110 HR 6275 EH: Alternative Minimum Tax Relief Act of 2008
U.S. House of Representatives
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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.
1.
(a)This Act may be cited as the Alternative Minimum Tax Relief Act of 2008
.
(b)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)The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Title I—Individual Tax Relief
Sec. 101. Extension of increased alternative minimum tax exemption amount.
Sec. 102. Extension of alternative minimum tax relief for nonrefundable personal credits.
Title II—Revenue Provisions
Sec. 201. Income of partners for performing investment management services treated as ordinary income received for performance of services.
Sec. 202. Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof.
Sec. 203. Limitation on treaty benefits for certain deductible payments.
Sec. 204. Returns relating to payments made in settlement of payment card and third party network transactions.
Sec. 205. Application of continuous levy to property sold or leased to the Federal Government.
Sec. 206. Time for payment of corporate estimated taxes.
<enum>I</enum><header>Individual Tax Relief</header>
<section display-inline="no-display-inline" id="HD76C3E0D972B4C7A96B124FC731980C8" section-type="subsequent-section"><enum>101.</enum><header>Extension of increased alternative minimum tax exemption amount</header>
<subsection id="H85E59102047C424592D42CC0AE77D1E1"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/55">section 55(d)</external-xref> is amended—</text>
<paragraph id="H5898DD10E8524595B9EE6D6E2D170063"><enum>(1)</enum><text>by striking <quote>($66,250 in the case of taxable years beginning in 2007)</quote> in subparagraph (A) and inserting <quote>($69,950 in the case of taxable years beginning in 2008)</quote>, and</text> </paragraph>
<paragraph id="H89DDE6DE6FFE4ED7A6BF7131DBE232D4"><enum>(2)</enum><text>by striking <quote>($44,350 in the case of taxable years beginning in 2007)</quote> in subparagraph (B) and inserting <quote>($46,200 in the case of taxable years beginning in 2008)</quote>.</text> </paragraph></subsection>
<subsection id="H7D5CC76FD1074A11971D61C0D026BC18"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text> </subsection></section>
<section id="HCACA42F0B7F34AEFBAB431E68638B30"><enum>102.</enum><header>Extension of alternative minimum tax relief for nonrefundable personal credits</header>
<subsection id="HC35AC6E556E04BA0A0883C74EBC6F538"><enum>(a)</enum><header>In general</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/26">section 26(a)</external-xref> is amended—</text>
<paragraph id="H7929E032DEC0465D9853D08258FAECDB"><enum>(1)</enum><text>by striking <quote>or 2007</quote> and inserting <quote>2007, or 2008</quote>, and</text> </paragraph>
<paragraph id="H277080CA2C2848488C98EE82A8640700"><enum>(2)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">2007</header-in-text></quote> in the heading thereof and inserting <quote><header-in-text level="paragraph" style="OLC">2008</header-in-text></quote>.</text> </paragraph></subsection>
<subsection id="H5A173E5F147D4CC5BC12C44CCC5E9000"><enum>(b)</enum><header> Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text> </subsection></section>
<enum>II</enum><header>Revenue Provisions</header>
<section display-inline="no-display-inline" id="H227E9FDFCF2C4063AAA7380677AD1E09" section-type="subsequent-section"><enum>201.</enum><header>Income of partners for performing investment management services treated as ordinary income received for performance of services</header>
<subsection id="HB2823D0A901244DD90513B7D8E74BD2B"><enum>(a)</enum><header>In general</header><text>Part I of subchapter K of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H8725D91AEAA645958C3093A06637A7C" style="OLC">
<section id="HDEF99694B014423883214696D9732F00"><enum>710.</enum><header>Special rules for partners providing investment management services to partnership</header>
<subsection id="H11DAA93093E7435FA3DEAD427FE2F32"><enum>(a)</enum><header>Treatment of distributive share of partnership items</header><text display-inline="yes-display-inline">For purposes of this title, in the case of an investment services partnership interest—</text>
<paragraph id="HA2D9C5B7592046779E45DABF0F493B"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 702(b)—</text>
<subparagraph id="H4EDA5909CC1E487A95C1E4EF96F09811"><enum>(A)</enum><text>any net income with respect to such interest for any partnership taxable year shall be treated as ordinary income for the performance of services, and</text> </subparagraph>
<subparagraph id="H613095275DF745409490E059FE5B6168"><enum>(B)</enum><text>any net loss with respect to such interest for such year, to the extent not disallowed under paragraph (2) for such year, shall be treated as an ordinary loss.</text> </subparagraph><continuation-text continuation-text-level="paragraph">All items of income, gain, deduction, and loss which are taken into account in computing net income or net loss shall be treated as ordinary income or ordinary loss (as the case may be).</continuation-text></paragraph>
<paragraph id="H01CDAD5A12FE4989A3F934B0F77D73E"><enum>(2)</enum><header>Treatment of losses</header>
<subparagraph id="HF923B4EEB3C94F57BD67D2AEEAF72DFD"><enum>(A)</enum><header>Limitation</header><text>Any net loss with respect to such interest shall be allowed for any partnership taxable year only to the extent that such loss does not exceed the excess (if any) of—</text>
<clause id="HB292F70883A04E69BA83797958D808D6"><enum>(i)</enum><text>the aggregate net income with respect to such interest for all prior partnership taxable years, over</text> </clause>
<clause id="HD83E1F1D134E476C8D8C7F5F597E6700"><enum>(ii)</enum><text>the aggregate net loss with respect to such interest not disallowed under this subparagraph for all prior partnership taxable years.</text> </clause></subparagraph>
<subparagraph id="H7290C57A7C5B43029DB6B966473C8FA1"><enum>(B)</enum><header>Carryforward</header><text>Any net loss for any partnership taxable year which is not allowed by reason of subparagraph (A) shall be treated as an item of loss with respect to such partnership interest for the succeeding partnership taxable year.</text> </subparagraph>
<subparagraph id="H59D350AA5012416DB3B2B964481FC852"><enum>(C)</enum><header>Basis adjustment</header><text>No adjustment to the basis of a partnership interest shall be made on account of any net loss which is not allowed by reason of subparagraph (A).</text> </subparagraph>
<subparagraph id="H37B79CF591E144F1AF36362130D8AB76"><enum>(D)</enum><header>Exception for basis attributable to purchase of a partnership interest</header><text>In the case of an investment services partnership interest acquired by purchase, paragraph (1)(B) shall not apply to so much of any net loss with respect to such interest for any taxable year as does not exceed the excess of—</text>
<clause id="H073BD7FB14814B6491E113C04DE8DFEA"><enum>(i)</enum><text>the basis of such interest immediately after such purchase, over</text> </clause>
<clause id="H8A0B2A0FFB194ADD8BC7D5EA4E2B60D4"><enum>(ii)</enum><text>the aggregate net loss with respect to such interest to which paragraph (1)(B) did not apply by reason of this subparagraph for all prior taxable years.</text> </clause><continuation-text continuation-text-level="subparagraph">Any net loss to which paragraph (1)(B) does not apply by reason of this subparagraph shall not be taken into account under subparagraph (A).</continuation-text></subparagraph>
<subparagraph id="H1C37290475AD4D7B866230A494511D73"><enum>(E)</enum><header>Prior partnership years</header><text>Any reference in this paragraph to prior partnership taxable years shall only include prior partnership taxable years to which this section applies.</text> </subparagraph></paragraph>
<paragraph id="HBCBD5E9B4CDB41529671F9D45CFB87F6"><enum>(3)</enum><header>Net income and loss</header><text>For purposes of this section—</text>
<subparagraph id="H5CC8464E98AF49B5B8A1610084FFB232"><enum>(A)</enum><header>Net income</header><text>The term <term>net income</term> means, with respect to any investment services partnership interest, for any partnership taxable year, the excess (if any) of—</text>
<clause id="H9A308332F1DC4D67A79B01001DA746C6"><enum>(i)</enum><text>all items of income and gain taken into account by the holder of such interest under section 702 with respect to such interest for such year, over</text> </clause>
<clause id="H13882DB72BF249DABEC000437C103E4"><enum>(ii)</enum><text>all items of deduction and loss so taken into account.</text> </clause></subparagraph>
<subparagraph id="H10841E4B7CA545468428C090161B9749"><enum>(B)</enum><header>Net loss</header><text>The term <term>net loss</term> means with respect to such interest for such year, the excess (if any) of the amount described in subparagraph (A)(ii) over the amount described in subparagraph (A)(i).</text> </subparagraph></paragraph></subsection>
<subsection id="HDEC33BA61DB246DDB238A5222E3538FC"><enum>(b)</enum><header>Dispositions of partnership interests</header>
<paragraph id="H2D2AE97CD9094BF1A709C57CEC30000"><enum>(1)</enum><header>Gain</header><text>Any gain on the disposition of an investment services partnership interest shall be treated as ordinary income for the performance of services.</text> </paragraph>
<paragraph id="HEBB4C7CDDC634B78BEF1D8CBE65785AF"><enum>(2)</enum><header>Loss</header><text>Any loss on the disposition of an investment services partnership interest shall be treated as an ordinary loss to the extent of the excess (if any) of—</text>
<subparagraph id="HD72800F582DC498CAF163EFAED076438"><enum>(A)</enum><text>the aggregate net income with respect to such interest for all partnership taxable years, over</text> </subparagraph>
<subparagraph id="H4BF85C270DFB411EB7EA1F4507CDB01E"><enum>(B)</enum><text>the aggregate net loss with respect to such interest allowed under subsection (a)(2) for all partnership taxable years.</text> </subparagraph></paragraph>
<paragraph id="H350CEACF1C504AA2AB15D30083CA0990"><enum>(3)</enum><header>Disposition of portion of interest</header><text>In the case of any disposition of an investment services partnership interest, the amount of net loss which otherwise would have (but for subsection (a)(2)(C)) applied to reduce the basis of such interest shall be disregarded for purposes of this section for all succeeding partnership taxable years.</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="H0CC42611BE774AB3A4E9EC537D4B720"><enum>(4)</enum><header>Distributions of partnership property</header><text>In the case of any distribution of property by a partnership with respect to any investment services partnership interest held by a partner—</text>
<subparagraph commented="no" id="H4B7F6BD718114E10AA74547D7E2B5FAE"><enum>(A)</enum><text>the excess (if any) of—</text>
<clause commented="no" id="H72402FD715B6412583D1A6B62CD84CF2"><enum>(i)</enum><text>the fair market value of such property at the time of such distribution, over</text> </clause>
<clause commented="no" id="H793498FCB4EE4CFF8B318D422461EEB3"><enum>(ii)</enum><text>the adjusted basis of such property in the hands of the partnership,</text> </clause><continuation-text commented="no" continuation-text-level="subparagraph">shall be taken into account as an increase in such partner’s distributive share of the taxable income of the partnership (except to the extent such excess is otherwise taken into account in determining the taxable income of the partnership),</continuation-text></subparagraph>
<subparagraph commented="no" id="HCE8C198F8F1E4F55827031A469892F1C"><enum>(B)</enum><text>such property shall be treated for purposes of subpart B of part II as money distributed to such partner in an amount equal to such fair market value, and</text> </subparagraph>
<subparagraph commented="no" id="H562A9264C5A84F0386A08DCDC9A1EE"><enum>(C)</enum><text>the basis of such property in the hands of such partner shall be such fair market value.</text> </subparagraph><continuation-text continuation-text-level="paragraph">Subsection (b) of section 734 shall be applied without regard to the preceding sentence.</continuation-text></paragraph>
<paragraph id="HB077CF2D7BD8433C89809DEA23A27651"><enum>(5)</enum><header>Application of section 751</header><text>In applying section 751(a), an investment services partnership interest shall be treated as an inventory item.</text> </paragraph></subsection>
<subsection id="HD6A88D082147460E87BD02003D71C274"><enum>(c)</enum><header>Investment services partnership interest</header><text display-inline="yes-display-inline">For purposes of this section—</text>
<paragraph id="H92DBD0A428FE4C6087D8866FA6F5B6F2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>investment services partnership interest</term> means any interest in a partnership which is held by any person if such person provides (directly or indirectly) a substantial quantity of any of the following services with respect to the assets of the partnership in the conduct of the trade or business of providing such services:</text>
<subparagraph id="H467A8874AC854C51AD504CBB5D1C2B90"><enum>(A)</enum><text>Advising as to the advisability of investing in, purchasing, or selling any specified asset.</text> </subparagraph>
<subparagraph id="H993B3370E52545F000955232B7056C45"><enum>(B)</enum><text>Managing, acquiring, or disposing of any specified asset.</text> </subparagraph>
<subparagraph id="H2CDB7D13A18B4CDA882464DC53E6EDC4"><enum>(C)</enum><text>Arranging financing with respect to acquiring specified assets.</text> </subparagraph>
<subparagraph id="H1B949940CA9B45FE8C5FA09FE2A38FFC"><enum>(D)</enum><text>Any activity in support of any service described in subparagraphs (A) through (C).</text> </subparagraph><continuation-text continuation-text-level="paragraph">For purposes of this paragraph, the term <term>specified asset</term> means securities (as defined in section 475(c)(2) without regard to the last sentence thereof), real estate, commodities (as defined in section 475(e)(2))), or options or derivative contracts with respect to securities (as so defined), real estate, or commodities (as so defined).</continuation-text></paragraph>
<paragraph id="H461CA5E255BD468C8890D98B60BB2D64"><enum>(2)</enum><header>Exception for certain capital interests</header>
<subparagraph commented="no" id="H8ACC2B8585344E8FAC9FA100F7FD48A"><enum>(A)</enum><header>In general</header><text>If—</text>
<clause commented="no" id="H9E0F3EDEE3C44F4D9EB5E52B8772DFCE"><enum>(i)</enum><text>a portion of an investment services partnership interest is acquired on account of a contribution of invested capital, and</text> </clause>
<clause commented="no" id="H7E30CE4DB98446E5B19DD61F89B098F"><enum>(ii)</enum><text>the partnership makes a reasonable allocation of partnership items between the portion of the distributive share that is with respect to invested capital and the portion of such distributive share that is not with respect to invested capital,</text> </clause><continuation-text continuation-text-level="subparagraph">then subsection (a) shall not apply to the portion of the distributive share that is with respect to invested capital. An allocation will not be treated as reasonable for purposes of this subparagraph if such allocation would result in the partnership allocating a greater portion of income to invested capital than any other partner not providing services would have been allocated with respect to the same amount of invested capital.</continuation-text></subparagraph>
<subparagraph id="H87C1A3AFA5CD4D1AA065F8BCF41B8661"><enum>(B)</enum><header>Special rule for dispositions</header><text display-inline="yes-display-inline">In any case to which subparagraph (A) applies, subsection (b) shall not apply to any gain or loss allocable to invested capital. The portion of any gain or loss attributable to invested capital is the proportion of such gain or loss which is based on the distributive share of gain or loss that would have been allocable to invested capital under subparagraph (A) if the partnership sold all of its assets immediately before the disposition.</text> </subparagraph>
<subparagraph id="H47077C042E3C447300C9D61C6EA062D2"><enum>(C)</enum><header>Invested capital</header><text>For purposes of this paragraph, the term <term>invested capital</term> means, the fair market value at the time of contribution of any money or other property contributed to the partnership.</text> </subparagraph>
<subparagraph id="HED8BAC22A99C4019A107D3A30030EE4"><enum>(D)</enum><header>Treatment of certain loans</header>
<clause id="H6C456F02496C4A019F98DAFAF9D7206"><enum>(i)</enum><header>Proceeds of partnership loans not treated as invested capital of service providing partners</header><text>For purposes of this paragraph, an investment services partnership interest shall not be treated as acquired on account of a contribution of invested capital to the extent that such capital is attributable to the proceeds of any loan or other advance made or guaranteed, directly or indirectly, by any partner or the partnership.</text> </clause>
<clause id="HBEE85F9963894387981414FE573E9071"><enum>(ii)</enum><header>Loans from nonservice providing partners to the partnership treated as invested capital</header><text>For purposes of this paragraph, any loan or other advance to the partnership made or guaranteed, directly or indirectly, by a partner not providing services to the partnership shall be treated as invested capital of such partner and amounts of income and loss treated as allocable to invested capital shall be adjusted accordingly.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="HFA5D97F0BDE04AB88C06EA5D00D9CB96"><enum>(d)</enum><header>Other income and gain in connection with investment management services</header>
<paragraph id="HC4B9961F98D14FABB905A329FB6F5C2B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">If—</text>
<subparagraph id="HDD0478489EEB48DABA66F0614C77A468"><enum>(A)</enum><text>a person performs (directly or indirectly) investment management services for any entity,</text> </subparagraph>
<subparagraph id="HD7E424C359CA44318D3C41F155698FD1"><enum>(B)</enum><text>such person holds a disqualified interest with respect to such entity, and</text> </subparagraph>
<subparagraph id="H2FC4FA50155540558FB5BC10AEFF9384"><enum>(C)</enum><text display-inline="yes-display-inline">the value of such interest (or payments thereunder) is substantially related to the amount of income or gain (whether or not realized) from the assets with respect to which the investment management services are performed,</text> </subparagraph><continuation-text continuation-text-level="paragraph">any income or gain with respect to such interest shall be treated as ordinary income for the performance of services. Rules similar to the rules of subsection (c)(2) shall apply where such interest was acquired on account of invested capital in such entity.</continuation-text></paragraph>
<paragraph id="HF81E36A9E5734C28B1F605157B6EEE65"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="H57392AD2F54F46158659BDEA66253D77"><enum>(A)</enum><header>Disqualified interest</header><text>The term <term>disqualified interest</term> means, with respect to any entity—</text>
<clause id="H9FAAF3EC002D445C0089D284AD00F5D"><enum>(i)</enum><text>any interest in such entity other than indebtedness,</text> </clause>
<clause id="H928F705BB6B94ED69996D104E6A3765"><enum>(ii)</enum><text>convertible or contingent debt of such entity,</text> </clause>
<clause id="H404F1D8630A649CAB5D7CDFA45D208C"><enum>(iii)</enum><text>any option or other right to acquire property described in clause (i) or (ii), and</text> </clause>
<clause id="H40474336DD874819874B4C2908427284"><enum>(iv)</enum><text>any derivative instrument entered into (directly or indirectly) with such entity or any investor in such entity.</text> </clause><continuation-text continuation-text-level="subparagraph">Such term shall not include a partnership interest and shall not include stock in a taxable corporation.</continuation-text></subparagraph>
<subparagraph id="H9D1CB3FD2BD540CFBFBAD90ACC1144D"><enum>(B)</enum><header>Taxable corporation</header><text>The term <term>taxable corporation</term> means—</text>
<clause id="H4105C5ACB2EF4C6E9DF0A78739EC0063"><enum>(i)</enum><text>a domestic C corporation, or</text> </clause>
<clause id="HC00C5FE934C74F91853236E413724189"><enum>(ii)</enum><text>a foreign corporation subject to a comprehensive foreign income tax.</text> </clause></subparagraph>
<subparagraph id="HA663E849E34F46FABD003EBBEC2972B4"><enum>(C)</enum><header>Investment management services</header><text>The term <term>investment management services</term> means a substantial quantity of any of the services described in subsection (c)(1) which are provided in the conduct of the trade or business of providing such services.</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H4895D76DC52547DA975DF975035B6708"><enum>(D)</enum><header>Comprehensive foreign income tax</header><text>The term <term>comprehensive foreign income tax</term> means, with respect to any foreign corporation, the income tax of a foreign country if—</text>
<clause id="H5BCD060A00F14C9C9D00760003817682"><enum>(i)</enum><text>such corporation is eligible for the benefits of a comprehensive income tax treaty between such foreign country and the United States, or</text> </clause>
<clause id="H5A2E43A4B4B54B17BB43D373D8DB10C6"><enum>(ii)</enum><text>such corporation demonstrates to the satisfaction of the Secretary that such foreign country has a comprehensive income tax.</text> </clause></subparagraph></paragraph></subsection>
<subsection commented="no" id="H417FDBB9022F4F2AB04E2FC3FF14FC4D"><enum>(e)</enum><header>Regulations</header><text>The Secretary shall prescribe such regulations as are necessary or appropriate to carry out the purposes of this section, including regulations to—</text>
<paragraph commented="no" id="HC984B3C5A31E43C5AC3F2DAC053173CB"><enum>(1)</enum><text>prevent the avoidance of the purposes of this section, and</text> </paragraph>
<paragraph commented="no" id="H4689D5E4A8A744DEA5AD1C3767525036"><enum>(2)</enum><text>coordinate this section with the other provisions of this subchapter.</text> </paragraph></subsection>
<subsection commented="no" id="HA830D65FAC8548A29C8BDD338FB86EF9"><enum>(f)</enum><header>Cross reference</header><text>For 40 percent no fault penalty on certain underpayments due to the avoidance of this section, see section 6662.</text> </subsection></section> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H14C301B6C795477C82739110C654A340"><enum>(b)</enum><header>Application to real estate investment trusts</header>
<paragraph id="H1B96FA9A03AA4847BB46A74D1AB2513"><enum>(1)</enum><header>In general</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/856">section 856</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9946F29F1C23483EA7A5C05BD4C60011" style="OLC">
<paragraph id="HB610FF77DCB440349785BAB400A5285F"><enum>(9)</enum><header>Exception from recharacterization of income from investment services partnership interests</header>
<subparagraph id="H5039338202D048C3AFF8313D42DFEACA"><enum>(A)</enum><header>In general</header><text>Paragraphs (2), (3), and (4) shall be applied without regard to section 710 (relating to special rules for partners providing investment management services to partnership).</text> </subparagraph>
<subparagraph id="H80EA32C04274424F8532692866F9000"><enum>(B)</enum><header>Special rule for partnerships owned by REITs</header><text>Section 7704 shall be applied without regard to section 710 in the case of a partnership which meets each of the following requirements:</text>
<clause id="HE6A9E476DA70483FA2A49700B7F5A8C0"><enum>(i)</enum><text>Such partnership is treated as publicly traded under section 7704 solely by reason of interests in such partnership being convertible into interests in a real estate investment trust which is publicly traded.</text> </clause>
<clause id="H403E11C962FA495F801F7E0018DAD4BC"><enum>(ii)</enum><text display-inline="yes-display-inline">50 percent or more of the capital and profits interests of such partnership are owned, directly or indirectly, at all times during the taxable year by such real estate investment trust (determined with the application of section 267(c)).</text> </clause>
<clause id="HD6E0FB47E6174B9BA0671DBED91016E"><enum>(iii)</enum><text>Such partnership meets the requirements of paragraphs (2), (3), and (4) (applied without regard to section 710).</text> </clause></subparagraph></paragraph> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H27EBE23C1311450B9BBDA8F154E7C504"><enum>(2)</enum><header>Conforming amendment</header><text>Paragraph (4) of <external-xref legal-doc="usc" parsable-cite="usc/26/7704">section 7704(d)</external-xref> is amended by inserting <quote>(determined without regard to section 856(c)(8))</quote> after <quote>856(c)(2)</quote>.</text> </paragraph></subsection>
<subsection id="H3DBA1B6F60204BFDA8D9BF81E2DA87AD"><enum>(c)</enum><header>Imposition of penalty on underpayments</header>
<paragraph id="H1E7EA3874F054EC7BE5E8B00CF019E00"><enum>(1)</enum><header>In general</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/6662">section 6662</external-xref> is amended by inserting after paragraph (5) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H651498EB1E5B465B879885DB62B85860" style="OLC">
<paragraph id="H120B23CDDDA74B868BE2BB001DE91990"><enum>(6)</enum><text>The application of subsection (d) of section 710 or the regulations prescribed under section 710(e) to prevent the avoidance of the purposes of section 710.</text> </paragraph> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H732333772FBA4504BBDC75AE7E36F4AA"><enum>(2)</enum><header>Amount of penalty</header>
<subparagraph id="HE526A56FC174412691A1B1DD55FE6C34"><enum>(A)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6662">Section 6662</external-xref> is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HEA1FD373F1A14B9FBBC199817B6FB0F0" style="OLC">
<subsection id="HDFFEA927CF924B58001998C33E1FEBA"><enum>(i)</enum><header>Increase in penalty in case of property transferred for investment management services</header><text>In the case of any portion of an underpayment to which this section applies by reason of subsection (b)(6), subsection (a) shall be applied with respect to such portion by substituting <quote>40 percent</quote> for <quote>20 percent</quote>.</text> </subsection> <after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H558D40BABEDA4C13BC63A549E3DD10DE"><enum>(B)</enum><header>Conforming amendments</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/6662A">section 6662A(e)(2)</external-xref> is amended—</text>
<clause id="HC9F18E1230EF4D9696471ECFE86D2CD"><enum>(i)</enum><text>by striking <quote>section 6662(h)</quote> and inserting <quote>subsection (h) or (i) of section 6662</quote>, and</text> </clause>
<clause id="HDD058C910E1F4859860466EC8FBAC00"><enum>(ii)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">gross valuation misstatement penalty</header-in-text></quote> in the heading and inserting <quote><header-in-text level="subparagraph" style="OLC">certain increased underpayment penalties</header-in-text></quote>.</text> </clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H34F8B87733BE44A0B76E9992C751B92D"><enum>(3)</enum><header>Reasonable cause exception not applicable</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/6664">section 6664</external-xref> is amended—</text>
<subparagraph id="H29FE91036AFC4E5D99DA836E0009182F"><enum>(A)</enum><text>by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively,</text> </subparagraph>
<subparagraph id="H31B50EA557DA496A9C71756DAC56512C"><enum>(B)</enum><text>by striking <quote>paragraph (2)</quote> in paragraph (4), as so redesignated, and inserting <quote>paragraph (3)</quote>, and</text> </subparagraph>
<subparagraph id="H9289DBE9006B47CD96006E4E259606EB"><enum>(C)</enum><text>by inserting after paragraph (1) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H2B9A9AFAB50A4103BD07A679D964A3E5" style="OLC">
<paragraph id="H57AAE7670E454BF89133DF38CD3EB798"><enum>(2)</enum><header>Exception</header><text>Paragraph (1) shall not apply to any portion of an underpayment to which this section applies by reason of subsection (b)(6).</text> </paragraph> <after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection>
<subsection id="H8F833F29F9074361A36D6004A0FB2496"><enum>(d)</enum><header>Conforming amendments</header>
<paragraph id="H2804CF5435514D83ACC1204BED1EA648"><enum>(1)</enum><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/731">section 731</external-xref> is amended by inserting <quote>section 710(b)(4) (relating to distributions of partnership property),</quote> before <quote>section 736</quote>.</text> </paragraph>
<paragraph id="H013D0D2F0BA24D1994F1C5DF8BE18B4B"><enum>(2)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/741">Section 741</external-xref> is amended by inserting <quote>or section 710 (relating to special rules for partners providing investment management services to partnership)</quote> before the period at the end.</text> </paragraph>
<paragraph id="H025DD499959E4977831ECDA3006CEFAC"><enum>(3)</enum><text>Paragraph (13) of <external-xref legal-doc="usc" parsable-cite="usc/26/1402">section 1402(a)</external-xref> is amended—</text>
<subparagraph id="HCA333F422AF4410881D585C32362A482"><enum>(A)</enum><text>by striking <quote>other than guaranteed</quote> and inserting</text>
<quoted-block display-inline="yes-display-inline" id="H51FA95A444A64089A7A72FB87B76834E" style="OLC"><text>other than—</text>
<subparagraph id="H4F887EC926A7438AABD635C6CF321934"><enum>(A)</enum><text>guaranteed</text> </subparagraph> <after-quoted-block>,</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HD8994CDD84D84196A34E787F9750E7EE"><enum>(B)</enum><text>by striking the semicolon at the end and inserting <quote>, and</quote>, and</text> </subparagraph>
<subparagraph id="HE3755FD1286C4AB99BE5580001542B9"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H4095FEF1EED64A8BAEF11CF1775D74F2" style="OLC">
<subparagraph id="H1F05C3BC556E42C1A3AD9FC4EEAE467"><enum>(B)</enum><text>any income treated as ordinary income under section 710 received by an individual who provides investment management services (as defined in section 710(d)(2));</text> </subparagraph> <after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H6BE74C09C397444FB16C6DB48E613171"><enum>(4)</enum><text>Paragraph (12) of section 211(a) of the Social Security Act is amended—</text>
<subparagraph id="HF18E13F212A249E583D9D755D1E97500"><enum>(A)</enum><text>by striking <quote>other than guaranteed</quote> and inserting</text>
<quoted-block display-inline="yes-display-inline" id="H35FB1E9037CD4F27916BEBD400D2A9FA" style="OLC"><text>other than—</text>
<subparagraph id="H60A0EFC1BA2D4F9F9ED63BCFD67ED6E6"><enum>(A)</enum><text>guaranteed</text> </subparagraph> <after-quoted-block>,</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H4D26DC1EA1BC4D7CBE00959F8DBFA86E"><enum>(B)</enum><text>by striking the semicolon at the end and inserting <quote>, and</quote>, and</text> </subparagraph>
<subparagraph id="HC98EC7912C4D4531AC6620E710E9ED90"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H11D4AC974C2E4E5C9B96576BDE259183" style="OLC">
<subparagraph id="H2515E086628D42F3A71C990458E0B89E"><enum>(B)</enum><text>any income treated as ordinary income under <external-xref legal-doc="usc" parsable-cite="usc/26/710">section 710</external-xref> of the Internal Revenue Code of 1986 received by an individual who provides investment management services (as defined in section 710(d)(2) of such Code);</text> </subparagraph> <after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H3CA42EF46015431B8300528F889D7EFC"><enum>(5)</enum><text display-inline="yes-display-inline">The table of sections for part I of subchapter K of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H9AE5458A0518407BBE00726FDCEF3D00" style="OLC">
<toc container-level="quoted-block-container" idref="H8725D91AEAA645958C3093A06637A7C" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="HDEF99694B014423883214696D9732F00" level="section">Sec. 710. Special rules for partners providing investment management services to partnership.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HBA28782EDB0844BDB791A55FE35EA200"><enum>(e)</enum><header>Effective date</header>
<paragraph id="HD042B99438FB42B4824BC33763E4DCA"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years ending after June 18, 2008.</text> </paragraph>
<paragraph id="H8FA2CB1168904E3380CBB2D05E23F41D"><enum>(2)</enum><header>Partnership taxable years which include effective date</header><text>In applying <external-xref legal-doc="usc" parsable-cite="usc/26/710">section 710(a)</external-xref> of the Internal Revenue Code of 1986 (as added by this section) in the case of any partnership taxable year which includes June 18, 2008, the amount of the net income referred to in such section shall be treated as being the lesser of the net income for the entire partnership taxable year or the net income determined by only taking into account items attributable to the portion of the partnership taxable year which is after such date.</text> </paragraph>
<paragraph id="H78EC6F01F76549FA94C27FDC92867976"><enum>(3)</enum><header>Dispositions of partnership interests</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/710">Section 710(b)</external-xref> of the Internal Revenue Code of 1986 (as added by this section) shall apply to dispositions and distributions after June 18, 2008.</text> </paragraph>
<paragraph id="H1B978775BE6D4BDFA0792266ADB9BB74"><enum>(4)</enum><header>Other income and gain in connection with investment management services</header><text display-inline="yes-display-inline">Section 710(d) of such Code (as added by this section) shall take effect on June 18, 2008.</text> </paragraph>
<paragraph id="H21AAA1693BD3429A00F98FFC2FE19260"><enum>(5)</enum><header>Publicly traded partnerships</header><text>For purposes of applying section 7704, the amendments made by this section shall apply to taxable years beginning after December 31, 2010.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="HCC1097764AC64651A7C268773493E252" section-type="subsequent-section"><enum>202.</enum><header>Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof</header>
<subsection display-inline="no-display-inline" id="HA2088D56E1BB433BB8A10B7C3246524"><enum>(a)</enum><header>Denial of deduction for major integrated oil companies for income attributable to domestic production of oil, gas, or primary products thereof</header>
<paragraph id="H38E6339A32B146108DD700F7AA4C1E98"><enum>(1)</enum><header>In general</header><text>Subparagraph (B) of section 199(c)(4) (relating to exceptions) is amended by striking <quote>or</quote> at the end of clause (ii), by striking the period at the end of clause (iii) and inserting <quote>, or</quote>, and by inserting after clause (iii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H7A6478FD1C77406A00883B7DF81B55B6" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="H29FA6AE0FCBF4E1D0021D2A8A03CD3FC"><enum>(iv)</enum><text display-inline="yes-display-inline">in the case of any major integrated oil company (as defined in section 167(h)(5)(B)), the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof during any taxable year described in section 167(h)(5)(B).</text> </clause> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H0ED0210FB2B54E8DA344AD0085FB3122"><enum>(2)</enum><header>Primary product</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/199">Section 199(c)(4)(B)</external-xref> is amended by adding at the end the following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="H0062B44561494F05AE4F1E5BDA3DF78D" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">For purposes of clause (iv), the term <term>primary product</term> has the same meaning as when used in section 927(a)(2)(C), as in effect before its repeal.</quoted-block-continuation-text> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H4E561CE45B4645C8AEDE47F99134457C"><enum>(b)</enum><header>Limitation on oil related qualified production activities income for taxpayers other than major integrated oil companies</header>
<paragraph id="H9169C63990EE493982D6ED8C52E5706F"><enum>(1)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/199">Section 199(d)</external-xref> is amended by redesignating paragraph (9) as paragraph (10) and by inserting after paragraph (8) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H050F5C7E6E4647F6A0ECB817A4005BA5" style="OLC">
<paragraph id="HF68FC4BD063C42B0A348A100221248A6"><enum>(9)</enum><header>Special rule for taxpayers with oil related qualified production activities income</header>
<subparagraph id="H2BBAA5D9CA334EB38C00BC41A4FB048E"><enum>(A)</enum><header>In general</header><text>If a taxpayer (other than a major integrated oil company (as defined in section 167(h)(5)(B))) has oil related qualified production activities income for any taxable year beginning after 2009, the amount of the deduction under subsection (a) shall be reduced by 3 percent of the least of—</text>
<clause id="H97DEEE12EF864D3186D8694CE84CBD05"><enum>(i)</enum><text>the oil related qualified production activities income of the taxpayer for the taxable year,</text> </clause>
<clause id="HDB722F89355E4FCE9094F308568C757E"><enum>(ii)</enum><text>the qualified production activities income of the taxpayer for the taxable year, or</text> </clause>
<clause id="HE4AEA9979EAC4F518FA600EC4EC9F2"><enum>(iii)</enum><text>taxable income (determined without regard to this section).</text> </clause></subparagraph>
<subparagraph id="HD8EBBBCE73DF4E5CBDFD5451C728C217"><enum>(B)</enum><header>Oil related qualified production activities income</header><text>The term <term>oil related qualified production activities income</term> means for any taxable year the qualified production activities income which is attributable to the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof during such taxable year.</text> </subparagraph></paragraph> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H715A582F0AA64D3088002C9E778ECEAA"><enum>(2)</enum><header>Conforming amendment</header><text>Section 199(d)(2) (relating to application to individuals) is amended by striking <quote>subsection (a)(1)(B)</quote> and inserting <quote>subsections (a)(1)(B) and (d)(9)(A)(iii)</quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H0F263FAC24A64E2EB8B2BA004C8173B9"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2008.</text> </subsection></section>
<section display-inline="no-display-inline" id="HDF0E82ED8A1F4B18834E1F12ED1EBA04" section-type="subsequent-section"><enum>203.</enum><header>Limitation on treaty benefits for certain deductible payments</header>
<subsection id="H87AE2B4BACF248829ED76C3613497219"><enum>(a)</enum><header>In general</header><text>Section 894 (relating to income affected by treaty) is amended by adding at the end the following new subsection:</text>
<quoted-block id="H2C29989460F149E8B7376D3FFB49CA9">
<subsection id="H2F792E7D5ACD4DD08996BEC5442638FA"><enum>(d)</enum><header>Limitation on treaty benefits for certain deductible payments</header>
<paragraph id="H6BBE15D29A764E52AAEF82CAFD2EC604"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of any deductible related-party payment, any withholding tax imposed under chapter 3 (and any tax imposed under subpart A or B of this part) with respect to such payment may not be reduced under any treaty of the United States unless any such withholding tax would be reduced under a treaty of the United States if such payment were made directly to the foreign parent corporation.</text> </paragraph>
<paragraph id="H754F72825C3B4F968E2386B99983E84C"><enum>(2)</enum><header>Deductible related-party payment</header><text>For purposes of this subsection, the term <term>deductible related-party payment</term> means any payment made, directly or indirectly, by any person to any other person if the payment is allowable as a deduction under this chapter and both persons are members of the same foreign controlled group of entities.</text> </paragraph>
<paragraph id="H41AB9FB95D3C4027B8932041F6FDBFA2"><enum>(3)</enum><header>Foreign controlled group of entities</header><text display-inline="yes-display-inline">For purposes of this subsection—</text>
<subparagraph id="HA91CABDD860E42C600ECBECA712BACF"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>foreign controlled group of entities</term> means a controlled group of entities the common parent of which is a foreign corporation.</text> </subparagraph>
<subparagraph id="H6D983E469E054FD792EB6162E4C18EFA"><enum>(B)</enum><header>Controlled group of entities</header><text display-inline="yes-display-inline">The term <term>controlled group of entities</term> means a controlled group of corporations as defined in section 1563(a)(1), except that—</text>
<clause id="HC14DE99C18A447E3978BC3AA5C130559"><enum>(i)</enum><text><quote>more than 50 percent</quote> shall be substituted for <quote>at least 80 percent</quote> each place it appears therein, and</text> </clause>
<clause id="H30654098364D4440B027A87AED48312"><enum>(ii)</enum><text>the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563.</text> </clause><continuation-text continuation-text-level="subparagraph">A partnership or any other entity (other than a corporation) shall be treated as a member of a controlled group of entities if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).</continuation-text></subparagraph></paragraph>
<paragraph id="HFD74981519224BC1B1096926A5A853D"><enum>(4)</enum><header>Foreign parent corporation</header><text>For purposes of this subsection, the term <term>foreign parent corporation</term> means, with respect to any deductible related-party payment, the common parent of the foreign controlled group of entities referred to in paragraph (3)(A).</text> </paragraph>
<paragraph id="HA7867F2B79904B73AE501B5E1FA2FE15"><enum>(5)</enum><header>Regulations</header><text>The Secretary may prescribe such regulations or other guidance as are necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance which provide for—</text>
<subparagraph id="H06D451DC43304189B300A98FDB4E2F3C"><enum>(A)</enum><text>the treatment of two or more persons as members of a foreign controlled group of entities if such persons would be the common parent of such group if treated as one corporation, and</text> </subparagraph>
<subparagraph id="H0001F2CFA1344569B5D7075CF1CB2040"><enum>(B)</enum><text>the treatment of any member of a foreign controlled group of entities as the common parent of such group if such treatment is appropriate taking into account the economic relationships among such entities.</text> </subparagraph></paragraph></subsection> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HF326E102B6FA493ABB12EF586C8BC5A0"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to payments made after the date of the enactment of this Act.</text> </subsection></section>
<section id="H7965E0D4AB6C4FB88B58E500D328C227" section-type="subsequent-section"><enum>204.</enum><header>Returns relating to payments made in settlement of payment card and third party network transactions</header>
<subsection id="H64E2154D7D4B432DA830EE985B439FAE"><enum>(a)</enum><header>In general</header><text>Subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H1191C4741DF6457898DA5563EC4777ED" style="OLC">
<section id="H169063364DF043EBA7FE49974F171189"><enum>6050W.</enum><header>Returns relating to payments made in settlement of payment card and third party network transactions</header>
<subsection id="H04970718B60B42FC927DA8ACC4D2DAF9"><enum>(a)</enum><header>In general</header><text>Each payment settlement entity shall make a return for each calendar year setting forth—</text>
<paragraph id="H628C48DE329F44E2B7F3A2ECE8DD3211"><enum>(1)</enum><text>the name, address, and TIN of each participating payee to whom one or more payments in settlement of reportable payment transactions are made, and</text> </paragraph>
<paragraph id="HEBB315A4A9DC4BDA85E3EAB1D000CF67"><enum>(2)</enum><text>the gross amount of the reportable payment transactions with respect to each such participating payee.</text> </paragraph><continuation-text continuation-text-level="subsection">Such return shall be made at such time and in such form and manner as the Secretary may require by regulations.</continuation-text></subsection>
<subsection id="H81625A0AD3234CF1A688046F5E3D9D52"><enum>(b)</enum><header>Payment settlement entity</header><text>For purposes of this section—</text>
<paragraph id="H916FB50AE2794FFFB163BAD63345CEA8"><enum>(1)</enum><header>In general</header><text>The term <term>payment settlement entity</term> means—</text>
<subparagraph id="H28C551E95F6B45F5A888D1E4E1E39BB4"><enum>(A)</enum><text>in the case of a payment card transaction, the merchant acquiring bank, and</text> </subparagraph>
<subparagraph id="H687817EA2CDC46ECB26D04209FF3D3F0"><enum>(B)</enum><text>in the case of a third party network transaction, the third party settlement organization.</text> </subparagraph></paragraph>
<paragraph id="H7972214DF1DA4C9F9D6746431D42DD77"><enum>(2)</enum><header>Merchant acquiring bank</header><text>The term <term>merchant acquiring bank</term> means the bank or other organization which has the contractual obligation to make payment to participating payees in settlement of payment card transactions.</text> </paragraph>
<paragraph id="HAB0E2504575646A882CB9EC3A1A465C4"><enum>(3)</enum><header>Third party settlement organization</header><text>The term <term>third party settlement organization</term> means the central organization which has the contractual obligation to make payment to participating payees of third party network transactions.</text> </paragraph>
<paragraph id="H35851A0D038E453AA6B8277FF1A4483D"><enum>(4)</enum><header>Special rules related to intermediaries</header><text display-inline="yes-display-inline">For purposes of this section—</text>
<subparagraph id="H306C6105B904443600876F27FBEEA08F"><enum>(A)</enum><header>Aggregated payees</header><text>In any case where reportable payment transactions of more than one participating payee are settled through an intermediary—</text>
<clause id="H750D4906742143278DFEA4D104005607"><enum>(i)</enum><text>such intermediary shall be treated as the participating payee for purposes of determining the reporting obligations of the payment settlement entity with respect to such transactions, and</text> </clause>
<clause id="HE446DBF69C2E46F391FDF92FD802B20"><enum>(ii)</enum><text>such intermediary shall be treated as the payment settlement entity with respect to the settlement of such transactions with the participating payees.</text> </clause></subparagraph>
<subparagraph id="HCF541524F64F403E81891CBBE62BA6D1"><enum>(B)</enum><header>Electronic payment facilitators</header><text>In any case where an electronic payment facilitator or other third party makes payments in settlement of reportable payment transactions on behalf of the payment settlement entity, the return under subsection (a) shall be made by such electronic payment facilitator or other third party in lieu of the payment settlement entity.</text> </subparagraph></paragraph></subsection>
<subsection id="H2DC116216F3E49B686609CA9F0BA1464"><enum>(c)</enum><header>Reportable payment transaction</header><text>For purposes of this section—</text>
<paragraph id="H546839E5386747BCAD0079378231DB16"><enum>(1)</enum><header>In general</header><text>The term <term>reportable payment transaction</term> means any payment card transaction and any third party network transaction.</text> </paragraph>
<paragraph id="H40CCED4BCA20497C90F9D89DA2FB6554"><enum>(2)</enum><header>Payment card transaction</header><text display-inline="yes-display-inline">The term <term>payment card transaction</term> means any transaction in which a payment card is accepted as payment.</text> </paragraph>
<paragraph id="H92CBE1136BEF491E87178500ABC34BC0"><enum>(3)</enum><header>Third party network transaction</header><text>The term <term>third party network transaction</term> means any transaction which is settled through a third party payment network.</text> </paragraph></subsection>
<subsection id="H55C0371D4B964303983CB973F0AAF5D2"><enum>(d)</enum><header>Other definitions</header><text>For purposes of this section—</text>
<paragraph id="H0212CA06C9B14594B4CF35CFA5ADCC5"><enum>(1)</enum><header>Participating payee</header>
<subparagraph id="H3121338D8D0A46708EB025CBDBE3007D"><enum>(A)</enum><header>In general</header><text>The term <term>participating payee</term> means—</text>
<clause id="H6E61866AFA3B4B7CAD3F4855FD5977B6"><enum>(i)</enum><text>in the case of a payment card transaction, any person who accepts a payment card as payment, and</text> </clause>
<clause id="H7E3DB4AD7BE8459696C25CD85B4DBCC5"><enum>(ii)</enum><text>in the case of a third party network transaction, any person who accepts payment from a third party settlement organization in settlement of such transaction.</text> </clause></subparagraph>
<subparagraph id="H6A84C3A6537941D080A092E9262E2386"><enum>(B)</enum><header>Exclusion of foreign persons</header><text>Except as provided by the Secretary in regulations or other guidance, such term shall not include any person with a foreign address.</text> </subparagraph>
<subparagraph id="H4343DB4F740147BC8B3C63CCCB9FDEFE"><enum>(C)</enum><header>Inclusion of governmental units</header><text>The term <term>person</term> includes any governmental unit (and any agency or instrumentality thereof).</text> </subparagraph></paragraph>
<paragraph id="H148C42E7FCC140F3AF8B3F90A794C508"><enum>(2)</enum><header>Payment card</header><text>The term <term>payment card</term> means any card which is issued pursuant to an agreement or arrangement which provides for—</text>
<subparagraph id="HDF67FDAA4EBD4B8EA341EA3404AF6002"><enum>(A)</enum><text>one or more issuers of such cards,</text> </subparagraph>
<subparagraph id="H93FE7CBD83DF4DD9B54DE0C14564F200"><enum>(B)</enum><text>a network of persons unrelated to each other, and to the issuer, who agree to accept such cards as payment, and</text> </subparagraph>
<subparagraph id="HFF963FF8168B43AF8D83CFBFA012B2A8"><enum>(C)</enum><text>standards and mechanisms for settling the transactions between the merchant acquiring banks and the persons who agree to accept such cards as payment.</text> </subparagraph><continuation-text continuation-text-level="paragraph">The acceptance as payment of any account number or other indicia associated with a payment card shall be treated for purposes of this section in the same manner as accepting such payment card as payment.</continuation-text></paragraph>
<paragraph id="HBAD8EC2BE2FE491995D07B5D3CE4C61C"><enum>(3)</enum><header>Third party payment network</header><text>The term <term>third party payment network</term> means any agreement or arrangement—</text>
<subparagraph id="H3038BBB03FB948ED8988AD256E2C0479"><enum>(A)</enum><text>which involves the establishment of accounts with a central organization for the purpose of settling transactions between persons who establish such accounts,</text> </subparagraph>
<subparagraph id="H0DCFF16AE29D4249A3CEAC3EC04FE5B0"><enum>(B)</enum><text>which provides for standards and mechanisms for settling such transactions,</text> </subparagraph>
<subparagraph id="HD13658EF71514E01B13E4468115E5B85"><enum>(C)</enum><text>which involves a substantial number of persons unrelated to such central organization who provide goods or services and who have agreed to settle transactions for the provision of such goods or services pursuant to such agreement or arrangement, and</text> </subparagraph>
<subparagraph id="H81CD031B4C3D4526BDC2D1CC95384E"><enum>(D)</enum><text>which guarantees persons providing goods or services pursuant to such agreement or arrangement that such persons will be paid for providing such goods or services.</text> </subparagraph><continuation-text continuation-text-level="paragraph">Such term shall not include any agreement or arrangement which provides for the issuance of payment cards.</continuation-text></paragraph></subsection>
<subsection id="H5835FFFF5F2E4759BA50B5EDE6025C80"><enum>(e)</enum><header>Exception for de minimis payments by third party settlement organizations</header><text display-inline="yes-display-inline">A third party settlement organization shall be required to report any information under subsection (a) with respect to third party network transactions of any participating payee only if—</text>
<paragraph id="H5A2033D95839423DAFCBD3AF4CB2E096"><enum>(1)</enum><text>the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions exceeds $10,000, and</text> </paragraph>
<paragraph id="H3EB34DC1B45B414FB3E041513DD043DA"><enum>(2)</enum><text>the aggregate number of such transactions exceeds 200.</text> </paragraph></subsection>
<subsection id="HA1744534C0BB4CDA97B1C85BE000071"><enum>(f)</enum><header>Statements To be furnished to persons with respect to whom information is required</header><text>Every person required to make a return under subsection (a) shall furnish to each person with respect to whom such a return is required a written statement showing—</text>
<paragraph id="H48897EDABC5D456A9212005CCD05B87E"><enum>(1)</enum><text>the name, address, and phone number of the information contact of the person required to make such return, and</text> </paragraph>
<paragraph id="HC95C99A0B2384B06B7D0561577938C1D"><enum>(2)</enum><text display-inline="yes-display-inline">the gross amount of the reportable payment transactions with respect to the person required to be shown on the return.</text> </paragraph><continuation-text continuation-text-level="subsection">The written statement required under the preceding sentence shall be furnished to the person on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made. Such statement may be furnished electronically.</continuation-text></subsection>
<subsection id="HF5381C06547D4C18B85E0000A420B831"><enum>(g)</enum><header>Regulations</header><text>The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out this section, including rules to prevent the reporting of the same transaction more than once.</text> </subsection></section> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HA9EE4F6FAFB046BFAAD96CC375278B11"><enum>(b)</enum><header>Penalty for failure To file</header>
<paragraph id="H9735478C70BB4BE0AE8FBADA7945AA1B"><enum>(1)</enum><header>Return</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/6724">section 6724(d)(1)</external-xref> is amended—</text>
<subparagraph id="H95BA1D878BC44EF980EB55CE1CDEFECF"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of clause (xx),</text> </subparagraph>
<subparagraph id="H885202E73F474A00BEDF7B4225BBCEDF"><enum>(B)</enum><text>by redesignating the clause (xix) that follows clause (xx) as clause (xxi),</text> </subparagraph>
<subparagraph id="HC4EC91E0ABA54F19B7E9653DDC784EA8"><enum>(C)</enum><text>by striking <quote>and</quote> at the end of clause (xxi), as redesignated by subparagraph (B) and inserting <quote>or</quote>, and</text> </subparagraph>
<subparagraph id="HA1FEFEA2E13847F7A3C09CB9848BE3"><enum>(D)</enum><text>by adding at the end the following:</text>
<quoted-block id="HC95C97E4269245ABBC00BBD1261EB9C9" style="OLC">
<clause id="HC828570B928944658B5334FDD0439033"><enum>(xxii)</enum><text display-inline="yes-display-inline">section 6050W (relating to returns to payments made in settlement of payment card transactions), and</text> </clause> <after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="HD6BC0AEA81D9446DAE861BD2ADD9428D"><enum>(2)</enum><header>Statement</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/6724">section 6724(d)</external-xref> is amended by inserting a comma at the end of subparagraph (BB), by striking the period at the end of the subparagraph (CC) and inserting <quote>, or</quote>, and by inserting after subparagraph (CC) the following:</text>
<quoted-block display-inline="no-display-inline" id="H04DCC82661ED47CB92FFE78DFAEF04D" style="OLC">
<subparagraph id="H0067C2791FDD444AB890F20209F785E"><enum>(DD)</enum><text display-inline="yes-display-inline">section 6050W(c) (relating to returns relating to payments made in settlement of payment card transactions).</text> </subparagraph> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H07285644430B4AAD938BF2E5277C5186"><enum>(c)</enum><header>Application of backup withholding</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/3406">section 3406(b)</external-xref> is amended by striking <quote>or</quote> at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting <quote>, or</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HB4335EB6D69E4D65AE82A6DA00E6AED7" style="OLC">
<subparagraph id="H47B91D2FD5774921B4E9C7EFD3E70406"><enum>(F)</enum><text display-inline="yes-display-inline">section 6050W (relating to returns relating to payments made in settlement of payment card transactions).</text> </subparagraph> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection display-inline="no-display-inline" id="H23EB8EB7293F430C8ED9FB3045BD887C"><enum>(d)</enum><header>Clerical amendment</header><text>The table of sections for subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by inserting after the item relating to section 6050V the following:</text>
<quoted-block display-inline="no-display-inline" id="H48790124762E4C58BF001404469104CD" style="OLC">
<toc container-level="quoted-block-container" idref="H1191C4741DF6457898DA5563EC4777ED" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H169063364DF043EBA7FE49974F171189" level="section">Sec. 6050W. Returns relating to payments made in settlement of payment card and third party network transactions.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H756C6B36F818401CB5DC23C0CF366CEC"><enum>(e)</enum><header>Effective date</header>
<paragraph id="H258D460176EE4A258F24D0C7D0FFD905"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to returns for calendar years beginning after December 31, 2010.</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="HCAA999E72A034278ADAD7BB2B8B69A7"><enum>(2)</enum><header>Application of backup withholding</header>
<subparagraph id="HC0376584477D4618A800C722601BCC00"><enum>(A)</enum><header>In general</header><text>The amendment made by subsection (c) shall apply to amounts paid after December 31, 2011.</text> </subparagraph>
<subparagraph id="H9A6CA21C12CC441AB5DD3D5BA6C88EBC"><enum>(B)</enum><header>Eligibility for TIN matching program</header><text display-inline="yes-display-inline">Solely for purposes of carrying out any TIN matching program established by the Secretary under <external-xref legal-doc="usc" parsable-cite="usc/26/3406">section 3406(i)</external-xref> of the Internal Revenue Code of 1986—</text>
<clause id="HCFBEE5C78F4C4811B75768A7CB637D70"><enum>(i)</enum><text>the amendments made this section shall be treated as taking effect on the date of the enactment of this Act, and</text> </clause>
<clause id="H03BEA73DB5CB41FEB0A98BBF8FE78107"><enum>(ii)</enum><text display-inline="yes-display-inline">each person responsible for setting the standards and mechanisms referred to in section 6050W(d)(2)(C) of such Code, as added by this section, for settling transactions involving payment cards shall be treated in the same manner as a payment settlement entity.</text> </clause></subparagraph></paragraph></subsection></section>
<section id="HB8F488CBA693427C85217B64F4E0C8F4"><enum>205.</enum><header>Application of continuous levy to property sold or leased to the Federal Government</header>
<subsection id="H9AF13AB4516F40D2ADA84406AE97D890"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/6331">section 6331(h)</external-xref> is amended by striking <quote>goods</quote> and inserting <quote>property</quote>.</text> </subsection>
<subsection id="H6635636A8ADE4ED996798DF2A9A8745E"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to levies approved after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="H0B2CF37ACB0743A7905E2ED660EC5EAB" section-type="subsequent-section"><enum>206.</enum><header>Time for payment of corporate estimated taxes</header>
<subsection id="HAA827A91EE6542A5B2D42B1CF7B594A3"><enum>(a)</enum><header>Repeal of adjustment for 2012</header><text>Subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is amended by striking the percentage contained therein and inserting <quote>100 percent</quote>.</text> </subsection>
<subsection id="HB19D6593CCFA4A2CB0FA45A3B02313CA"><enum>(b)</enum><header>Modification of adjustment for 2013</header><text display-inline="yes-display-inline">The percentage under subparagraph (C) 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 59.5 percentage points.</text> </subsection></section>
Passed the House of Representatives June 25, 2008.Lorraine C. Miller,Clerk.