Text: S.2771 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in Senate (11/16/2009)


111th CONGRESS
1st Session
S. 2771


To amend the Internal Revenue Code of 1986 to limit the penalty for failure to disclose reportable transactions based on resulting tax benefits, and for other purposes.


IN THE SENATE OF THE UNITED STATES

November 16, 2009

Mr. Baucus (for himself, Mr. Grassley, and Mr. Crapo) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend the Internal Revenue Code of 1986 to limit the penalty for failure to disclose reportable transactions based on resulting tax benefits, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Small Business Penalty Relief Act of 2009”.

SEC. 2. Limitation on penalty for failure to disclose reportable transactions based on resulting tax benefits.

(a) In general.—Subsection (b) of section 6707A of the Internal Revenue Code of 1986 is amended to read as follows:

“(b) Amount of penalty.—

“(1) IN GENERAL.—Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any reportable transaction shall be 75 percent of the decrease in tax shown on the return as a result of such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes).

“(2) MAXIMUM PENALTY.—The amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed—

“(A) in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person),

“(B) in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).

“(3) MINIMUM PENALTY FOR LISTED TRANSACTIONS.—In the case of a listed transaction, the amount of the penalty under subsection (a) with respect to such transaction shall not be less than $10,000 ($5,000 in the case of a natural person).”.

(b) Effective date.—The amendment made by this section shall apply to penalties assessed after December 31, 2006.

SEC. 3. Report on tax shelter penalties and certain other enforcement actions.

(a) In general.—The Commissioner of Internal Revenue, in consultation with the Secretary of the Treasury, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate an annual report on the penalties assessed by the Internal Revenue Service during the preceding year under each of the following provisions of the Internal Revenue Code of 1986:

(1) Section 6662A (relating to accuracy-related penalty on understatements with respect to reportable transactions).

(2) Section 6700(a) (relating to promoting abusive tax shelters).

(3) Section 6707 (relating to failure to furnish information regarding reportable transactions).

(4) Section 6707A (relating to failure to include reportable transaction information with return).

(5) Section 6708 (relating to failure to maintain lists of advisees with respect to reportable transactions).

(b) Additional information.—The report required under subsection (a) shall also include information on the following with respect to each year:

(1) Any action taken under section 330(b) of title 31, United States Code, with respect to any reportable transaction (as defined in section 6707A(c) of the Internal Revenue Code of 1986).

(2) Any extension of the time for assessment of tax enforced, or assessment of any amount under such an extension, under paragraph (10) of section 6501(c) of the Internal Revenue Code of 1986.

(c) Date of report.—The first report required under subsection (a) shall be submitted not later than June 1, 2010.