[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1591 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1591

To amend the Internal Revenue Code of 1986 to modify the rules relating 
to the suspension of interest and certain penalties where the taxpayer 
   is not contacted by the Internal Revenue Service within 18 months.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2005

  Mr. Baucus (for himself and Mr. Grassley) 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 modify the rules relating 
to the suspension of interest and certain penalties where the taxpayer 
   is not contacted by the Internal Revenue Service within 18 months.

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

SECTION 1. MODIFICATIONS OF SUSPENSION OF INTEREST AND PENALTIES WHERE 
              INTERNAL REVENUE SERVICE FAILS TO CONTACT TAXPAYER.

    (a) Effective Date of Exception From Suspension Rules for Certain 
Listed and Reportable Transactions.--
            (1) In general.--Paragraph (2) of section 903(d) of the 
        American Jobs Creation Act of 2004 is amended to read as 
        follows:
            ``(2) Exception for reportable or listed transactions.--
                    ``(A) In general.--The amendments made by 
                subsection (c) shall apply with respect to interest 
                accruing after October 3, 2004.
                    ``(B) Special rule for certain listed and 
                reportable transactions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) or (iii), the amendments made by 
                        subsection (c) shall also apply with respect to 
                        interest accruing on or before October 3, 2004.
                            ``(ii) Participants in settlement 
                        initiatives.--Clause (i) shall not apply to any 
                        transaction if, pursuant to a published 
                        settlement initiative which is offered by the 
                        Secretary of the Treasury to a group of 
                        similarly situated taxpayers claiming benefits 
                        from the transaction, the taxpayer has entered 
                        into a settlement agreement with respect to the 
                        tax liability arising in connection with the 
                        transaction.
                            ``(iii) Closed transactions.--Clause (i) 
                        shall not apply to a transaction if, as of July 
                        29, 2005 (May 9, 2005 in the case of a listed 
                        transaction)--
                                    ``(I) the assessment of all Federal 
                                income taxes for the taxable year in 
                                which the tax liability to which the 
                                interest relates arose is prevented by 
                                the operation of any law or rule of 
                                law, or
                                    ``(II) a closing agreement under 
                                section 7121 has been entered into with 
                                respect to the tax liability arising in 
                                connection with the transaction.''.
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in the provisions of the 
        American Jobs Creation Act of 2004 to which it relates.
    (b) Treatment of Amended Returns and Other Similar Notices of 
Additional Tax Owed.--
            (1) In general.--Section 6404(g)(1) of the Internal Revenue 
        Code of 1986 (relating to suspension) is amended by adding at 
        the end the following new sentence: ``If, after the return for 
        a taxable year is filed, the taxpayer provides to the Secretary 
        1 or more signed written documents showing that the taxpayer 
        owes an additional amount of tax for the taxable year, clause 
        (i) shall be applied by substituting the date the last of the 
        documents was provided for the date on which the return is 
        filed.''
            (2) Effective date.--The amendment made by this subsection 
        shall apply to documents provided on or after July 29, 2005.
                                 <all>