[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4351 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 4351

   To amend the Internal Revenue Code of 1986 to provide individuals 
   temporary relief from the alternative minimum tax, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 11, 2007

  Mr. Rangel 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 provide individuals 
   temporary relief from the alternative minimum tax, 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 ``AMT Relief 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--INDIVIDUAL TAX RELIEF

Sec. 101. Extension of alternative minimum tax relief for nonrefundable 
                            personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption 
                            amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with 
                            long-term unused credits for prior year 
                            minimum tax liability, etc.
Sec. 104. Refundable child credit.
                      TITLE II--REVENUE PROVISIONS

    Subtitle A--Nonqualified Deferred Compensation From Certain Tax 
                          Indifferent Parties

Sec. 201. Nonqualified deferred compensation from certain tax 
                            indifferent parties.
        Subtitle B--Codification of Economic Substance Doctrine

Sec. 211. Codification of economic substance doctrine.
Sec. 212. Penalties for underpayments.
                      Subtitle C--Other Provisions

Sec. 221. Delay in application of worldwide allocation of interest.
Sec. 222. Modification of penalty for failure to file partnership 
                            returns.
Sec. 223. Penalty for failure to file S corporation returns.
Sec. 224. Increase in minimum penalty on failure to file a return of 
                            tax.
Sec. 225. Time for payment of corporate estimated taxes.

                     TITLE I--INDIVIDUAL TAX RELIEF

SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR NONREFUNDABLE 
              PERSONAL CREDITS.

    (a) In General.--Paragraph (2) of section 26(a) (relating to 
special rule for taxable years 2000 through 2006) is amended--
            (1) by striking ``or 2006'' and inserting ``2006, or 
        2007'', and
            (2) by striking ``2006'' in the heading thereof and 
        inserting ``2007''.
    (b)  Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION 
              AMOUNT.

    (a) In General.--Paragraph (1) of section 55(d) (relating to 
exemption amount) is amended--
            (1) by striking ``($62,550 in the case of taxable years 
        beginning in 2006)'' in subparagraph (A) and inserting 
        ``($66,250 in the case of taxable years beginning in 2007)'', 
        and
            (2) by striking ``($42,500 in the case of taxable years 
        beginning in 2006)'' in subparagraph (B) and inserting 
        ``($44,350 in the case of taxable years beginning in 2007)''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR INDIVIDUALS WITH 
              LONG-TERM UNUSED CREDITS FOR PRIOR YEAR MINIMUM TAX 
              LIABILITY, ETC.

    (a) In General.--Paragraph (2) of section 53(e) is amended to read 
as follows:
            ``(2) AMT refundable credit amount.--For purposes of 
        paragraph (1), the term `AMT refundable credit amount' means, 
        with respect to any taxable year, the amount (not in excess of 
        the long-term unused minimum tax credit for such taxable year) 
        equal to the greater of--
                    ``(A) 50 percent of the long-term unused minimum 
                tax credit for such taxable year, or
                    ``(B) the amount (if any) of the AMT refundable 
                credit amount determined under this paragraph for the 
                taxpayer's preceding taxable year.''.
    (b) Treatment of Certain Underpayments, Interest, and Penalties 
Attributable to the Treatment of Incentive Stock Options.--Section 53 
is amended by adding at the end the following new subsection:
    ``(f) Treatment of Certain Underpayments, Interest, and Penalties 
Attributable to the Treatment of Incentive Stock Options.--
            ``(1) Abatement.--Any underpayment of tax outstanding on 
        the date of the enactment of this subsection which is 
        attributable to the application of section 56(b)(3) for any 
        taxable year ending before January 1, 2007 (and any interest or 
        penalty with respect to such underpayment which is outstanding 
        on such date of enactment), is hereby abated. No credit shall 
        be allowed under this section with respect to any amount abated 
        under this paragraph.
            ``(2) Increase in credit for certain interest and penalties 
        already paid.--Any interest or penalty paid before the date of 
        the enactment of this subsection which would (but for such 
        payment) have been abated under paragraph (1) shall be treated 
        for purposes of this section as an amount of adjusted net 
        minimum tax imposed for the taxable year of the underpayment to 
        which such interest or penalty relates.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2006.
            (2) Abatement.--Section 53(f)(1) of the Internal Revenue 
        Code of 1986, as added by subsection (b), shall take effect on 
        the date of the enactment of this Act.

SEC. 104. REFUNDABLE CHILD CREDIT.

    (a) Modification of Threshold Amount.--Clause (i) of section 
24(d)(1)(B) is amended by inserting ``($8,500 in the case of taxable 
years beginning in 2008)'' after ``$10,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2007.

                      TITLE II--REVENUE PROVISIONS

    Subtitle A--Nonqualified Deferred Compensation From Certain Tax 
                          Indifferent Parties

SEC. 201. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    (a) In General.--Subpart B of part II of subchapter E of chapter 1 
(relating to taxable year for which items of gross income included) is 
amended by inserting after section 457 the following new section:

``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    ``(a) In General.--Any compensation which is deferred under a 
nonqualified deferred compensation plan of a nonqualified entity shall 
be taken into account for purposes of this chapter when there is no 
substantial risk of forfeiture of the rights to such compensation.
    ``(b) Nonqualified Entity.--For purposes of this section, the term 
`nonqualified entity' means--
            ``(1) any foreign corporation unless substantially all of 
        its income is--
                    ``(A) effectively connected with the conduct of a 
                trade or business in the United States, or
                    ``(B) subject to a comprehensive foreign income 
                tax, and
            ``(2) any partnership unless substantially all of its 
        income is allocated to persons other than--
                    ``(A) foreign persons with respect to whom such 
                income is not subject to a comprehensive foreign income 
                tax, and
                    ``(B) organizations which are exempt from tax under 
                this title.
    ``(c) Ascertainability of Amounts of Compensation.--
            ``(1) In general.--If the amount of any compensation is not 
        ascertainable at the time that such compensation is otherwise 
        to be taken into account under subsection (a)--
                    ``(A) such amount shall be so taken into account 
                when ascertainable, and
                    ``(B) the tax imposed under this chapter for the 
                taxable year in which such compensation is taken into 
                account under subparagraph (A) shall be increased by 
                the sum of--
                            ``(i) the amount of interest determined 
                        under paragraph (2), and
                            ``(ii) an amount equal to 20 percent of the 
                        amount of such compensation.
            ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
        interest determined under this paragraph for any taxable year 
        is the amount of interest at the underpayment rate under 
        section 6621 plus 1 percentage point on the underpayments that 
        would have occurred had the deferred compensation been 
        includible in gross income for the taxable year in which first 
        deferred or, if later, the first taxable year in which such 
        deferred compensation is not subject to a substantial risk of 
        forfeiture.
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Substantial risk of forfeiture.--
                    ``(A) In general.--The rights of a person to 
                compensation shall be treated as subject to a 
                substantial risk of forfeiture only if such person's 
                rights to such compensation are conditioned upon the 
                future performance of substantial services by any 
                individual.
                    ``(B) Exception for compensation based on gain 
                recognized on an investment asset.--
                            ``(i) In general.--To the extent provided 
                        in regulations prescribed by the Secretary, if 
                        compensation is determined solely by reference 
                        to the amount of gain recognized on the 
                        disposition of an investment asset, such 
                        compensation shall be treated as subject to a 
                        substantial risk of forfeiture until the date 
                        of such disposition.
                            ``(ii) Investment asset.--For purposes of 
                        clause (i), the term `investment asset' means 
                        any single asset (other than an investment fund 
                        or similar entity)--
                                    ``(I) acquired directly by an 
                                investment fund or similar entity,
                                    ``(II) with respect to which such 
                                entity does not (nor does any person 
                                related to such entity) participate in 
                                the active management of such asset (or 
                                if such asset is an interest in an 
                                entity, in the active management of the 
                                activities of such entity), and
                                    ``(III) substantially all of any 
                                gain on the disposition of which (other 
                                than such deferred compensation) is 
                                allocated to investors in such entity.
                            ``(iii) Coordination with special rule for 
                        short-term deferrals of compensation.--
                        Paragraph (3)(B) shall not apply to any 
                        compensation to which clause (i) applies.
            ``(2) Comprehensive foreign income tax.--The term 
        `comprehensive foreign income tax' means, with respect to any 
        foreign person, the income tax of a foreign country if--
                    ``(A) such person is eligible for the benefits of a 
                comprehensive income tax treaty between such foreign 
                country and the United States, or
                    ``(B) such person demonstrates to the satisfaction 
                of the Secretary that such foreign country has a 
                comprehensive income tax.
        Such term shall not include any tax unless such tax includes 
        rules for the deductibility of deferred compensation which are 
        similar to the rules of this title.
            ``(3) Nonqualified deferred compensation plan.--
                    ``(A) In general.--The term `nonqualified deferred 
                compensation plan' has the meaning given such term 
                under section 409A(d), except that such term shall 
                include any plan that provides a right to compensation 
                based on the appreciation in value of a specified 
                number of equity units of the service recipient.
                    ``(B) Exception for short-term deferrals.--
                Compensation shall not be treated as deferred for 
                purposes of this section if the service provider 
                receives payment of such compensation not later than 12 
                months after the end of the taxable year of the service 
                recipient during which the right to the payment of such 
                compensation is no longer subject to a substantial risk 
                of forfeiture.
            ``(4) Exception for certain compensation with respect to 
        effectively connected income.--In the case a foreign 
        corporation with income which is taxable under section 882, 
        this section shall not apply to compensation which, had such 
        compensation had been paid in cash on the date that such 
        compensation ceased to be subject to a substantial risk of 
        forfeiture, would have been deductible by such foreign 
        corporation against such income.
            ``(5) Application of rules.--Rules similar to the rules of 
        paragraphs (5) and (6) of section 409A(d) shall apply.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations disregarding a substantial risk of 
forfeiture in cases where necessary to carry out the purposes of this 
section.''.
    (b) Conforming Amendment.--Section 26(b)(2) is amended by striking 
``and'' at the end of subparagraph (S), by striking the period at the 
end of subparagraph (T) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(U) section 457A(c)(1)(B) (relating to 
                ascertainability of amounts of compensation).''.
    (c) Clerical Amendment.--The table of sections of subpart B of part 
II of subchapter E of chapter 1 is amended by inserting after the item 
relating to section 457 the following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
                            indifferent parties.''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        amounts deferred which are attributable to services performed 
        after December 31, 2007.
            (2) Application to existing deferrals.--In the case of any 
        amount deferred to which the amendments made by this section do 
        not apply solely by reason of the fact that the amount is 
        attributable to services performed before January 1, 2008, to 
        the extent such amount is not includible in gross income in a 
        taxable year beginning before 2017, such amounts shall be 
        includible in gross income in the later of--
                    (A) the last taxable year beginning before 2017, or
                    (B) the taxable year in which there is no 
                substantial risk of forfeiture of the rights to such 
                compensation (determined in the same manner as 
                determined for purposes of section 457A of the Internal 
                Revenue Code of 1986, as added by this section).
            (3) Accelerated payments.--No later than 60 days after the 
        date of the enactment of this Act, the Secretary shall issue 
        guidance providing a limited period of time during which a 
        nonqualified deferred compensation arrangement attributable to 
        services performed on or before December 31, 2007, may, without 
        violating the requirements of section 409A(a) of the Internal 
        Revenue Code of 1986, be amended to conform the date of 
        distribution to the date the amounts are required to be 
        included in income.
            (4) Certain back-to-back arrangements.--If the taxpayer is 
        also a service recipient and maintains one or more nonqualified 
        deferred compensation arrangements for its service providers 
        under which any amount is attributable to services performed on 
        or before December 31, 2007, the guidance issued under 
        paragraph (3) shall permit such arrangements to be amended to 
        conform the dates of distribution under such arrangement to the 
        date amounts are required to be included in the income of such 
        taxpayer under this subsection.
            (5) Accelerated payment not treated as material 
        modification.--Any amendment to a nonqualified deferred 
        compensation arrangement made pursuant to paragraph (3) or (4) 
        shall not be treated as a material modification of the 
        arrangement for purposes of section 409A of the Internal 
        Revenue Code of 1986.

        Subtitle B--Codification of Economic Substance Doctrine

SEC. 211. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

    (a) In General.--Section 7701 is amended by redesignating 
subsection (p) as subsection (q) and by inserting after subsection (o) 
the following new subsection:
    ``(p) Clarification of Economic Substance Doctrine.--
            ``(1) Application of doctrine.--In the case of any 
        transaction to which the economic substance doctrine is 
        relevant, such transaction shall be treated as having economic 
        substance only if--
                    ``(A) the transaction changes in a meaningful way 
                (apart from Federal income tax effects) the taxpayer's 
                economic position, and
                    ``(B) the taxpayer has a substantial purpose (apart 
                from Federal income tax effects) for entering into such 
                transaction.
            ``(2) Special rule where taxpayer relies on profit 
        potential.--
                    ``(A) In general.--The potential for profit of a 
                transaction shall be taken into account in determining 
                whether the requirements of subparagraphs (A) and (B) 
                of paragraph (1) are met with respect to the 
                transaction only if the present value of the reasonably 
                expected pre-tax profit from the transaction is 
                substantial in relation to the present value of the 
                expected net tax benefits that would be allowed if the 
                transaction were respected.
                    ``(B) Treatment of fees and foreign taxes.--Fees 
                and other transaction expenses and foreign taxes shall 
                be taken into account as expenses in determining pre-
                tax profit under subparagraph (A).
            ``(3) State and local tax benefits.--For purposes of 
        paragraph (1), any State or local income tax effect which is 
        related to a Federal income tax effect shall be treated in the 
        same manner as a Federal income tax effect.
            ``(4) Financial accounting benefits.--For purposes of 
        paragraph (1)(B), achieving a financial accounting benefit 
        shall not be taken into account as a purpose for entering into 
        a transaction if such transaction results in a Federal income 
        tax benefit.
            ``(5) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Economic substance doctrine.--The term 
                `economic substance doctrine' means the common law 
                doctrine under which tax benefits under subtitle A with 
                respect to a transaction are not allowable if the 
                transaction does not have economic substance or lacks a 
                business purpose.
                    ``(B) Exception for personal transactions of 
                individuals.--In the case of an individual, paragraph 
                (1) shall apply only to transactions entered into in 
                connection with a trade or business or an activity 
                engaged in for the production of income.
                    ``(C) Other common law doctrines not affected.--
                Except as specifically provided in this subsection, the 
                provisions of this subsection shall not be construed as 
                altering or supplanting any other rule of law, and the 
                requirements of this subsection shall be construed as 
                being in addition to any such other rule of law.
                    ``(D) Determination of application of doctrine not 
                affected.--The determination of whether the economic 
                substance doctrine is relevant to a transaction shall 
                be made in the same manner as if this subsection had 
                never been enacted.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection. Such regulations may include 
        exemptions from the application of this subsection.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after the date of the enactment of 
this Act.

SEC. 212. PENALTIES FOR UNDERPAYMENTS.

    (a) Penalty for Underpayments Attributable to Transactions Lacking 
Economic Substance.--
            (1) In general.--Subsection (b) of section 6662 is amended 
        by inserting after paragraph (5) the following new paragraph:
            ``(6) Any disallowance of claimed tax benefits by reason of 
        a transaction lacking economic substance (within the meaning of 
        section 7701(p)) or failing to meet the requirements of any 
        similar rule of law.''.
            (2) Increased penalty for nondisclosed transactions.--
        Section 6662 is amended by adding at the end the following new 
        subsection:
    ``(i) Increase in Penalty in Case of Nondisclosed Noneconomic 
Substance Transactions.--
            ``(1) In general.--To the extent that a portion of the 
        underpayment to which this section applies is attributable to 
        one or more nondisclosed noneconomic substance transactions, 
        subsection (a) shall be applied with respect to such portion by 
        substituting `40 percent' for `20 percent'.
            ``(2) Nondisclosed noneconomic substance transactions.--For 
        purposes of this subsection, the term `nondisclosed noneconomic 
        substance transaction' means any portion of a transaction 
        described in subsection (b)(6) with respect to which the 
        relevant facts affecting the tax treatment are not adequately 
        disclosed in the return nor in a statement attached to the 
        return.
            ``(3) Special rule for amended returns.--Except as provided 
        in regulations, in no event shall any amendment or supplement 
        to a return of tax be taken into account for purposes of this 
        subsection if the amendment or supplement is filed after the 
        earlier of the date the taxpayer is first contacted by the 
        Secretary regarding the examination of the return or such other 
        date as is specified by the Secretary.''.
            (3) Conforming amendment.--Subparagraph (B) of section 
        6662A(e)(2) is amended--
                    (A) by striking ``section 6662(h)'' and inserting 
                ``subsection (h) or (i) of section 6662'', and
                    (B) by striking ``gross valuation misstatement 
                penalty'' in the heading and inserting ``certain 
                increased underpayment penalties''.
    (b) Reasonable Cause Exception Not Applicable to Noneconomic 
Substance Transactions, Tax Shelters, and Certain Large Corporations.--
Subsection (c) of section 6664 is amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively,
            (2) by striking ``paragraph (2)'' in paragraph (4), as so 
        redesignated, and inserting ``paragraph (3)'', and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Exception for noneconomic substance transactions, tax 
        shelters, and certain large corporations.--Paragraph (1) shall 
        not apply--
                    ``(A) to any portion of an underpayment which is 
                attributable to one or more tax shelters (as defined in 
                section 6662(d)(2)(C)) or transactions described in 
                section 6662(b)(6), and
                    ``(B) to any taxpayer if such taxpayer is a 
                specified large corporation (as defined in section 
                6662(d)(2)(D)(ii)).''.
    (c) Application of Penalty for Erroneous Claim for Refund or Credit 
to Noneconomic Substance Transactions.--Section 6676 is amended by 
redesignating subsection (c) as subsection (d) and inserting after 
subsection (b) the following new subsection:
    ``(c) Noneconomic Substance Transactions Treated as Lacking 
Reasonable Basis.--For purposes of this section, any excessive amount 
which is attributable to any transaction described in section 
6662(b)(6) shall not be treated as having a reasonable basis.''.
    (d) Special Understatement Reduction Rule for Certain Large 
Corporations.--
            (1) In general.--Paragraph (2) of section 6662(d) is 
        amended by adding at the end the following new subparagraph:
                    ``(D) Special reduction rule for certain large 
                corporations.--
                            ``(i) In general.--In the case of any 
                        specified large corporation--
                                    ``(I) subparagraph (B) shall not 
                                apply, and
                                    ``(II) the amount of the 
                                understatement under subparagraph (A) 
                                shall be reduced by that portion of the 
                                understatement which is attributable to 
                                any item with respect to which the 
                                taxpayer has a reasonable belief that 
                                the tax treatment of such item by the 
                                taxpayer is more likely than not the 
                                proper tax treatment of such item.
                            ``(ii) Specified large corporation.--
                                    ``(I) In general.--For purposes of 
                                this subparagraph, the term `specified 
                                large corporation' means any 
                                corporation with gross receipts in 
                                excess of $100,000,000 for the taxable 
                                year involved.
                                    ``(II) Aggregation rule.--All 
                                persons treated as a single employer 
                                under section 52(a) shall be treated as 
                                one person for purposes of subclause 
                                (I).''.
            (2) Conforming amendment.--Subparagraph (C) of section 
        6662(d)(2) is amended by striking ``Subparagraph (B)'' and 
        inserting ``Subparagraphs (B) and (D)(i)(II)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                      Subtitle C--Other Provisions

SEC. 221. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are 
each amended by striking ``December 31, 2008'' and inserting ``December 
31, 2017''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 222. 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. 223. 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. 6699A. 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. 6699A. 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. 224. 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 ``$150''.
    (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.

SEC. 225. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    The percentage under subparagraph (B) of section 401(1) of the Tax 
Increase Prevention and Reconciliation Act of 2005 in effect on the 
date of the enactment of this Act is increased by 52.5 percentage 
points.
                                 <all>