[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 3019 Introduced in Senate (IS)]







108th CONGRESS
  2d Session
                                S. 3019

     To amend the Internal Revenue Code of 1986 to make technical 
                  corrections, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 19, 2004

  Mr. Grassley (for himself and Mr. Baucus) 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 make technical 
                  corrections, 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 ``Tax Technical Corrections Act of 
2004''.

SEC. 2. TECHNICAL CORRECTIONS.

    (a) Amendments Related to the American Jobs Creation Act of 2004.--
            (1) Amendments related to section 102 of the act.--
                    (A) Paragraph (2) of section 199(c) of the Internal 
                Revenue Code of 1986 is amended to read as follows:
            ``(2) Allocation method.--The Secretary shall prescribe 
        rules for the proper allocation of items described in paragraph 
        (1) for purposes of determining qualified production activities 
        income.''.
                    (B) Clause (i) of section 199(d)(4)(B) of such Code 
                is amended--
                            (i) by striking ``50 percent'' and 
                        inserting ``more than 50 percent'', and
                            (ii) by striking ``80 percent'' and 
                        inserting ``at least 80 percent''.
            (2) Amendment related to section 231 of the act.--
        Subparagraph (C) of section 1361(c)(1) of such Code is amended 
        to read as follows:
                    ``(C) Effect of adoption, etc.--For purposes of 
                this paragraph, any legally adopted child of an 
                individual, any child who is lawfully placed with an 
                individual for legal adoption by the individual, and 
                any eligible foster child of an individual (within the 
                meaning of section 152(f)(1)(C)), shall be treated as a 
                child of such individual by blood.''.
            (3) Amendment related to section 248 of the act.--
        Subsection (c) of section 1356 of such Code is amended--
                    (A) by striking paragraph (3), and
                    (B) by adding at the end of paragraph (2) the 
                following new flush sentence:
        ``Such term shall not include any core qualifying 
        activities.''.
            (4) Amendment related to section 314 of the act.--Paragraph 
        (2) of section 55(c) of such Code is amended by striking 
        ``regular tax'' and inserting ``regular tax liability''.
            (5) Amendment related to section 415 of the act.--
        Subparagraph (D) of section 904(d)(2) of such Code is amended 
        by inserting ``as in effect before its repeal'' after ``section 
        954(f)''.
            (6) Amendments related to section 418 of the act.--
                    (A) The second sentence of section 897(h)(1) of 
                such Code is amended by striking ``any distribution'' 
                and all that follows through ``any class of stock'' and 
                inserting ``any distribution by a real estate 
                investment trust with respect to any class of stock''.
                    (B) Subsection (c) of section 418 of the American 
                Jobs Creation Act of 2004 is amended by striking 
                ``taxable years beginning after the date of the 
                enactment of this Act'' and inserting ``any 
                distribution by a real estate investment trust which is 
                treated as a deduction for a taxable year of such trust 
                beginning after the date of the enactment of this 
                Act''.
            (7) Amendments related to section 422 of the act.--
                    (A) Subparagraph (A) of section 965(b)(2) of such 
                Code is amended by inserting ``cash'' before 
                ``dividends''.
                    (B) Paragraph (3) of section 965(b) of such Code is 
                amended by adding at the end the following: ``The 
                Secretary may prescribe such regulations as may be 
                necessary or appropriate to prevent the avoidance of 
                the purposes of this paragraph, including regulations 
                which provide that cash dividends shall not be taken 
                into account under subsection (a) to the extent such 
                dividends are attributable to the direct or indirect 
                transfer (including through the use of intervening 
                entities or capital contributions) of cash or other 
                property from a related person (as so defined) to a 
                controlled foreign corporation.''.
                    (C) Paragraph (1) of section 965(c) of such Code is 
                amended to read as follows:
            ``(1) Applicable financial statement.--The term `applicable 
        financial statement' means--
                    ``(A) with respect to a United States shareholder 
                which is required to file a financial statement with 
                the Securities and Exchange Commission (or which is 
                included in such a statement so filed by another 
                person), the most recent audited annual financial 
                statement (including the notes which form an integral 
                part of such statement) of such shareholder (or which 
includes such shareholder)--
                            ``(i) which was so filed on or before June 
                        30, 2003, and
                            ``(ii) which was certified on or before 
                        June 30, 2003, as being prepared in accordance 
                        with generally accepted accounting principles, 
                        and
                    ``(B) with respect to any other United States 
                shareholder, the most recent audited financial 
                statement (including the notes which form an integral 
                part of such statement) of such shareholder (or which 
                includes such shareholder)--
                            ``(i) which was certified on or before June 
                        30, 2003, as being prepared in accordance with 
                        generally accepted accounting principles, and
                            ``(ii) which is used for the purposes of a 
                        statement or report--
                                    ``(I) to creditors,
                                    ``(II) to shareholders, or
                                    ``(III) for any other substantial 
                                nontax purpose.''.
                    (D) Paragraph (2) of section 965(d) of such Code is 
                amended by striking ``properly allocated and 
                apportioned'' and inserting ``directly allocable''.
                    (E) Subsection (d) of section 965 of such Code is 
                amended by adding at the end the following new 
                paragraph:
            ``(4) Coordination with section 78.--Section 78 shall not 
        apply to any tax which is not allowable as a credit under 
        section 901 by reason of this subsection.''.
                    (F) The last sentence of section 965(e)(1) of such 
                Code is amended by inserting ``which are imposed by 
                foreign countries and possessions of the United States 
                and are'' after ``taxes''.
            (8) Amendments related to section 501 of the act.--
                    (A) Subparagraph (A) of section 164(b)(5) of such 
                Code is amended to read as follows:
                    ``(A) Election to deduct state and local sales 
                taxes in lieu of state and local income taxes.--At the 
                election of the taxpayer for the taxable year, 
                subsection (a) shall be applied--
                            ``(i) without regard to the reference to 
                        State and local income taxes, and
                            ``(ii) as if State and local general sales 
                        taxes were referred to in a paragraph 
                        thereof.''.
                    (B) Clause (ii) of section 56(b)(1)(A) of such Code 
                is amended by inserting ``or clause (ii) of section 
                164(b)(5)(A)'' before the period at the end.
            (9) Amendment related to section 835 of the act.--The last 
        sentence of paragraph (3) of section 860G(a) of such Code is 
        amended by striking ``treated as secured'' and inserting 
        ``treated as principally secured''.
            (10) Amendments related to section 885 of the act.--
                    (A) Paragraph (2) of section 26(b) of such Code is 
                amended by striking ``and'' at the end of subparagraph 
                (R), by striking the period at the end of subparagraph 
                (S) and inserting ``, and'', and by adding at the end 
                the following new subparagraph:
                    ``(T) subsections (a)(1)(B)(i) and (b)(4)(A) of 
                section 409A (relating to interest and additional tax 
                with respect to certain deferred compensation).''.
                    (B) Clause (ii) of section 409A(a)(4)(C) of such 
                Code is amended by striking ``first''.
                    (C)(i) Notwithstanding section 885(d)(1) of the 
                American Jobs Creation Act of 2004, subsection (b) of 
                section 409A of such Code shall take effect on January 
                1, 2005.
                    (ii) Not later than 90 days after the date of the 
                enactment of this Act, the Secretary of the Treasury 
                shall issue guidance under which a nonqualified 
                deferred compensation plan which is in violation of the 
                requirements of section 409A(b) of such Code shall be 
                treated as not having violated such requirements if 
                such plan comes into conformance with such requirements 
                during such limited period as the Secretary may specify 
                in such guidance.
                    (D) Subsection (f) of section 885 of the American 
                Jobs Creation Act of 2004 is amended by striking 
                ``December 31, 2004'' the first place it appears and 
                inserting ``January 1, 2005''.
            (11) Effective date.--The amendments made by this 
        subsection shall take effect as if included in the provisions 
        of the American Jobs Creation Act of 2004 to which they relate.
    (b) Amendments Related to the Working Families Tax Relief Act of 
2004.--
            (1) Amendment related to section 203 of the act.--
        Subparagraph (B) of section 21(b)(1) of the Internal Revenue 
        Code of 1986 is amended by inserting ``(as defined in section 
        152, determined without regard to subsections (b)(1), (b)(2), 
        and (d)(1)(B))'' after ``dependent of the taxpayer''.
            (2) Amendment related to section 207 of the act.--
        Subparagraph (A) of section 223(d)(2) of such Code is amended 
        by inserting ``, determined without regard to subsections 
        (b)(1), (b)(2), and (d)(1)(B) thereof'' after ``section 152''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the provisions of the 
        Working Families Tax Relief Act of 2004 to which they relate.
    (c) Amendment Related to the Jobs and Growth Tax Relief 
Reconciliation Act of 2003.--
            (1) Amendment related to section 201 of the act.--
        Subparagraph (D) of section 1400L(b)(2) of the Internal Revenue 
        Code of 1986 is amended by striking ``September 11, 2004'' and 
        inserting ``January 1, 2005''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in section 201 of the Jobs and 
        Growth Tax Relief and Reconciliation Act of 2003.
    (d) Amendments Related to the Trade Act of 2002.--
            (1) Paragraph (4) of section 6103(p) of the Internal 
        Revenue Code of 1986 is amended by striking ``(l)(16), (17), 
        (19), or (20)'' each place it appears and inserting ``(l)(16), 
        (18), (19), or (20)''.
            (2) The Internal Revenue Code of 1986 shall be applied and 
        administered as if the amendments made by section 408(a)(24) of 
the Working Families Tax Relief Act of 2004 had never been enacted.
    (e) Amendment Related to the Victims of Terrorism Tax Relief Act of 
2001.--
            (1) Amendment related to section 201 of the act.--Paragraph 
        (17) of section 6103(l) of the Internal Revenue Code of 1986 is 
        amended by striking ``subsection (f), (i)(7), or (p)'' and 
        inserting ``subsection (f), (i)(8), or (p)''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in section 201 of the Victims 
        of Terrorism Tax Relief Act of 2001.
    (f) Amendments Related to the Taxpayer Relief Act of 1997.--
            (1) Amendments related to section 1055 of the act.--
                    (A) The last sentence of section 6411(a) of the 
                Internal Revenue Code of 1986 is amended by striking 
                ``6611(f)(3)(B)'' and inserting ``6611(f)(4)(B)''.
                    (B) Paragraph (4) of section 6601(d) of such Code 
                is amended by striking ``6611(f)(3)(A)'' and inserting 
                ``6611(f)(4)(A)''.
            (2) Amendment related to section 1144 of the act.--
        Subparagraph (B) of section 6038B(a)(1) of such Code is amended 
        by inserting ``or'' at the end.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the provisions of the 
        Taxpayer Relief Act of 1997 to which they relate.
    (g) Clerical Corrections.--
            (1) Subparagraph (E) of section 26(b)(2) of the Internal 
        Revenue Code of 1986 is amended by striking ``section 
        530(d)(3)'' and inserting ``section 530(d)(4)''.
            (2)(A) Subclause (II) of section 38(c)(2)(A)(ii) of such 
        Code is amended by striking ``or the New York Liberty Zone 
        business employee credit or the specified credits'' and 
        inserting ``, the New York Liberty Zone business employee 
        credit, and the specified credits''.
            (B) Subclause (II) of section 38(c)(3)(A)(ii) of such Code 
        is amended by striking ``or the specified credits'' and 
        inserting ``and the specified credits''.
            (3) Subparagraph (A) of section 39(a)(1) of such Code is 
        amended by striking ``each of the 1 taxable years'' and by 
        inserting ``the taxable year''.
            (4)(A) Subsection (a) of section 62 of such Code is 
        amended--
                    (i) by redesignating paragraph (19) (relating to 
                costs involving discrimination suits, etc.), as added 
                by section 703 of the American Jobs Creation Act of 
                2004, as paragraph (20), and
                    (ii) by moving such paragraph after paragraph (19) 
                (relating to health savings accounts).
            (B) Subsection (e) of section 62 of such Code is amended by 
        striking ``subsection (a)(19)'' and inserting ``subsection 
        (a)(20)''.
            (5) Subsection (d) of section 121 of such Code is amended 
        by redesignating paragraph (10) (relating to property acquired 
        in like-kind exchange), as added by section 840 of the American 
        Jobs Creation Act of 2004, as paragraph (11).
            (6) Paragraph (2) of section 221(d) of such Code is amended 
        by striking ``this Act'' and inserting ``the Taxpayer Relief 
        Act of 1997''.
            (7) Subparagraph (B) of section 332(d)(1) of such Code is 
        amended by striking ``distribution to which section 301 
        applies'' and inserting ``distribution of property to which 
        section 301 applies''.
            (8) The matter following clause (iv) of section 
        415(n)(3)(C) of such Code is amended by striking ``clauses'' 
        and inserting ``clause''.
            (9) Paragraph (1) of section 512(b) of such Code is amended 
        by striking ``section 512(a)(5)'' and inserting ``subsection 
        (a)(5)''.
            (10)(A) Subsection (b) of section 512 of such Code is 
        amended--
                    (i) by redesignating paragraph (18) (relating to 
                the treatment of gain or loss on sale or exchange of 
                certain brownfield sites), as added by section 702 of 
                the American Jobs Creation Act of 2004, as paragraph 
                (19), and
                    (ii) by moving such paragraph to the end of such 
                subsection.
            (B) Subparagraph (E) of section 514(b)(1) of such Code is 
        amended by striking ``section 512(b)(18)'' and inserting 
        ``section 512(b)(19)''.
            (11)(A) Subsection (b) of section 530 of such Code is 
        amended by striking paragraph (3) and by redesignating 
        paragraphs (4) and (5) as paragraphs (3) and (4), respectively.
            (B) Clause (ii) of section 530(b)(2)(A) of such Code is 
        amended by striking ``paragraph (4)'' and inserting ``paragraph 
        (3)''.
            (12) Clause (i) of section 954(c)(1)(C) of such Code is 
        amended by striking ``paragraph (4)(A)'' and inserting 
        ``paragraph (5)(A)''.
            (13) Subparagraph (F) of section 954(c)(1) of such Code is 
        amended by striking ``Net income from notional principal 
        contracts.'' after ``Income from notional principal 
        contracts.--''.
            (14) The matter preceding clause (i) of section 
        1031(h)(2)(B) of such Code is amended by striking 
        ``subparagraph'' and inserting ``subparagraphs''.
            (15) Paragraphs (1) and (2) of section 1375(d) of such Code 
        are each amended by striking ``subchapter C'' and inserting 
        ``accumulated''.
            (16) Each of the following provisions of such Code are 
        amended by striking ``General Accounting Office'' each place it 
        appears therein and inserting ``Government Accountability 
        Office'':
                    (A) Clause (ii) of section 1400E(c)(4)(A).
                    (B) Paragraph (1) of section 6050M(b).
                    (C) Subparagraphs (A), (B)(i), and (B)(ii) of 
                section 6103(i)(8).
                    (D) Paragraphs (3)(C)(i), (4), (5), and (6)(B) of 
                section 6103(p).
                    (E) Subsection (e) of section 8021.
            (17) Section 3401 of such Code is amended by redesignating 
        subsection (h) as subsection (g).
            (18) Paragraph (2) of section 4161(a) of such Code is 
        amended to read as follows:
            ``(2) 3 percent rate of tax for electric outboard motors.--
        In the case of an electric outboard motor, paragraph (1) shall 
        be applied by substituting `3 percent' for `10 percent'.''.
            (19) Subparagraph (C) of section 4261(e)(4) of such Code is 
        amended by striking ``imposed subsection (b)'' and inserting 
        ``imposed by subsection (b)''.
            (20) Section 6427 of such Code is amended by striking 
        subsection (o) and redesignating subsection (p) as subsection 
        (o).
            (21) Subsection (a) of section 4980D of such Code is 
        amended by striking ``plans'' and inserting ``plan''.
            (22) The matter following clause (iii) of section 
        6045(e)(5)(A) of such Code is amended by striking ``for 
        `$250,000'.'' and all that follows through ``to the Treasury.'' 
        and inserting ``for `$250,000'. The Secretary may by regulation 
        increase the dollar amounts under this subparagraph if the 
        Secretary determines that such an increase will not materially 
        reduce revenues to the Treasury.''.
                                 <all>