113 HR 5636 IH: Cut REDTAPE Act U.S. House of Representatives 2014-09-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 113th CONGRESS 2d Session H. R. 5636 IN THE HOUSE OF REPRESENTATIVES September 18, 2014 Mr. Peters of California (for himself, Mrs. Napolitano, Mr. Vargas, Mr. Murphy of Florida, and Mr. Delaney) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to cut and reduce excess and duplicative tax assessments and paperwork for entrepreneurs.

1.

Short title

This Act may be cited as the Cut REDTAPE Act.

2.

Exemption of new small businesses from estimated income tax payments

(a)

Individuals

Section 6654 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: (n)

Special rule for new small businesses

(1)

In general

No addition to tax shall be imposed under subsection (a) with respect to income from a new small business. (2)

Income from a new small business

For purposes of paragraph (1), income from a new small business means, with respect to any individual, income from a trade or business if the gross receipts of such trade or business for the calendar year ending with or within the taxable year of the individual do not exceed $1,000,000. (3)

Limited application

Paragraph (1) shall not apply to income from a new small business for any taxable year beginning after 2 years after the date on which the new small business is formed. (4)

Controlled groups

(A)

In general

For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single trade or business. (B)

Inclusion of foreign corporations

For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.. (b)

Corporations

Section 6655 of the Internal Revenue Code of 1986 is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: (j)

Special rule for new small businesses

(1)

In general

No addition to tax shall be imposed under subsection (a) with respect to income from a new small business. (2)

Income from a new small business

For purposes of paragraph (1), income from a new small business means income from a trade or business if the gross receipts of such trade or business for the taxable year do not exceed $1,000,000. (3)

Limited application

Paragraph (1) shall not apply to income from a new small business for any taxable year beginning after 2 years after the date on which the new small business is incorporated. (4)

Controlled groups

(A)

In general

For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single trade or business. (B)

Inclusion of foreign corporations

For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.. (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2014.