[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3997 Reported in House (RH)]
Union Calendar No. 268
110th CONGRESS
1st Session
H. R. 3997
[Report No. 110-426]
To amend the Internal Revenue Code of 1986 to provide earnings
assistance and tax relief to members of the uniformed services,
volunteer firefighters, and Peace Corps volunteers, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 30, 2007
Mr. Rangel introduced the following bill; which was referred to the
Committee on Ways and Means
November 5, 2007
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on October
30, 2007]
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide earnings
assistance and tax relief to members of the uniformed services,
volunteer firefighters, and Peace Corps volunteers, 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, ETC.
(a) Short Title.--This Act may be cited as the ``Heroes Earnings
Assistance and Relief Tax Act of 2007''.
(b) Reference.--Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
Sec. 101. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 102. Modification of mortgage revenue bonds for veterans.
Sec. 103. Survivor and disability payments with respect to qualified
military service.
Sec. 104. Treatment of differential military pay as wages.
Sec. 105. Exclusion from income for benefits provided to volunteer
firefighters and emergency medical
responders.
Sec. 106. Special period of limitation when uniformed services retired
pay is reduced as a result of award of
disability compensation.
Sec. 107. Distributions from retirement plans to individuals called to
active duty.
Sec. 108. Disclosure of return information relating to veterans
programs made permanent.
Sec. 109. Contributions of military death gratuities to Roth IRAs and
Education Savings Accounts.
Sec. 110. Suspension of 5-year period during service with the Peace
Corps.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
Sec. 201. Treatment of uniformed service cash remuneration as earned
income.
Sec. 202. State annuities for blind veterans to be disregarded in
determining supplemental security income
benefits.
Sec. 203. Exclusion of AmeriCorps benefits for purposes of determining
supplemental security income eligibility
and benefit amounts.
Sec. 204. Effective date.
TITLE III--REVENUE PROVISIONS
Sec. 301. Modification of penalty for failure to file partnership
returns.
Sec. 302. Penalty for failure to file S corporation returns.
Sec. 303. Increase in information return penalties.
Sec. 304. Increase in minimum penalty on failure to file a return of
tax.
TITLE I--BENEFITS FOR MILITARY AND VOLUNTEER FIREFIGHTERS
SEC. 101. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR PURPOSES
OF EARNED INCOME TAX CREDIT.
(a) In General.--Clause (vi) of section 32(c)(2)(B) (defining
earned income) is amended to read as follows:
``(vi) a taxpayer may elect to treat
amounts excluded from gross income by reason of
section 112 as earned income.''.
(b) Sunset Not Applicable.--Section 105 of the Working Families Tax
Relief Act of 2004 (relating to application of EGTRRA sunset to this
title) shall not apply to section 104(b) of such Act.
(c) Effective Date.--The amendment made by this section shall apply
to taxable years ending after December 31, 2007.
SEC. 102. MODIFICATION OF MORTGAGE REVENUE BONDS FOR VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer Requirement.--
Subparagraph (D) of section 143(d)(2) (relating to exceptions) is
amended by striking ``and before January 1, 2008''.
(b) Increase in Bond Limitation for Alaska, Oregon, and
Wisconsin.--Clause (ii) of section 143(l)(3)(B) (relating to State
veterans limit) is amended by striking ``$25,000,000'' each place it
appears and inserting ``$100,000,000''.
(c) Definition of Qualified Veteran.--Paragraph (4) of section
143(l) (defining qualified veteran) is amended to read as follows:
``(4) Qualified veteran.--For purposes of this subsection,
the term `qualified veteran' means any veteran who--
``(A) served on active duty, and
``(B) applied for the financing before the date 25
years after the last date on which such veteran left
active service.''.
(d) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2007.
SEC. 103. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO QUALIFIED
MILITARY SERVICE.
(a) Plan Qualification Requirement for Death Benefits Under USERRA-
Qualified Active Military Service.--Subsection (a) of section 401
(relating to requirements for qualification) is amended by inserting
after paragraph (36) the following new paragraph:
``(37) Death benefits under userra-qualified active
military service.--A trust shall not constitute a qualified
trust unless the plan provides that, in the case of a
participant who dies while performing qualified military
service (as defined in section 414(u)), the survivors of the
participant are entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military
service) provided under the plan had the participant resumed
and then terminated employment on account of death.''.
(b) Treatment in the Case of Death or Disability Resulting From
Active Military Service for Benefit Accrual Purposes.--Subsection (u)
of section 414 (relating to special rules relating to veterans'
reemployment rights under USERRA) is amended by redesignating
paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and
by inserting after paragraph (8) the following new paragraph:
``(9) Treatment in the case of death or disability
resulting from active military service.--
``(A) In general.--For benefit accrual purposes, an
employer sponsoring a retirement plan may treat an
individual who dies or becomes disabled (as defined
under the terms of the plan) while performing qualified
military service with respect to the employer
maintaining the plan as if the individual has resumed
employment in accordance with the individual's
reemployment rights under chapter 43 of title 38,
United States Code, on the day preceding death or
disability (as the case may be) and terminated
employment on the actual date of death or disability.
In the case of any such treatment, and subject to
subparagraphs (B) and (C), any full or partial
compliance by such plan with respect to the benefit
accrual requirements of paragraph (8) with respect to
such individual shall be treated for purposes of
paragraph (1) as if such compliance were required under
such chapter 43.
``(B) Nondiscrimination requirement.--Subparagraph
(A) shall apply only if all individuals performing
qualified military service with respect to the employer
maintaining the plan (as determined under subsections
(b), (c), (m), and (o)) who die or became disabled as a
result of performing qualified military service prior
to reemployment by the employer are credited with
service and benefits on reasonably equivalent terms.
``(C) Determination of benefits.--The amount of
employee contributions and the amount of elective
deferrals of an individual treated as reemployed under
subparagraph (A) for purposes of applying paragraph
(8)(C) shall be determined on the basis of the
individual's average actual employee contributions or
elective deferrals for the lesser of--
``(i) the 12-month period of service with
the employer immediately prior to qualified
military service, or
``(ii) if service with the employer is less
than such 12-month period, the actual length of
continuous service with the employer.''.
(c) Conforming Amendments.--
(1) Section 404(a)(2) is amended by striking ``and (31)''
and inserting ``(31), and (37)''.
(2) Section 403(b) is amended by adding at the end the
following new paragraph:
``(14) Death benefits under userra-qualified active
military service.--This subsection shall not apply to an
annuity contract unless such contract meets the requirements of
section 401(a)(37).''.
(3) Section 457(g) is amended by adding at the end the
following new paragraph:
``(4) Death benefits under userra-qualified active military
service.--A plan described in paragraph (1) shall not be
treated as an eligible deferred compensation plan unless such
plan meets the requirements of section 401(a)(37).''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to deaths and disabilities occurring on or
after January 1, 2007.
(2) Provisions relating to plan amendments.--
(A) In general.--If this subparagraph applies to
any plan or contract amendment, such plan or contract
shall be treated as being operated in accordance with
the terms of the plan during the period described in
subparagraph (B)(iii).
(B) Amendments to which subparagraph (A) applies.--
(i) In general.--Subparagraph (A) shall
apply to any amendment to any plan or annuity
contract which is made--
(I) pursuant to the amendments made
by subsection (a) or pursuant to any
regulation issued by the Secretary of
the Treasury under subsection (a), and
(II) on or before the last day of
the first plan year beginning on or
after January 1, 2009.
In the case of a governmental plan (as defined
in section 414(d) of the Internal Revenue Code
of 1986), this clause shall be applied by
substituting ``2011'' for ``2009'' in subclause
(II).
(ii) Conditions.--This paragraph shall not
apply to any amendment unless--
(I) the plan or contract is
operated as if such plan or contract
amendment were in effect for the period
described in clause (iii), and
(II) such plan or contract
amendment applies retroactively for
such period.
(iii) Period described.--The period
described in this clause is the period--
(I) beginning on the effective date
specified by the plan, and
(II) ending on the date described
in clause (i)(II) (or, if earlier, the
date the plan or contract amendment is
adopted).
SEC. 104. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES.
(a) Income Tax Withholding on Differential Wage Payments.--
(1) In general.--Section 3401 (relating to definitions) is
amended by adding at the end the following new subsection:
``(h) Differential Wage Payments to Active Duty Members of the
Uniformed Services.--
``(1) In general.--For purposes of subsection (a), any
differential wage payment shall be treated as a payment of
wages by the employer to the employee.
``(2) Differential wage payment.--For purposes of paragraph
(1), the term `differential wage payment' means any payment
which--
``(A) is made by an employer to an individual with
respect to any period during which the individual is
performing service in the uniformed services (as
defined in chapter 43 of title 38, United States Code)
while on active duty for a period of more than 30 days,
and
``(B) represents all or a portion of the wages the
individual would have received from the employer if the
individual were performing service for the employer.''.
(2) Effective date.--The amendment made by this subsection
shall apply to remuneration paid after December 31, 2007.
(b) Treatment of Differential Wage Payments for Retirement Plan
Purposes.--
(1) Pension plans.--
(A) In general.--Section 414(u) (relating to
special rules relating to veterans' reemployment rights
under USERRA), as amended by section 103(b), is amended
by adding at the end the following new paragraph:
``(12) Treatment of differential wage payments.--
``(A) In general.--Except as provided in this
paragraph, for purposes of applying this title to a
retirement plan to which this subsection applies--
``(i) an individual receiving a
differential wage payment shall be treated as
an employee of the employer making the payment,
``(ii) the differential wage payment shall
be treated as compensation, and
``(iii) the plan shall not be treated as
failing to meet the requirements of any
provision described in paragraph (1)(C) by
reason of any contribution or benefit which is
based on the differential wage payment.
``(B) Special rule for distributions.--
``(i) In general.--Notwithstanding
subparagraph (A)(i), for purposes of section
401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii),
403(b)(11)(A), or 457(d)(1)(A)(ii), an
individual shall be treated as having been
severed from employment during any period the
individual is performing service in the
uniformed services described in section
3401(h)(2)(A).
``(ii) Limitation.--If an individual elects
to receive a distribution by reason of clause
(i), the plan shall provide that the individual
may not make an elective deferral or employee
contribution during the 6-month period
beginning on the date of the distribution.
``(C) Nondiscrimination requirement.--Subparagraph
(A)(iii) shall apply only if all employees of an
employer (as determined under subsections (b), (c),
(m), and (o)) performing service in the uniformed
services described in section 3401(h)(2)(A) are
entitled to receive differential wage payments on
reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the
employer, to make contributions based on the payments
on reasonably equivalent terms. For purposes of
applying this subparagraph, the provisions of
paragraphs (3), (4), and (5) of section 410(b) shall
apply.
``(D) Differential wage payment.--For purposes of
this paragraph, the term `differential wage payment'
has the meaning given such term by section
3401(h)(2).''.
(B) Conforming amendment.--The heading for section
414(u) is amended by inserting ``and to Differential
Wage Payments to Members on Active Duty'' after
``USERRA''.
(2) Differential wage payments treated as compensation for
individual retirement plans.--Section 219(f)(1) (defining
compensation) is amended by adding at the end the following new
sentence: ``The term compensation includes any differential
wage payment (as defined in section 3401(h)(2)).''.
(3) Effective date.--The amendments made by this subsection
shall apply to years beginning after December 31, 2007.
(c) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan or
annuity contract amendment, such plan or contract shall be
treated as being operated in accordance with the terms of the
plan or contract during the period described in paragraph
(2)(B)(i).
(2) Amendments to which section applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to any amendment made by
subsection (b)(1), and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2009.
In the case of a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of 1986),
this subparagraph shall be applied by substituting
``2011'' for ``2009'' in clause (ii).
(B) Conditions.--This subsection shall not apply to
any plan or annuity contract amendment unless--
(i) during the period beginning on the date
the amendment described in subparagraph (A)(i)
takes effect and ending on the date described
in subparagraph (A)(ii) (or, if earlier, the
date the plan or contract amendment is
adopted), the plan or contract is operated as
if such plan or contract amendment were in
effect, and
(ii) such plan or contract amendment
applies retroactively for such period.
SEC. 105. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER
FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.
(a) In General.--Part III of subchapter B of chapter 1 (relating to
items specifically excluded from gross income) is amended by inserting
after section 139A the following new section:
``SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY
MEDICAL RESPONDERS.
``(a) In General.--In the case of any member of a qualified
volunteer emergency response organization, gross income shall not
include--
``(1) any qualified State and local tax benefit, and
``(2) any qualified payment.
``(b) Denial of Double Benefits.--In the case of any member of a
qualified volunteer emergency response organization--
``(1) the deduction under 164 shall be determined with
regard to any qualified State and local tax benefit, and
``(2) expenses paid or incurred by the taxpayer in
connection with the performance of services as such a member
shall be taken into account under section 170 only to the
extent such expenses exceed the amount of any qualified payment
excluded from gross income under subsection (a).
``(c) Definitions.--For purposes of this section--
``(1) Qualified state and local tax benefit.--The term
`qualified state and local tax benefit' means any reduction or
rebate of a tax described in paragraph (1), (2), or (3) of
section 164(a) provided by a State or political division
thereof on account of services performed as a member of a
qualified volunteer emergency response organization.
``(2) Qualified payment.--
``(A) In general.--The term `qualified payment'
means any payment (whether reimbursement or otherwise)
provided by a State or political division thereof on
account of the performance of services as a member of a
qualified volunteer emergency response organization.
``(B) Applicable dollar limitation.--The amount
determined under subparagraph (A) for any taxable year
shall not exceed $30 multiplied by the number of months
during such year that the taxpayer performs such
services.
``(3) Qualified volunteer emergency response
organization.--The term `qualified volunteer emergency response
organization' means any volunteer organization--
``(A) which is organized and operated to provide
firefighting or emergency medical services for persons
in the State or political subdivision, as the case may
be, and
``(B) which is required (by written agreement) by
the State or political subdivision to furnish
firefighting or emergency medical services in such
State or political subdivision.''.
(b) Clerical Amendment.--The table of sections for such part is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. Benefits provided to volunteer firefighters and emergency
medical responders.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 106. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED SERVICES RETIRED
PAY IS REDUCED AS A RESULT OF AWARD OF DISABILITY
COMPENSATION.
(a) In General.--Subsection (d) of section 6511 (relating to
special rules applicable to income taxes) is amended by adding at the
end the following new paragraph:
``(8) Special rules when uniformed services retired pay is
reduced as a result of award of disability compensation.--
``(A) Period of limitation on filing claim.--If the
claim for credit or refund relates to an overpayment of
tax imposed by subtitle A on account of--
``(i) the reduction of uniformed services
retired pay computed under section 1406 or 1407
of title 10, United States Code, or
``(ii) the waiver of such pay under section
5305 of title 38 of such Code,
as a result of an award of compensation under title 38
of such Code pursuant to a determination by the
Secretary of Veterans Affairs, the 3-year period of
limitation prescribed in subsection (a) shall be
extended, for purposes of permitting a credit or refund
based upon the amount of such reduction or waiver,
until the end of the 1-year period beginning on the
date of such determination.
``(B) Limitation to 5 taxable years.--Subparagraph
(A) shall not apply with respect to any taxable year
which began more than 5 years before the date of such
determination.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to claims for credit or refund filed after the date of the
enactment of this Act.
(c) Transition Rules.--In the case of a determination described in
paragraph (8) of section 6511(d) of the Internal Revenue Code of 1986
(as added by this section) which is made by the Secretary of Veterans
Affairs after December 31, 2000, and before the date of the enactment
of this Act, such paragraph--
(1) shall not apply with respect to any taxable year which
began before January 1, 2001, and
(2) shall be applied by substituting for ``the date of such
determination'' in subparagraph (A) thereof.
SEC. 107. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS CALLED TO
ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is amended by
striking ``, and before December 31, 2007''.
(b) Effective Date.--The amendment made by this section shall apply
to individuals ordered or called to active duty on or after December
31, 2007.
SEC. 108. DISCLOSURE OF RETURN INFORMATION RELATING TO VETERANS
PROGRAMS MADE PERMANENT.
(a) In General.--Subparagraph (D) of section 6103(l)(7) (relating
to disclosure of return information to Federal, State, and local
agencies administering certain programs under the Social Security Act,
the Food Stamp Act of 1977, or title 38, United States Code or certain
housing assistance programs) is amended by striking the last sentence.
(b) Effective Date.--The amendments made by this section shall
apply to requests made after September 30, 2008.
SEC. 109. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH IRAS AND
EDUCATION SAVINGS ACCOUNTS.
(a) Provision in Effect Before Pension Protection Act.--Subsection
(e) of section 408A (relating to qualified rollover contribution), as
in effect before the amendments made by section 824 of the Pension
Protection Act of 2006, is amended to read as follows:
``(e) Qualified Rollover Contribution.--For purposes of this
section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution to a Roth IRA from
another such account, or from an individual retirement plan,
but only if such rollover contribution meets the requirements
of section 408(d)(3). Such term includes a rollover
contribution described in section 402A(c)(3)(A). For purposes
of section 408(d)(3)(B), there shall be disregarded any
qualified rollover contribution from an individual retirement
plan (other than a Roth IRA) to a Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before
the end of the 1-year period beginning on the date on
which such individual receives an amount under section
1477 of title 10, United States Code, or section 1967
of title 38 of such Code, with respect to a person, to
the extent that such contribution does not exceed--
``(i) the sum of the amounts received
during such period by such individual under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Coverdell education savings
account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to
apply.--Section 408(d)(3)(B) shall not apply with
respect to amounts treated as a rollover by
subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is not a qualified distribution, the amount treated as
a rollover by reason of subparagraph (A) shall be
treated as investment in the contract.''.
(b) Provision in Effect After Pension Protection Act.--Subsection
(e) of section 408A, as in effect after the amendments made by section
824 of the Pension Protection Act of 2006, is amended to read as
follows:
``(e) Qualified Rollover Contribution.--For purposes of this
section--
``(1) In general.--The term `qualified rollover
contribution' means a rollover contribution--
``(A) to a Roth IRA from another such account,
``(B) from an eligible retirement plan, but only
if--
``(i) in the case of an individual
retirement plan, such rollover contribution
meets the requirements of section 408(d)(3),
and
``(ii) in the case of any eligible
retirement plan (as defined in section
402(c)(8)(B) other than clauses (i) and (ii)
thereof), such rollover contribution meets the
requirements of section 402(c), 403(b)(8), or
457(e)(16), as applicable.
For purposes of section 408(d)(3)(B), there shall be
disregarded any qualified rollover contribution from an
individual retirement plan (other than a Roth IRA) to a
Roth IRA.
``(2) Military death gratuity.--
``(A) In general.--The term `qualified rollover
contribution' includes a contribution to a Roth IRA
maintained for the benefit of an individual made before
the end of the 1-year period beginning on the date on
which such individual receives an amount under section
1477 of title 10, United States Code, or section 1967
of title 38 of such Code, with respect to a person, to
the extent that such contribution does not exceed--
``(i) the sum of the amounts received
during such period by such individual under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Coverdell education savings
account under section 530(d)(9).
``(B) Annual limit on number of rollovers not to
apply.--Section 408(d)(3)(B) shall not apply with
respect to amounts treated as a rollover by the
subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is not a qualified distribution, the amount treated as
a rollover by reason of subparagraph (A) shall be
treated as investment in the contract.''.
(c) Education Savings Accounts.--Subsection (d) of section 530 is
amended by adding at the end the following new paragraph:
``(9) Military death gratuity.--
``(A) In general.--For purposes of this section,
the term `rollover contribution' includes a
contribution to a Coverdell education savings account
made before the end of the 1-year period beginning on
the date on which the contributor receives an amount
under section 1477 of title 10, United States Code, or
section 1967 of title 38 of such Code, with respect to
a person, to the extent that such contribution does not
exceed--
``(i) the sum of the amounts received
during such period by such contributor under
such sections with respect to such person,
reduced by
``(ii) the amounts so received which were
contributed to a Roth IRA under section
408A(e)(2) or to another Coverdell education
savings account.
``(B) Annual limit on number of rollovers not to
apply.--The last sentence of paragraph (5) shall not
apply with respect to amounts treated as a rollover by
the subparagraph (A).
``(C) Application of section 72.--For purposes of
applying section 72 in the case of a distribution which
is includible in gross income under paragraph (1), the
amount treated as a rollover by reason of subparagraph
(A) shall be treated as investment in the contract.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraphs (2) and
(3), the amendments made by this section shall apply with
respect to deaths from injuries occurring on or after the date
of the enactment of this Act.
(2) Application of amendments to deaths from injuries
occurring on or after october 7, 2001, and before enactment.--
The amendments made by this section shall apply to any
contribution made pursuant to section 408A(e)(2) or 530(d)(5)
of the Internal Revenue Code of 1986, as amended by this Act,
with respect to amounts received under section 1477 of title
10, United States Code, or under section 1967 of title 38 of
such Code, for deaths from injuries occurring on or after
October 7, 2001, and before the date of the enactment of this
Act if such contribution is made not later than 1 year after
the date of the enactment of this Act.
(3) Pension protection act changes.--Section 408A(e)(1) of
the Internal Revenue Code of 1986 (as in effect after the
amendments made by subsection (b)) shall apply to taxable years
beginning after December 31, 2007.
SEC. 110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE PEACE
CORPS.
(a) In General.--Subsection (d) of section 121 (relating to special
rules) is amended by adding at the end the following new paragraph:
``(12) Peace corps.--
``(A) In general.--At the election of an individual
with respect to a property, the running of the 5-year
period described in subsections (a) and (c)(1)(B) and
paragraph (7) of this subsection with respect to such
property shall be suspended during any period that such
individual or such individual's spouse is serving
outside the United States--
``(i) on qualified official extended duty
(as defined in paragraph (9)(C)) as an employee
of the Peace Corps, or
``(ii) as an enrolled volunteer or
volunteer leader under section 5 or 6 (as the
case may be) of the Peace Corps Act (22 U.S.C.
2504, 2505).
``(B) Applicable rules.--For purposes of
subparagraph (A), rules similar to the rules of
subparagraphs (B) and (D) shall apply.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2007.
TITLE II--IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME
SEC. 201. TREATMENT OF UNIFORMED SERVICE CASH REMUNERATION AS EARNED
INCOME.
(a) In General.--Section 1612(a)(1)(A) of the Social Security Act
(42 U.S.C. 1382a(a)(1)(A)) is amended by inserting ``(and, in the case
of cash remuneration paid for service as a member of a uniformed
service (other than payments described in paragraph (2)(H) of this
subsection or subsection (b)(20)), without regard to the limitations
contained in section 209(d))'' before the semicolon.
(b) Certain Housing Payments Treated as In-Kind Support and
Maintenance.--Section 1612(a)(2) of such Act (42 U.S.C. 1382a(a)(2)) is
amended--
(1) by striking ``and'' at the end of subparagraph (F);
(2) by striking the period at the end of subparagraph (G)
and inserting ``; and''; and
(3) by adding at the end the following:
``(H) payments to or on behalf of a member of a
uniformed service for housing of the member (and his or
her dependents, if any) on a facility of a uniformed
service, including payments provided under section 403
of title 37, United States Code, for housing that is
acquired or constructed under subchapter IV of chapter
169 of title 10 of such Code, or any related provision
of law, and any such payments shall be treated as
support and maintenance in kind subject to subparagraph
(A) of this paragraph.''.
SEC. 202. STATE ANNUITIES FOR BLIND VETERANS TO BE DISREGARDED IN
DETERMINING SUPPLEMENTAL SECURITY INCOME BENEFITS.
(a) Income Disregard.--Section 1612(b) of the Social Security Act
(42 U.S.C. 1382a(b)) is amended--
(1) by striking ``and'' at the end of paragraph (22);
(2) by striking the period at the end of paragraph (23) and
inserting ``; and''; and
(3) by adding at the end the following:
``(24) any annuity paid by a State to the individual (or
such spouse) on the basis of the individual's being a veteran
(as defined in section 101 of title 38, United States Code) and
blind.''.
(b) Resource Disregard.--Section 1613(a) of such Act (42 U.S.C.
1382b(a)) is amended--
(1) by striking ``and'' at the end of paragraph (14);
(2) by striking the period at the end of paragraph (15) and
inserting ``; and''; and
(3) by inserting after paragraph (15) the following:
``(16) for the month of receipt and every month thereafter,
any annuity paid by a State to the individual (or such spouse)
on the basis of the individual's being a veteran (as defined in
section 101 of title 38, United States Code) and blind.''.
SEC. 203. EXCLUSION OF AMERICORPS BENEFITS FOR PURPOSES OF DETERMINING
SUPPLEMENTAL SECURITY INCOME ELIGIBILITY AND BENEFIT
AMOUNTS.
Section 1612(b) of the Social Security Act (42 U.S.C. 1382a(b)), as
amended by section 202(a) of this Act, is amended--
(1) in paragraph (23), by striking ``and'' at the end;
(2) in paragraph (24), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(25) any benefit (whether cash or in-kind) conferred upon
(or paid on behalf of) a participant in an AmeriCorps position
approved by the Corporation for National and Community Service
under section 123 of the National and Community Service Act of
1990 (42 U.S.C. 12573).''.
SEC. 204. EFFECTIVE DATE.
The amendments made by this title shall be effective with respect
to benefits payable for months beginning after 60 days after the date
of the enactment of this Act.
TITLE III--REVENUE PROVISIONS
SEC. 301. MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP
RETURNS.
(a) Extension of Time Limitation.--Subsection (a) of section 6698
(relating to general rule) is amended by striking ``5 months'' and
inserting ``12 months''.
(b) Increase in Penalty Amount.--Paragraph (1) of section 6698(b)
is amended by striking ``$50'' and inserting ``$100''.
(c) Effective Date.--The amendments made by this section shall
apply to returns required to be filed after the date of the enactment
of this Act.
SEC. 302. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS.
(a) In General.--Part I of subchapter B of chapter 68 (relating to
assessable penalties) is amended by adding at the end the following new
section:
``SEC. 6699. FAILURE TO FILE S CORPORATION RETURN.
``(a) General Rule.--In addition to the penalty imposed by section
7203 (relating to willful failure to file return, supply information,
or pay tax), if any S corporation required to file a return under
section 6037 for any taxable year--
``(1) fails to file such return at the time prescribed
therefor (determined with regard to any extension of time for
filing), or
``(2) files a return which fails to show the information
required under section 6037,
such S corporation shall be liable for a penalty determined under
subsection (b) for each month (or fraction thereof) during which such
failure continues (but not to exceed 12 months), unless it is shown
that such failure is due to reasonable cause.
``(b) Amount Per Month.--For purposes of subsection (a), the amount
determined under this subsection for any month is the product of--
``(1) $100, multiplied by
``(2) the number of persons who were shareholders in the S
corporation during any part of the taxable year.
``(c) Assessment of Penalty.--The penalty imposed by subsection (a)
shall be assessed against the S corporation.
``(d) Deficiency Procedures Not To Apply.--Subchapter B of chapter
63 (relating to deficiency procedures for income, estate, gift, and
certain excise taxes) shall not apply in respect of the assessment or
collection of any penalty imposed by subsection (a).''.
(b) Clerical Amendment.--The table of sections for part I of
subchapter B of chapter 68 is amended by adding at the end the
following new item:
``Sec. 6699. Failure to file S corporation return.''.
(c) Effective Date.--The amendments made by this section shall
apply to returns required to be filed after the date of the enactment
of this Act.
SEC. 303. INCREASE IN INFORMATION RETURN PENALTIES.
(a) Failure To File Correct Information Returns.--
(1) In general.--Subsections (a)(1), (b)(1)(A), and
(b)(2)(A) of section 6721 are each amended by striking ``$50''
and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 are each amended by
striking ``$250,000'' and inserting ``$600,000''.
(b) Reduction Where Correction Within 30 Days.--
(1) In general.--Subparagraph (A) of section 6721(b)(1) is
amended by striking ``$15'' and inserting ``$25''.
(2) Aggregate annual limitation.--Subsections (b)(1)(B) and
(d)(1)(B) of section 6721 are each amended by striking
``$75,000'' and inserting ``$200,000''.
(c) Reduction Where Correction On or Before August 1.--
(1) In general.--Subparagraph (A) of section 6721(b)(2) is
amended by striking ``$30'' and inserting ``$60''.
(2) Aggregate annual limitation.--Subsections (b)(2)(B) and
(d)(1)(C) of section 6721 are each amended by striking
``$150,000'' and inserting ``$400,000''.
(d) Aggregate Annual Limitations for Persons With Gross Receipts of
Not More Than $5,000,000.--Paragraph (1) of section 6721(d) is
amended--
(1) by striking ``$100,000'' in subparagraph (A) and
inserting ``$250,000'',
(2) by striking ``$25,000'' in subparagraph (B) and
inserting ``$75,000'', and
(3) by striking ``$50,000'' in subparagraph (C) and
inserting ``$150,000''.
(e) Penalty in Case of Intentional Disregard.--Paragraph (2) of
section 6721(e) is amended by striking ``$100'' and inserting ``$250''.
(f) Failure To Furnish Correct Payee Statements.--
(1) In general.--Subsection (a) of section 6722 is amended
by striking ``$50'' and inserting ``$100''.
(2) Aggregate annual limitation.--Subsections (a) and
(c)(2)(A) of section 6722 are each amended by striking
``$100,000'' and inserting ``$600,000''.
(3) Penalty in case of intentional disregard.--Paragraph
(1) of section 6722(c) is amended by striking ``$100'' and
inserting ``$250''.
(g) Failure To Comply With Other Information Reporting
Requirements.--Section 6723 is amended--
(1) by striking ``$50'' and inserting ``$100'', and
(2) by striking ``$100,000'' and inserting ``$600,000''.
(h) Effective Date.--The amendments made by this section shall
apply with respect to information returns required to be filed on or
after January 1, 2008.
SEC. 304. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A RETURN OF
TAX.
(a) In General.--Subsection (a) of section 6651 is amended by
striking ``$100'' in the last sentence and inserting ``$225''.
(b) Effective Date.--The amendment made by this section shall apply
to returns the due date for the filing of which (including extensions)
is after December 31, 2007.
Union Calendar No. 268
110th CONGRESS
1st Session
H. R. 3997
[Report No. 110-426]
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide earnings
assistance and tax relief to members of the uniformed services,
volunteer firefighters, and Peace Corps volunteers, and for other
purposes.
_______________________________________________________________________
November 5, 2007
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed