109 HR 4534 IH: To amend the Internal Revenue Code of 1986 to reform the charitable contribution deduction rules on contributions of certain easements on buildings in registered historic districts, and for other purposes. U.S. House of Representatives 2005-12-14 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 109th CONGRESS 1st Session H. R. 4534 IN THE HOUSE OF REPRESENTATIVES December 14, 2005 Mr. English of Pennsylvania 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 reform the charitable contribution deduction rules on contributions of certain easements on buildings in registered historic districts, and for other purposes.

1.

Reform of charitable contributions of certain easements on buildings in registered historic districts

(a)

Special rules with respect to buildings in registered historic districts

Paragraph (4) of section 170(h) of the Internal Revenue Code of 1986 (relating to definition of conservation purpose) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: (B)

Special rules with respect to buildings in registered historic districts

In the case of any contribution of a qualified real property interest which is a restriction with respect to the exterior of a building described in subparagraph (C)(ii), such contribution shall not be considered to be exclusively for conservation purposes unless— (i)such interest— (I)includes a restriction which preserves the entire exterior of the building (including the front, sides, rear, and height of the building), and (II)prohibits any change in the exterior of the building which is inconsistent with the historical character of such exterior, (ii)the donor and donee enter into a written agreement certifying, under penalty of perjury, that the donee— (I)is a qualified organization (as defined in paragraph (3)) with a purpose of environmental protection, land conservation, open space preservation, or historic preservation, and (II)has the resources to manage and enforce the restriction and a commitment to do so, and (iii)in the case of any contribution made in a taxable year beginning after the date of the enactment of this subparagraph, the taxpayer includes with the taxpayer's return for the taxable year of the contribution— (I)a qualified appraisal (within the meaning of subsection (f)(11)(E)) of the qualified property interest, (II)photographs of the entire exterior of the building, and (III)a description of all restrictions on the development of the building.. (b)

Filing Fee for Certain Contributions

Subsection (f) of section 170 of such Code (relating to disallowance of deduction in certain cases and special rules) is amended by inserting at the end the following new paragraph: (13)

Contributions of certain interests in buildings located in registered historic districts

(A)

In general

No deduction shall be allowed with respect to any contribution described in subparagraph (B) unless the taxpayer includes with the return for the taxable year of the contribution a $500 filing fee. (B)

Contribution described

A contribution is described in this subparagraph if such contribution is a qualified conservation contribution (as defined in subsection (h)) which is a restriction with respect to the exterior of a building described in subsection (h)(4)(C)(ii) and for which a deduction is claimed in excess of the greater of— (i)3 percent of the fair market value of the building (determined immediately before such contribution), or (ii)$10,000. (C)

Dedication of fee

Any fee collected under this paragraph shall be used for the enforcement of the provisions of subsection (h).. (c)

Effective date

(1)

Special rules for buildings in registered historic districts

The amendments made by subsection (a) shall apply to contributions made after the date of the enactment of this Act. (2)

Filing fee

The amendment made by subsection (b) shall apply to contributions made 180 days after the date of the enactment of this Act.

2.

Provisions relating to substantial and gross overstatements of valuations of charitable deduction property

(a)

Substantial and gross overstatements of valuations of charitable deduction property

(1)

In general

Section 6662 of the Internal Revenue Code of 1986 (relating to imposition of accuracy-related penalties) is amended by adding at the end the following new subsection: (i)

Special rules for charitable deduction property

In the case of charitable deduction property (as defined in section 6664(c)(3)(A))— (1)the determination under subsection (e)(1)(A) as to whether there is a substantial valuation misstatement under chapter 1 with respect to the value of the property shall be made by substituting 150 percent for 200 percent, and (2)the determination under subsection (h)(2)(A)(i) as to whether there is a gross valuation misstatement with respect to the value of the property shall be made by substituting 200 percent for 400 percent and by substituting 150 percent for 200 percent in applying subsection (e)(1)(A) for purposes of such determination.. (2)

Elimination of reasonable cause exception for gross misstatements

Section 6664(c)(2) of such Code (relating to reasonable cause exception for underpayments) is amended by striking paragraph (1) shall not apply unless and inserting paragraph (1) shall not apply. The preceding sentence shall not apply to a substantial valuation overstatement under chapter 1 if. (b)

Qualified appraisers and appraisals

(1)

In general

Subparagraph (E) of section 170(f)(11) of such Code is amended to read as follows: (E)

Qualified appraisal and appraiser

For purposes of this paragraph— (i)

Qualified appraisal

The term qualified appraisal means, with respect to any property, an appraisal of such property which— (I)is treated for purposes of this paragraph as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (II)is conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed under subclause (I). (ii)

Qualified appraiser

Except as provided in clause (iii), the term qualified appraiser means an individual who— (I)has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, (II)regularly performs appraisals for which the individual receives compensation, and (III)meets such other requirements as may be prescribed by the Secretary in regulations or other guidance. (iii)

Specific appraisals

An individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless— (I)the individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and (II)the individual has not been prohibited from practicing before the Internal Revenue Service by the Secretary under section 330(c) of title 31, United States Code, at any time during the 3-year period ending on the date of the appraisal.. (2)

Reasonable cause exception

Subparagraphs (B) and (C) of section 6664(c)(3) of such Code are amended to read as follows: (B)

Qualified appraisal

The term qualified appraisal has the meaning given such term by section 170(f)(11)(E)(i). (C)

Qualified appraiser

The term qualified appraiser has the meaning given such term by section 170(f)(11)(E)(ii).. (c)

Effective dates

(1)

Misstatement penalties

The amendments made by subsection (a) shall apply to returns filed after the date of the enactment of this Act. (2)

Appraiser provisions

The amendments made by subsection (b) shall apply to appraisals prepared with respect to returns or submissions filed after the date of the enactment of this Act.