted property be replaced with property acquired from an unrelated person in certain cases; (2) repeal the exception permitting the use of the installment method of accounting for certain sales by manufacturers to dealers; (3) increase the limit on involuntary pension cash-outs; (4) include a parking benefit in income only if an employee chooses a cash benefit instead of parking; (5) extend the current 6.2 unemployment tax rate through calendar year 2007; (6) repeal the excess distribution and excess retirement accumulation tax; (7) revise the treatment of charitable remainder trusts with a greater than 50 percent annual payout; (8) increase the tax on prohibited pension transactions by five percent; and (9) revise the basis recovery rules for annuities received over more than one life.
Title IX: Foreign-Related Simplification Provisions - Subtitle A: General Provisions - Exempts from the foreign tax credit limitation certain individuals whose entire gross income from sources outside the United States consists of qualified passive income and whose amount of creditable foreign taxes paid does not exceed $300.
(Sec. 902) Revises the method of translating foreign income taxes into dollars by providing, in general, for the use of the average exchange rate for the taxable year.
Subtitle B: Treatment of Controlled Foreign Corporations - Provides, with respect to controlled a foreign corporation, for: (1) the treatment of gain on certain stock sales by controlled foreign corporations as dividends; (2) regulations concerning basis adjustments of stock in controlled foreign corporation; and (3) extending the application of the indirect foreign tax credit to taxes paid by certain lower-tier controlled foreign corporations.
Subtitle C: Repeal of Excise Tax on Transfers to Foreign Entities - Repeals Chapter 5 (Tax on Transfers to Avoid Income Tax) of the IRC. Provides for the recognition of gain on certain transfers to foreign trusts and estates.
Subtitle D: Information Reporting - Revises provisions concerning: (1) the return requirement for foreign partnership income; (2) information reporting for controlled foreign corporations; (3) returns as to interests in foreign partnerships; (4) notice of certain transfers to foreign corporations; (5) the statute of limitations applicable in the case of failure to notify the Secretary of certain transactions; and (6) increasing the filing threshold for returns as to organization or reorganization of foreign corporations and acquisitions of stock in such corporations.
Subtitle E: Determination of Foreign or Domestic Status of Partnerships - Revises the definition of "domestic" when applied to a corporation or partnership to permit the Secretary, by regulation, to provide an exception to such definition for a partnership.
Subtitle F: Other Simplification - Amends the Small Business Job Protection Act of 1996 to permit a trust in existence on August 20, 1996, and which was treated as a U.S. person on the day before enactment of such Act to elect to continue to be treated as a U.S. person notwithstanding the IRC definition of a U.S. person.
(Sec. 952) Eliminates the stock and securities safe harbor requirement that an entity's principal office be outside the United States.
Title X: Simplification Provisions Relating to Individuals and Businesses - Subtitle A: Provisions Relating to Individuals - Increases the: (1) standard deduction for a taxpayer with respect to whom a dependency exemption is allowed on another taxpayer's return; (2) the alternative minimum tax exemption for minors under the age of 14; and (3) estimated de minimis tax threshold.
(Sec. 1003) Revises the treatment of: (1) reimbursed expenses of rural mail carriers; and (2) traveling expenses of certain Federal employees engaged in criminal investigations.
Subtitle B: Provisions Relating to Businesses Generally - Permits a taxpayer to elect not to apply the look-back method for a long-term contract for de minimis (below 10 percent of taxable income or loss) amounts.
(Sec. 1013) States that a method of determining inventories shall not be deemed not to clearly reflect income solely because it utilizes estimates of inventory shrinkage that are confirmed by a physical count only after the last day of the taxable year, subject to conditions.
(Sec. 1014) Excludes from the gross income of a lessee any amount received in cash by a lessee from a lessor: (1) under a short-term lease of retail space; and (2) for the purpose of such lessee's constructing or improving long-term real property for use in the lessee's business.
Subtitle C: Simplification Relating to Electing Large Partnerships - Establishes special rules for large partnerships (100 or more partners) which: (1) take into account separately a partner's distributive share of specified items for purposes of determining the income tax of a partner; (2) compute the taxable income of a large partnership in the same manner as in the case of an individual, subject to stated exceptions; and (3) provide for the treatment of partnerships holding oil and gas properties.
(Sec. 1022) Creates an audit system for electing large partnerships which provides as a general rule that a partner of any electing large partnership shall, on the partner's return, treat each partnership item attributable to such partnership in a manner which is consistent with the treatment of such partnership item on the partnership return. Sets forth provisions concerning partnership adjustments which generally will flow through to partners for the year in which the adjustment takes effect.
(Sec. 1031) Authorizes the Secretary, with respect to an oversheltered return (a return which shows no taxable income and shows a net loss from partnership items), to send a notice of adjustment in specified situations.
(Sec. 1032) Provides, on the basis of a decision of the Secretary, that the partnership return shall determine the audit procedures to be followed.
(Sec. 1033) Sets forth provisions, with respect to partnerships, concerning: (1) the statute of limitations and untimely petition filing; (2) the exception for small partnerships (under the definition of partnership); (3) the period for assessing tax where a partner and the Secretary enter a settlement agreement but other partnership items remain in dispute; (4) the time for filing a request for administrative adjustment; (5) the innocent spouse defense in court proceedings; (6) partnership level penalties; (7) court jurisdiction; (8) premature petitions; (9) bonds in appeals from Tax Court decisions; and (10) closing the taxable partnership year with respect to a deceased partner.
Subtitle D: Provisions Relating to Real Estate Investment Trusts - Modifies provisions relating to qualification as, and the taxation of, a real estate investment trust, including: (1) rules relating to ownership determination; (2) tenant service income and tenant ownership; (3) repeal of the 30 percent gross income requirement; (4) earnings and profit rules; (5) income from hedges; (6) excess noncash income; and (7) shared appreciation mortgages.
Subtitle E: Provisions Relating to Regulated Investment Companies - Repeals, with respect to regulated investment companies, the 30 percent test.
Subtitle F: Taxpayer Protections - Provides for the waiver of certain penalties if a failure is shown to be due to reasonable cause and not willful neglect.
(Sec. 1082) Permits a taxpayer who was due a refund, but who initially failed to file a return and who received a deficiency notice during the third year after the return's due date, to obtain a refund.
(Sec. 1083) Repeals the requirement of the Secretary to disclose, upon request, if a prospective juror has been audited.
(Sec. 1084) Specifies, for purposes of the statute of limitations, that the term "return" means the taxpayer's return and not the return of any person form whom the taxpayer has received an item of income, gain, loss, deduction, or credit.
(Sec. 1085) Establishes penalties for Federal employees and others who, without proper authorization, willfully inspect any return or information.
Title XI: Simplification Provisions Relating to Estate and Gift Taxes - Provides that, under specified conditions, gifts to charities are not subject to gift tax filing requirements.
(Sec. 1102) Waives the right of recovery with respect to qualified terminable interest property only to the extent that the language in the decedent's will specifically indicates.
(Sec. 1103) Treats any trust created before enactment of the Revenue Reconciliation Act of 1990 as satisfying the withholding requirement if it requires all trustees to be U.S. citizens or corporations.
(Sec. 1104) Sets forth provisions concerning, among other things: (1) the treatment for estate tax purposes of short-term obligations held by nonresident aliens; (2) distributions during the first 65 days of the taxable year of the estate; (3) application of the separate share rules to estates; (4) treatment of an estate and a beneficiary as related for purposes of disallowance of losses; (5) treatment of a qualified funeral trust; (6) adjustments for certain gifts within three years of a decedent's death; and (7) the authority to waive the requirement that a qualified domestic trust have a U.S. trustee.
Title XII: Simplification Provisions Relating to Excise Taxes, Tax-Exempt Bonds, and Other Matters - Subtitle A: Excise Tax Simplification - Increases the de minimis limit for aftermarket alterations for heavy trucks and luxury cars.
(Sec. 1211) Makes refunds available for imported bottled distilled spirits returned to distilled spirits plants.
(Sec. 1212) Permits records of exportation to be maintained by the exporter for purposes of cancelling or crediting bonds furnished when distilled spirits are removed from bonded premises.
(Sec. 1213) Permits distilled spirits plants to maintain records of their activities at locations other than the premises where the operations covered by the records are performed.
(Sec. 1214) Allows beer to be transferred without payment of tax to a distilled spirits plant to be used in the production of distilled spirits regardless of whether the brewery is contiguous to the distilled spirits plant.
(Sec. 1215) Repeals the requirement that wholesale liquor dealers post a sign outside their place of business indicating that they are wholesale liquor dealers.
(Sec. 1216) Repeals the requirement that wine returned to bonded premises be unmerchantable in order for the tax to be refunded to the proprietor of the bonded wine cellar to which the wine is delivered.
(Sec. 1217) Allows the use of ameliorating material (not in excess of 60 percent) in certain wines made exclusively from a fruit or berry with a natural fixed acid of 20 parts per thousand or more.
(Sec. 1218) Allows domestically-produced beer to be withdrawn from the place of production without payment of tax for the official or family use of representatives of foreign governments or public international organizations.
(Sec. 1219) Allows beer to be removed from a brewery without payment of tax for purposes of destruction.
(Sec. 1220) Permits a domestic exporter to recover the tax paid on the exported beer with specified proof.
(Sec. 1221) Provides for imported beer to be withdrawn from customs custody for transfer to a brewery without payment of tax.
(Sec. 1231) Expands the authority of the Secretary to waive the excise tax registration requirement.
(Sec. 1232) Repeals certain provisions concerning the: (1) tax on heavy trucks and trailers sold at retail; (2) tax on the removal of hard minerals from the deep seabed; and (3) excise tax on the sale or use by a manufacturer or importer of certain ozone depleting chemicals.
(Sec. 1233) Revises provisions concerning: (1) the excise taxes on arrows; (2) the excise tax on skydiving flights; and (3) refunding certain aviation fuel taxes paid by a registered producer.
Subtitle B: Tax-Exempt Bond Provisions - Repeals the $100,000 limitation on unspent proceeds under the one-year exception from arbitrage rebate requirements.
(Sec. 1242) Exempts earnings on bond proceeds invested in bona fide debt service funds from the arbitrage rebate requirements and the penalty requirement of the 24-month exception, if the spending requirements of that exception are otherwise satisfied.
(Sec. 1243) Repeals: (1) the debt service-based limitation on investment in certain nonpurpose investments; and (2) certain expired provisions.
Subtitle C: Tax Court Procedures - Provides that an order to refund an overpayment is appealable in the same manner as a decision of the Tax Court. Declares that the Tax Court shall not have jurisdiction over the validity or merits of the credits or offsets that reduce or eliminate the refund to which the taxpayer was otherwise entitled.
(Sec. 1252) Provides for a taxpayer to file a motion, rather than a petition, to seek, in the Tax Court, a redemption of interest.
(Sec. 1253) Applies to estates and trusts the net worth limitations currently applicable to individuals.
(Sec. 1254) Permits the Tax Court to have jurisdiction over certain employment status disputes.
Subtitle D: Other Provisions - Extends the due date of the first quarter estimated tax payment of a private foundation.
(Sec. 1262) Permits any Commonwealth to enter into an agreement with the Secretary providing for income tax withholding.
(Sec. 1263) Revises provisions concerning the notice to a large corporation of a tax underpayment.
Title XIII: Pension Simplification - Treats matching contributions for self-employed individuals the same as matching contributions for employees.
(Sec. 1302) Permits an employer to establish a system under which eligible employees, through employer payroll deductions, may make contributions to an individual retirement plan.
(Sec. 1303) Sets forth provisions concerning a plan accepting a rollover contribution.
(Sec. 1304) Amends the Employee Retirement Income Security Act of 1974 to: (1) permit a participant's benefit in a plan to be reduced in order to satisfy the participant's liability if an order or requirement to pay arises from a civil or criminal judgment in connection with the plan; and (2) eliminate certain filing requirements.
(Sec. 1306) Redefines includible compensation to: (1) include any elective deferral; and (2) certain amounts contributed by the employer at the employee's election which are not includible in the employee's gross income.
(Sec. 1307) Provides for the issuance of guidelines concerning the use of new technology for plan purposes.
(Sec. 1308) Exempts governmental plans from nondiscrimination and minimum participation rules.
(Sec. 1309) Sets forth provisions concerning: (1) rules relating to employee stock ownership plans of S corporations; (2) the ten percent tax on nondeductible contributions; and (3) minimum funding requirements for certain plans.
Title XIV: Technical Amendments Related to Small Business Job Protection Act of 1996 and Other Legislation - Sets forth, with respect to sections of the Small Business Job Protection Act of 1996 which amend the IRC, provisions concerning, among other things: (1) informational returns for those engaged in selling fish; (2) the definition of an electing small business trust; (3) the treatment of a wholly owned S corporation subsidiary; (4) the definition of unrelated trade or business for certain hospitals; (5) SIMPLE retirement plans; (6) the treatment of an employee participating in an Indian tribal government annuity; (7) definitions concerning financial asset securitization trusts; (8) definitions concerning State tuition plans; and (9) the year an adoption credit is allowed.
(Sec. 1402) Sets forth, with respect to sections of the Health Insurance Portability and Accountability Act of 1996 which amend the IRC, provisions concerning, among other things: (1) the tax on nonmedical withdrawals from a medical savings account; (2) the definition of a chronically ill individual for purposes of a long-term care insurance contract; (3) deductions for the health insurance costs of self-employed individuals; (4) reporting requirements concerning long-term care contracts; (5) consumer protection provisions for long- term care insurance contracts; and (6) rules concerning expatriation to avoid tax.
(Sec. 1403) Sets forth, with respect to sections of the Taxpayer Bill of Rights Act 2 which amend the IRC, provisions concerning, among other things: (1) abatement of first-tier taxes in certain cases; and (2) returns of exempt organizations.
(Sec. 1404) Sets forth other provisions which amend the IRC which are related to the: (1) Energy Policy Act of 1992; (2) Uruguay Round Agreements Act; and (3) Tax Reform Act of 1984.