1.Short title; amendment of 1986 Code; table of contents
(a)This Act may be cited as the Tax Extenders Act of 2009
.
(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; amendment of 1986 Code; table of contents.
Title I—General provisions
Subtitle A—Individual tax relief
Sec. 101. Deduction of State and local sales taxes.
Sec. 102. Additional standard deduction for State and local real property taxes.
Sec. 103. Above-the-line deduction for qualified tuition and related expenses.
Sec. 104. Deduction for certain expenses of elementary and secondary school teachers.
Subtitle B—Business tax relief
Sec. 111. Research credit.
Sec. 112. Exceptions for active financing income.
Sec. 113. Look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules.
Sec. 114. 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
Sec. 115. 7-year recovery period for motorsports entertainment complexes.
Sec. 116. Railroad track maintenance credit.
Sec. 117. Special expensing rules for certain film and television productions.
Sec. 118. Expensing of environmental remediation costs.
Sec. 119. Mine rescue team training credit.
Sec. 120. Election to expense advanced mine safety equipment.
Sec. 121. Employer wage credit for employees who are active duty members of the uniformed services.
Sec. 122. 5-year depreciation for farming business machinery and equipment.
Sec. 123. Treatment of certain dividends and assets of regulated investment companies.
Sec. 124. Look-thru of certain regulated investment company stock in determining gross estate of nonresidents.
Sec. 125. RIC qualified investment entity treatment under FIRPTA.
Sec. 126. Suspension of limitation on percentage depletion for oil and gas from marginal wells.
Subtitle C—Charitable provisions
Sec. 131. Contributions of capital gain real property made for conservation purposes.
Sec. 132. Enhanced charitable deduction for contributions of food inventory.
Sec. 133. Enhanced charitable deduction for contributions of book inventories to public schools.
Sec. 134. Enhanced charitable deduction for corporate contributions of computer technology and equipment for educational purposes.
Sec. 135. Tax-free distributions from individual retirement plans for charitable purposes.
Sec. 136. Modification of tax treatment of certain payments to controlling exempt organizations.
Sec. 137. Exclusion of gain or loss on sale or exchange of certain brownfield sites from unrelated business taxable income.
Sec. 138. Basis adjustment to stock of S corporations making charitable contributions of property.
Subtitle D—Miscellaneous provisions
Sec. 141. Indian employment tax credit.
Sec. 142. Accelerated depreciation for business property on an Indian reservation.
Sec. 143. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
Sec. 144. Temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands.
Sec. 145. American Samoa economic development credit.
Title II—Community assistance provisions
Sec. 201. Empowerment zone tax incentives.
Sec. 202. Renewal community tax incentives.
Sec. 203. New markets tax credit.
Sec. 204. Tax incentives for investment in the District of Columbia.
Sec. 205. Tax incentives for New York Liberty Zone.
Sec. 206. Tax incentives for the Gulf Opportunity Zone.
Sec. 207. Election for refundable low-income housing credit for 2010.
Title III—Disaster relief provisions
Sec. 301. Deductibility of personal casualty losses attributable to federally declared disasters.
Sec. 302. Expensing of certain qualified disaster expenses.
Sec. 303. 5-year carryback of net operating losses attributable to Federally declared disasters.
Sec. 304. Waiver of certain mortgage revenue bond requirements for residences located in Federally declared disaster areas.
Sec. 305. Expensing and special depreciation allowance for qualified disaster assistance property.
Title IV—Energy provisions
Sec. 401. Incentives for biodiesel and renewable diesel.
Sec. 402. Alternative motor vehicle credit for heavy hybrids.
Sec. 403. Alternative fuel credit for natural gas and liquified petroleum gas.
Sec. 404. Special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities.
Title V—Foreign account tax compliance
Subtitle A—Increased disclosure of beneficial owners
Sec. 501. Reporting on certain foreign accounts.
Sec. 502. Repeal of certain foreign exceptions to registered bond requirements.
Subtitle B—Under reporting with respect to foreign assets
Sec. 511. Disclosure of information with respect to foreign financial assets.
Sec. 512. Penalties for underpayments attributable to undisclosed foreign financial assets.
Sec. 513. Modification of statute of limitations for significant omission of income in connection with foreign assets.
Subtitle C—Other disclosure provisions
Sec. 521. Reporting of activities with respect to passive foreign investment companies.
Sec. 522. Secretary permitted to require financial institutions to file certain returns related to withholding on foreign transfers electronically.
Subtitle D—Provisions related to foreign trusts
Sec. 531. Clarifications with respect to foreign trusts which are treated as having a United States beneficiary.
Sec. 532. Presumption that foreign trust has United States beneficiary.
Sec. 533. Uncompensated use of trust property.
Sec. 534. Reporting requirement of United States owners of foreign trusts.
Sec. 535. Minimum penalty with respect to failure to report on certain foreign trusts.
Subtitle E—Substitute dividends and dividend equivalent payments received by foreign persons treated as dividends
Sec. 541. Substitute dividends and dividend equivalent payments received by foreign persons treated as dividends.
Title VI—Other revenue provisions
Subtitle A—Partnership interests held by partners providing services
Sec. 601. Partnership interests transferred in connection with performance of services.
Sec. 602. Income of partners for performing investment management services treated as ordinary income received for performance of services.
Subtitle B—Time for payment of corporate estimated taxes
Sec. 611. Time for payment of corporate estimated taxes.
Subtitle C—Tax Expenditure Study
Sec. 621. Findings.
Sec. 622. Study of extended tax expenditures.
<enum>I</enum><header>General provisions</header>
<subtitle id="H07585EC197A74E6B849A0D7805BC73ED"><enum>A</enum><header>Individual tax relief</header>
<section id="H1711D601DDB3472F84CA6DAFDF373643"><enum>101.</enum><header>Deduction of State and local sales taxes</header>
<subsection id="H51DE140FA3604B998F9239E233667EFD"><enum>(a)</enum><header>In general</header><text>Subparagraph (I) of section 164(b)(5) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H5761C186653A4E7CB2A8D9AF5A1895F7"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H1E8B7D7D4AE644969377226311851DA8" section-type="subsequent-section"><enum>102.</enum><header>Additional standard deduction for State and local real property taxes</header>
<subsection id="H43753D38DDAA419EA1322E88DCFAEFC1"><enum>(a)</enum><header>In general</header><text>Subparagraph (C) of section 63(c)(1) is amended by striking <quote>or 2009</quote> and inserting <quote>, 2009, or 2010</quote>.</text> </subsection>
<subsection id="HD506E7915D4D46C4997E7BCCF50A0445"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HE23332862FC241A48B7A3A1900FCDA7F" section-type="subsequent-section"><enum>103.</enum><header>Above-the-line deduction for qualified tuition and related expenses</header>
<subsection id="H3C2AE009DC924529A4165FDAA814EBE4"><enum>(a)</enum><header>In general</header><text>Subsection (e) of section 222 is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H39A18C2D3FB646CC88421A4EDFF4E0F9"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H0C6CD877608146C2A921A09B723390E4" section-type="subsequent-section"><enum>104.</enum><header>Deduction for certain expenses of elementary and secondary school teachers</header>
<subsection id="H494A3E3F05434FC691F6E46C5265C5C6"><enum>(a)</enum><header>In general</header><text>Subparagraph (D) of section 62(a)(2) is amended by striking <quote>or 2009</quote> and inserting <quote>2009, or 2010</quote>.</text> </subsection>
<subsection id="H4113200ECC904979A762F5710F9739EE"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section></subtitle>
<subtitle id="HB73DD0133BA645AC93F8658B43833249"><enum>B</enum><header>Business tax relief</header>
<section id="H1B926582EB3E4D8F9552524C288A6EE7"><enum>111.</enum><header>Research credit</header>
<subsection id="H385111EC46EA4B52A9DC991BEDD0E41B"><enum>(a)</enum><header>In general</header><text>Subparagraph (B) of section 41(h)(1) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H622E221EA98F47D1936F4AA307A1FBB6"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Subparagraph (D) of section 45C(b)(1) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H6E21C60F835C4BC3BDEEFB14CE0F9798"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply to amounts paid or incurred after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H3C14DC9EE23444F5B13058B0D064F6B5" section-type="subsequent-section"><enum>112.</enum><header>Exceptions for active financing income</header>
<subsection id="H027F6A41F2494A17AF2ECB5E5F81864A"><enum>(a)</enum><header>In general</header><text>Sections 953(e)(10) and 954(h)(9) are each amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H1F0ACEC2BAFD441E9CC5D9C40F46BF3A"><enum>(b)</enum><header>Conforming amendment</header><text>Section 953(e)(10) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H9485A32C2CAA492AB982C3FF3701BAB0"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2009, and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HFA648141D42C475A943EC9C262FC5BEE" section-type="subsequent-section"><enum>113.</enum><header>Look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules</header>
<subsection commented="no" display-inline="no-display-inline" id="H9EF275C7102C473685A12298A98A8D8C"><enum>(a)</enum><header>In general</header><text>Subparagraph (C) of section 954(c)(6) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H36ACB75EB742410C8DDD9CB7CF8DB214"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2009, and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.</text> </subsection></section>
<section display-inline="no-display-inline" id="HBB315993C39841E8B2DB8E19062F21EF" section-type="subsequent-section"><enum>114.</enum><header>15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements</header>
<subsection id="H576FB819786E4FBAABED8D0B68C3433F"><enum>(a)</enum><header>In general</header><text>Clauses (iv), (v), and (ix) of section 168(e)(3)(E) are each amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H5DE37E6C40A54ADEBF6E307120EE8E30"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HB2EA56A8E9DE42A1A2814BAF6C7A6101" section-type="subsequent-section"><enum>115.</enum><header>7-year recovery period for motorsports entertainment complexes</header>
<subsection id="H3DE6AE75B5F443D9AC42CEE04C18CA53"><enum>(a)</enum><header>In general</header><text>Subparagraph (D) of section 168(i)(15) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H1D992C182826496D95F5A570EECC6A3B"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property placed in service after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HE3680D4E4ACD4064B4693707887EA829" section-type="subsequent-section"><enum>116.</enum><header>Railroad track maintenance credit</header>
<subsection id="H0C3DCCADB61848A7ADD36CA70D984E8E"><enum>(a)</enum><header>In general</header><text>Subsection (f) of section 45G is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H938EC590F99243D9ACB90317609E6D78"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to expenditures paid or incurred in taxable years beginning after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HEE9564BB6DF443B8949AD3144D2162BE" section-type="subsequent-section"><enum>117.</enum><header>Special expensing rules for certain film and television productions</header>
<subsection id="H27F85EC328C6451B87E0CCD8DB3EE5AF"><enum>(a)</enum><header>In general</header><text>Subsection (f) of section 181 is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H7ACEA561775049718A0604D047CCEB41"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to productions commencing after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="H47C76D8BCE9F481C80432961E3DCD0B9" section-type="subsequent-section"><enum>118.</enum><header>Expensing of environmental remediation costs</header>
<subsection id="HCF15AD5F9FFA45B0837764CB7FC17910"><enum>(a)</enum><header>In general</header><text>Subsection (h) of section 198 is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H291DA04956B148FC9365A3D29BDDAB52"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to expenditures paid or incurred after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HC2CA3F72B00A4D86B44847F7C93A2851" section-type="subsequent-section"><enum>119.</enum><header>Mine rescue team training credit</header>
<subsection id="HAF1514DEB53747D4A3C57C10F86DDD99"><enum>(a)</enum><header>In general</header><text>Subsection (e) of section 45N is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="HE936D455F0584DACA56F4554A8A71B4C"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HD4C35EF7798A4357AA8668CE7FA56280" section-type="subsequent-section"><enum>120.</enum><header>Election to expense advanced mine safety equipment</header>
<subsection id="HF555EAF7D46C4B7EAC34658579F1115A"><enum>(a)</enum><header>In general</header><text>Subsection (g) of section 179E is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="HB584CCE6515F40D7B1BF6BC8DEFA2D6B"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property placed in service after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HC5267C85813D497195AA74C307B60FD3" section-type="subsequent-section"><enum>121.</enum><header>Employer wage credit for employees who are active duty members of the uniformed services</header>
<subsection id="HCD0D89C3A7464FE0857E5587AF07A64B"><enum>(a)</enum><header>In general</header><text>Subsection (f) of section 45P is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H46A53D9E9F4348BA9F08327C3E72CA9B"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to payments made after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HBB89A068434D4BF0BDAEFAFEE298FF49" section-type="subsequent-section"><enum>122.</enum><header>5-year depreciation for farming business machinery and equipment</header>
<subsection id="H4B929F1D3B9F4192A284F7DF8C5B185A"><enum>(a)</enum><header>In general</header><text>Clause (vii) of section 168(e)(3)(B) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="HF50B4351768748058E0B3B4B4AC3DCF0"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property placed in service after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H4CB9E5D1122C4AC5B47A0E19E1F5A110" section-type="subsequent-section"><enum>123.</enum><header>Treatment of certain dividends and assets of regulated investment companies</header>
<subsection id="HC571F8CAB78C452EBA14F5935F86C2A1"><enum>(a)</enum><header>In general</header><text>Paragraphs (1)(C) and (2)(C) of section 871(k) are each amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H8BC78CC692C743CCB2A2119606E301CE"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HCB9142588D8B4768819CE94BEDFA1C58" section-type="subsequent-section"><enum>124.</enum><header>Look-thru of certain regulated investment company stock in determining gross estate of nonresidents</header>
<subsection id="H8063402C86884866A10A429B8FCE05DC"><enum>(a)</enum><header>In general</header><text>Paragraph (3) of section 2105(d) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="HB54BB8B0CCDD433CBBC690D13752B208"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to estates of decedents dying after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HDD027E4984E74380ADA9036AD5E02A76" section-type="subsequent-section"><enum>125.</enum><header>RIC qualified investment entity treatment under FIRPTA</header>
<subsection id="HBE0F5A45ACA342CF83F40D8D6E5C17B2"><enum>(a)</enum><header>In general</header><text>Clause (ii) of section 897(h)(4)(A) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H8A4D89DFA8F842C49F2C436AADFC5487"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to distributions made after December 31, 2009.</text> </subsection></section>
<section id="HBCB9BD71240F4C108933CF874BAAC463"><enum>126.</enum><header>Suspension of limitation on percentage depletion for oil and gas from marginal wells</header>
<subsection id="H229B973DB1E049109BD603BB7EA9DB44"><enum>(a)</enum><header>In general</header><text>Clause (ii) of section 613A(c)(6)(H) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H50576A2A386F4EEF862C27C042F52253"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section></subtitle>
<subtitle id="H01A7CD6CBFDE4577A843F6B80BDA4668"><enum>C</enum><header>Charitable provisions</header>
<section id="H3827D86F2A7C410FB166DBFDCDE35896"><enum>131.</enum><header>Contributions of capital gain real property made for conservation purposes</header>
<subsection id="HD903215FEB0B426F918ACAFEDB0AA54E"><enum>(a)</enum><header>In general</header><text>Clause (vi) of section 170(b)(1)(E) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H48EC41D7C1D74D3CB3C6C4D4C1D669FE"><enum>(b)</enum><header>Contributions by certain corporate farmers and ranchers</header><text>Clause (iii) of section 170(b)(2)(B) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="HAE169742B4D24DC6B30A1E28A5447477"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to contributions made in taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HE39462E9ADA8441984CAEB0B50912B92" section-type="subsequent-section"><enum>132.</enum><header>Enhanced charitable deduction for contributions of food inventory</header>
<subsection id="H12EE8E397FF742B594B14D900DB690C3"><enum>(a)</enum><header>In general</header><text>Clause (iv) of section 170(e)(3)(C) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H2A95A7529BEC4F97BAE882446FAEAB65"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to contributions made after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H6D4C477F26584BA2AB87943D9EE3DAF4" section-type="subsequent-section"><enum>133.</enum><header>Enhanced charitable deduction for contributions of book inventories to public schools</header>
<subsection id="H4F63A42FB8584C929F3BCCA2532F54A6"><enum>(a)</enum><header>In general</header><text>Clause (iv) of section 170(e)(3)(D) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H5FCE4ABE91B54F978D5FD917236E407A"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to contributions made after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="H9D7AF3DEC1384B74BEFF36D51B5E2A38" section-type="subsequent-section"><enum>134.</enum><header>Enhanced charitable deduction for corporate contributions of computer technology and equipment for educational purposes</header>
<subsection id="H7B18B20FCBD24046AE34F23A9F6DD1E4"><enum>(a)</enum><header>In general</header><text>Subparagraph (G) of section 170(e)(6) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="HFB3D5A1773AC411CAAF08B63767E11DD"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to contributions made in taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HE4891AAF7F6643FEB796130DA1C0F25F" section-type="subsequent-section"><enum>135.</enum><header>Tax-free distributions from individual retirement plans for charitable purposes</header>
<subsection id="HFFF4E08125844BAA9B765ECCED6EB643"><enum>(a)</enum><header>In general</header><text>Subparagraph (F) of section 408(d)(8) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H2CA5AA7BD2A144AC9F7CE2F2C55602A1"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H72417D13C8334DEFAF22F92EB1824A61" section-type="subsequent-section"><enum>136.</enum><header>Modification of tax treatment of certain payments to controlling exempt organizations</header>
<subsection id="H1198BFE279FD4A56A84C92B04F55CFA5"><enum>(a)</enum><header>In general</header><text>Clause (iv) of section 512(b)(13)(E) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="HD9B1ED9F39004AB8A4FE97DBC964BCB0"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to payments received or accrued after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="H0E4AE7411306490C8D06BC4EE0C49EDD" section-type="subsequent-section"><enum>137.</enum><header>Exclusion of gain or loss on sale or exchange of certain brownfield sites from unrelated business taxable income</header>
<subsection id="HAA7F4CDC9A5545D38B869F2BE500E7C0"><enum>(a)</enum><header>In general</header><text>Subparagraph (K) of section 512(b)(19) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H8A3E758AA59D4180B5BB7F89113B973E"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property acquired after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H4606139CB6DD4B3C9C76A5D53C159C5E" section-type="subsequent-section"><enum>138.</enum><header>Basis adjustment to stock of S corporations making charitable contributions of property</header>
<subsection id="H96DE09160034469F98D0E584C2FB505E"><enum>(a)</enum><header>In general</header><text>Paragraph (2) of section 1367(a) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="HCE5EAA516C4844A9973DAA883C5D8164"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to contributions made in taxable years beginning after December 31, 2009.</text> </subsection></section></subtitle>
<subtitle id="HE01BCD05B7E647529404E083276947EC"><enum>D</enum><header>Miscellaneous provisions</header>
<section display-inline="no-display-inline" id="H2A86104D19E048F7895CFCA4132A34C2" section-type="subsequent-section"><enum>141.</enum><header>Indian employment tax credit</header>
<subsection id="H8B3B2BA9CFE74AA2B969172EB0B3A071"><enum>(a)</enum><header>In general</header><text>Subsection (f) of section 45A is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H4464A574B18A4F1A99159C06E2A02185"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H5346B0DAC7EE4FB0911C558A02AC07A3" section-type="subsequent-section"><enum>142.</enum><header>Accelerated depreciation for business property on an Indian reservation</header>
<subsection id="H052ABC32084B4E85B169FE012627C3F1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (8) of section 168(j) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="HF25CFF124B7D4D3D885866ED4FBB38EA"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property placed in service after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H02B0647266A54EDEB16EA4A43B950908" section-type="subsequent-section"><enum>143.</enum><header>Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico</header>
<subsection id="H56ECB41EFE8A4EE1BB23EC183F797E09"><enum>(a)</enum><header>In general</header><text>Subparagraph (C) of section 199(d)(8) is amended—</text>
<paragraph id="H073BA1C07DC14B1483E2C14AF360C0A7"><enum>(1)</enum><text>by striking <quote>first 4 taxable years</quote> and inserting <quote>first 5 taxable years</quote>, and</text> </paragraph>
<paragraph id="HDFEFC0147FE746FD82FF69123AEE8AA9"><enum>(2)</enum><text>by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H3FC4EC7523D14A1C887F186283DA60FC"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H7B621CD204D54B32B19468E58031A2D2" section-type="subsequent-section"><enum>144.</enum><header>Temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands</header>
<subsection id="H318115C9BF544009B345D9247A6FE9F0"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of section 7652(f) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H5EE6AC0543B84077A1D264A7FC077E48"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to distilled spirits brought into the United States after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HD823CCAAEFDF4ABDBE9520A54EAB143B" section-type="subsequent-section"><enum>145.</enum><header>American Samoa economic development credit</header>
<subsection id="HE394ACF8F0734E6B82AB8E94D390EF38"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (d) of section 119 of division A of the Tax Relief and Health Care Act of 2006 is amended—</text>
<paragraph id="HCC9A8F6A0D8F4C418F9C8FE510A8B3BA"><enum>(1)</enum><text>by striking <quote>first 4 taxable years</quote> and inserting <quote>first 5 taxable years</quote>, and</text> </paragraph>
<paragraph id="H1453DCCEB23A487587719F12ADA14436"><enum>(2)</enum><text>by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H01C986AA39AA4EACB329530AE533183F"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2009.</text> </subsection></section></subtitle>
<enum>II</enum><header>Community assistance provisions</header>
<section commented="no" id="HA8325C3A2CD24422A9BEEED67DADB92C"><enum>201.</enum><header>Empowerment zone tax incentives</header>
<subsection commented="no" id="H1CF7D3C248A8499E900EF3D3805CBB20"><enum>(a)</enum><header>In general</header><text>Clause (i) of section 1391(d)(1)(A) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" id="H83FE6897DC374FDFA6AAC12149A274AD"><enum>(b)</enum><header>Increased exclusion of gain on stock of empowerment zone businesses</header><text>Subparagraph (C) of section 1202(a)(2) is amended—</text>
<paragraph commented="no" id="H97FB5F6424564D5880D16125557171A1"><enum>(1)</enum><text>by striking <quote>December 31, 2014</quote> and inserting <quote>December 31, 2015</quote>, and</text> </paragraph>
<paragraph commented="no" id="H9C8FB4AF45DF4410AD0E88CC8A261AEC"><enum>(2)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">2014</header-in-text></quote> in the heading and inserting <quote><header-in-text level="subparagraph" style="OLC">2015</header-in-text></quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H8F3D5D33D9694CA485F7134A88BE1C9D"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to periods after December 31, 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HC4974A6761EF4040859BA07EBA48A260" section-type="subsequent-section"><enum>202.</enum><header>Renewal community tax incentives</header>
<subsection id="HC17E18BA86F04B83818E740C0B75A57F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 1400E is amended—</text>
<paragraph id="H4958EF68A5C04D848FE5405CBCA3F56A"><enum>(1)</enum><text>by striking <quote>December 31, 2009</quote> in paragraphs (1)(A) and (3) and inserting <quote>December 31, 2010</quote>, and</text> </paragraph>
<paragraph id="HC5A8A6F57E7347D7AB167D1D073E8011"><enum>(2)</enum><text>by striking <quote>January 1, 2010</quote> in paragraph (3) and inserting <quote>January 1, 2011</quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H17822EF32ADD469CBF783E1E91956013"><enum>(b)</enum><header>Zero-Percent capital gains rate</header>
<paragraph id="HF460A32088FD4FFD960126CC9048B8A2"><enum>(1)</enum><header>Acquisition dates</header><text>Paragraphs (2)(A)(i), (3)(A), (4)(A)(i), and (4)(B)(i) of section 1400F(b) are each amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </paragraph>
<paragraph commented="no" id="H097636FA983B4D93B846DE5ED38F841B"><enum>(2)</enum><header>Limitation on period of gains</header><text>Paragraph (2) of section 1400F(c) is amended—</text>
<subparagraph commented="no" id="H2FF8B5D139294A7FA41BD8F35D94A16B"><enum>(A)</enum><text>by striking <quote>December 31, 2014</quote> and inserting <quote>December 31, 2015</quote>, and</text> </subparagraph>
<subparagraph commented="no" id="HADA49852D41C4063A344FAF3D616DE07"><enum>(B)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">2014</header-in-text></quote> in the heading and inserting <quote><header-in-text level="paragraph" style="OLC">2015</header-in-text></quote>.</text> </subparagraph></paragraph>
<paragraph id="H49A96D4E709E43D3ADB80176757D5035"><enum>(3)</enum><header>Clerical amendment</header><text>Subsection (d) of section 1400F is amended by striking <quote>and <quote>December 31, 2014</quote> for <quote>December 31, 2014</quote></quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H24B1634B4B0C4E19B1574BCE9920F3CF"><enum>(c)</enum><header>Commercial revitalization deduction</header><text display-inline="yes-display-inline">Subsection (g) of section 1400I is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" id="H65EAE4E5684F4FA5B4D6944E2A69D56E"><enum>(d)</enum><header>Increased expensing under section 179</header><text display-inline="yes-display-inline">Subparagraph (A) of section 1400J(b)(1) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" id="H33847D00E3AA496F90C3C49D92F4CCA1"><enum>(e)</enum><header>Effective dates</header>
<paragraph commented="no" id="HDDAE0A582D524FD588CA07752E7F6B06"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except as otherwise provided in this subsection, the amendments made by this section shall apply to periods after December 31, 2009.</text> </paragraph>
<paragraph id="HADCCFD8590FE473EBAE3AE6313427BCA"><enum>(2)</enum><header>Acquisitions</header><text>The amendments made by subsection (b)(1) and (d) shall apply to acquisitions after December 31, 2009.</text> </paragraph>
<paragraph commented="no" id="H3E1EFD16669345E993F2F1DDA07CB38D"><enum>(3)</enum><header>Commercial revitalization deduction</header><text>The amendment made by subsection (c) shall apply to building placed in service after December 31, 2009.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="HAEEFDE788A104E69B56EA4768BEBF798" section-type="subsequent-section"><enum>203.</enum><header>New markets tax credit</header>
<subsection id="HC716378F10C94E818150F9442294E60C"><enum>(a)</enum><header>In general</header><text>Subparagraph (F) of section 45D(f)(1) is amended by inserting <quote>and 2010</quote> after <quote>2009</quote>.</text> </subsection>
<subsection id="HF5B3D8317B5441F09F611AF9044B6EA5"><enum>(b)</enum><header>Carryover of unused limitation</header><text>Paragraph (3) of section 45D(f) is amended by striking <quote>2014</quote> and inserting <quote>2015</quote>.</text> </subsection>
<subsection id="H36996624824E42D7B049B94BF1C9363A"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to calendar years beginning after 2009.</text> </subsection></section>
<section commented="no" display-inline="no-display-inline" id="HA1E33D84DDAC4F70B1DBDA81E0D8DAB9" section-type="subsequent-section"><enum>204.</enum><header>Tax incentives for investment in the District of Columbia</header>
<subsection commented="no" display-inline="no-display-inline" id="H350DB48A9BED41C9AC9E207C60394BDF"><enum>(a)</enum><header>In general</header><text>Subsection (f) of section 1400 is amended by striking <quote>December 31, 2009</quote> each place it appears and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H69928AEE21F54E8AAB5C1C77DD947936"><enum>(b)</enum><header>Tax-Exempt DC empowerment zone bonds</header><text>Subsection (b) of section 1400A is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H6AEDA41F6EE84F8BA70BD3D8765143CD"><enum>(c)</enum><header>Zero-Percent capital gains rate</header>
<paragraph id="HA70BE3EDB4204FF39A4AACE7F1C55DEA"><enum>(1)</enum><header>Acquisition dates</header><text>Paragraphs (2)(A)(i), (3)(A), (4)(A)(i), and (4)(B)(i)(I) of section 1400B(b) are each amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </paragraph>
<paragraph commented="no" id="HBE5B4DCB56EC49D6ABC88434CF286DD8"><enum>(2)</enum><header>Limitation on period of zero-percent capital gains</header>
<subparagraph commented="no" id="H1BA750ADCD71483A8A95193A57EB70EF"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (2) of section 1400B(e) is amended—</text>
<clause commented="no" id="HE1A0D17792B14FD28E858BC51B3F3A22"><enum>(i)</enum><text>by striking <quote>December 31, 2014</quote> and inserting <quote>December 31, 2015</quote>, and</text> </clause>
<clause commented="no" id="HA9622CAD12014C6E886CD158514FDBFD"><enum>(ii)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">2014</header-in-text></quote> in the heading and inserting <quote><header-in-text level="paragraph" style="OLC">2015</header-in-text></quote>.</text> </clause></subparagraph>
<subparagraph commented="no" id="H4471B908E8E34913BD65B062842A84EF"><enum>(B)</enum><header>Interests in partnership and s corporations</header><text>Paragraph (2) of section 1400B(g) is amended by striking <quote>December 31, 2014</quote> and inserting <quote>December 31, 2015</quote>.</text> </subparagraph></paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="HFBBAB43CAD8C479290F22EB7C965BF76"><enum>(d)</enum><header>First-Time homebuyer credit</header><text>Subsection (i) of section 1400C is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H7466EDAA9F1F4CB8B4A5E38A1C5E8355"><enum>(e)</enum><header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="H30BEA98810F64124AF4D78CF455A6E6F"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to periods after December 31, 2009.</text> </paragraph>
<paragraph id="HA14D1343AE5C4201840E86D1F3B3187E"><enum>(2)</enum><header>Tax-exempt DC empowerment zone bonds</header><text>The amendment made by subsection (b) shall apply to bonds issued after December 31, 2009.</text> </paragraph>
<paragraph id="HDA60C6DE846944398313C19B4C6C2933"><enum>(3)</enum><header>Acquisition dates for zero-percent capital gains rate</header><text>The amendments made by subsection (c)(1) shall apply to property acquired or substantially improved after December 31, 2009.</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="H6EA08B24BD534F77B80737428BD4CBB2"><enum>(4)</enum><header>First-time homebuyer credit</header><text>The amendment made by subsection (d) shall apply to property purchased after December 31, 2009.</text> </paragraph></subsection></section>
<section id="HCAAD945601594874807E8396106AB2B5"><enum>205.</enum><header>Tax incentives for New York Liberty Zone</header>
<subsection id="H8551EF080AAE40F0A397ECF5CA20B344"><enum>(a)</enum><header>Bonus depreciation for nonresidential real property and residential rental property</header><text display-inline="yes-display-inline">Subparagraph (A) of section 1400L(b)(2) is amended by striking <quote>December 31, 2009</quote> in the last sentence and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H4D4613B44F1E4124A2D513D9347E64D1"><enum>(b)</enum><header>Tax-Exempt bond financing</header><text>Subparagraph (D) of section 1400L(d)(2) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="HF62701F6874843EFB11B25C3C5C5252C"><enum>(c)</enum><header>Effective dates</header>
<paragraph id="H05B165527EEB440F8F460E8C8BE59090"><enum>(1)</enum><header>Bonus depreciation</header><text>The amendment made by subsection (a) shall apply to property placed in service after December 31, 2009.</text> </paragraph>
<paragraph id="HBA8744D3F8364DF59E38463BA143E30E"><enum>(2)</enum><header>Tax-exempt bond financing</header><text>The amendment made by subsection (b) shall apply to bonds issued after December 31, 2009.</text> </paragraph></subsection></section>
<section id="H54DE322955A94E0891477C938384CD06"><enum>206.</enum><header>Tax incentives for the Gulf Opportunity Zone</header>
<subsection id="HDC3C492491B046E08C0033AB8DA5BC07"><enum>(a)</enum><header>Work opportunity tax credit for core disaster area</header><text display-inline="yes-display-inline">Paragraph (1) of section 201(b) of the Katrina Emergency Tax Relief Act of 2005 is amended by striking <quote>4-year</quote> and inserting <quote>5-year</quote> .</text> </subsection>
<subsection id="H7D0F661B2E0C4A9698CC4FDB2A74FE5C"><enum>(b)</enum><header>Increase in rehabilitation credit</header><text>Subsection (h) of section 1400N is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H4526AB8C51044FA593FB5D0D97907F75"><enum>(c)</enum><header>Effective dates</header>
<paragraph id="H462E95D53579435DA17AE78F2423165E"><enum>(1)</enum><header>Work opportunity tax credit</header><text>The amendment made by subsection (a) shall apply to individuals hired on or after August 28, 2009.</text> </paragraph>
<paragraph id="H5421E3E6B6EC453D869B6CBEC76F625A"><enum>(2)</enum><header>Rehabilitation credit</header><text>The amendment made by subsection (b) shall apply to amounts paid or incurred after December 31, 2009.</text> </paragraph></subsection></section>
<section id="HACD3FB20451E42FCA8A1ACFF796702BF"><enum>207.</enum><header>Election for refundable low-income housing credit for 2010</header>
<subsection id="H9744F04D69DA40F087DB9E4C7930C58D"><enum>(a)</enum><header>In general</header><text>Section 42 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HA8B1DCE10BBB42E084DE35A40A875D41" style="OLC">
<subsection id="HC52BFAFC3247448ABC336B3C4A42F3BE"><enum>(n)</enum><header>Election for refundable credits</header>
<paragraph id="H2E28723567D746D1AFD548247AB46A18"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The housing credit agency of each State shall be allowed a credit in an amount equal to such State’s 2010 low-income housing refundable credit election amount which shall be payable by the Secretary as provided in paragraph (5).</text> </paragraph>
<paragraph id="H09D51ED2A6FE4CB492A713A48B2B3ACC"><enum>(2)</enum><header>2010 low-income housing refundable credit election amount</header><text>For purposes of this subsection, the term <quote>2010 low-income housing refundable credit election amount</quote> means, with respect to any State, such amount as the State may elect which does not exceed 85 percent of the product of—</text>
<subparagraph id="H9179CC67223942BDBA5071E1A7DB3A1A"><enum>(A)</enum><text>the sum of—</text>
<clause id="HCFC7B903D1A545E3B97B012FA2FDC71E"><enum>(i)</enum><text>100 percent of the State housing credit ceiling for 2010 which is attributable to amounts described in clauses (i) and (iii) of subsection (h)(3)(C), and</text> </clause>
<clause id="H39C8E0C76173417289B626DE4930914A"><enum>(ii)</enum><text>40 percent of the State housing credit ceiling for 2010 which is attributable to amounts described in clauses (ii) and (iv) of such subsection, multiplied by</text> </clause></subparagraph>
<subparagraph id="H55070D50E2B842B38641C98F97358452"><enum>(B)</enum><text>10.</text> </subparagraph></paragraph>
<paragraph id="HF3CDCC1245EE4AC0A3089E1A27D38EE9"><enum>(3)</enum><header>Coordination with non-refundable credit</header><text display-inline="yes-display-inline">For purposes of this section, the amounts described in clauses (i) through (iv) of subsection (h)(3)(C) with respect to any State for 2010 shall each be reduced by so much of such amount as is taken into account in determining the amount of the credit allowed with respect to such State under paragraph (1).</text> </paragraph>
<paragraph id="H8F39E722DF094A5DB27A409749E43B59"><enum>(4)</enum><header>Special rule for basis</header><text>Basis of a qualified low-income building shall not be reduced by the amount of any payment made under this subsection.</text> </paragraph>
<paragraph id="H1DFD1628C72645A1B55799562E06A14A"><enum>(5)</enum><header>Payment of credit; use to finance low-income buildings</header><text display-inline="yes-display-inline">The Secretary shall pay to the housing credit agency of each State an amount equal to the credit allowed under paragraph (1). Rules similar to the rules of subsections (c) and (d) of section 1602 of the American Recovery and Reinvestment Tax Act of 2009 shall apply with respect to any payment made under this paragraph, except that such subsection (d) shall be applied by substituting <quote>January 1, 2012</quote> for <quote>January 1, 2011</quote>.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H060BF0F30B8B4B96A73F94EB14767B14"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 1324(b)(2) of title 31, United States Code, is amended by inserting <quote>42(n),</quote> after <quote>36A,</quote>.</text> </subsection></section>
<enum>III</enum><header>Disaster relief provisions</header>
<section commented="no" id="H2B7010C8892E402DB097E52B83EF25E4"><enum>301.</enum><header>Deductibility of personal casualty losses attributable to federally declared disasters</header>
<subsection commented="no" id="H7CC6C25693DB45A38DB4703492CB1F31"><enum>(a)</enum><header>In general</header><text>Subclause (I) of section 165(h)(3)(B)(i) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H88B64C1CA65A47B285510D087D8A06C8"><enum>(b)</enum><header>Extension of $500 limitation</header><text>Paragraph (1) of section 165(h) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection commented="no" id="HA65319A6EFF149A6A6CE6ABE472F075B"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H37B2C96A6E88497C8B3317C0AFCBA800"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to losses attributable to disasters occurring after December 31, 2009.</text> </paragraph>
<paragraph id="H0187A1B5F61F4AF0AB9F85BBF8FCC7C8"><enum>(2)</enum><header>Extension of $500 limitation</header><text display-inline="yes-display-inline">The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2009.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H9A119C29DDE1436C801B8CFBCE92FA1D" section-type="subsequent-section"><enum>302.</enum><header>Expensing of certain qualified disaster expenses</header>
<subsection id="HF6CA55A799034345B5A04ECE3C81F15B"><enum>(a)</enum><header>In general</header><text>Subparagraph (A) of section 198A(b)(2) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="HCEDB31EE5144406E84FCA8748BE55139"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to expenditures on account of disasters occurring after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="HA2C308B5FFBB477391E547DB88E482C4" section-type="subsequent-section"><enum>303.</enum><header>5-year carryback of net operating losses attributable to Federally declared disasters</header>
<subsection id="HE00FFB9CD2D2466292B440B55E4A8D42"><enum>(a)</enum><header>In general</header><text>Subclause (I) of section 172(j)(1)(A)(i) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H64A79BE636D940B98DF8F1FA18275E5E"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to losses attributable to disasters occurring after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H3CFA7AECB5D643D8877C10CC800A3DFA" section-type="subsequent-section"><enum>304.</enum><header>Waiver of certain mortgage revenue bond requirements for residences located in Federally declared disaster areas</header>
<subsection id="H79A3B7F7A6394C57898C753FF56EBCC6"><enum>(a)</enum><header>In general</header><text>Paragraph (11) of section 143(k) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H263384171123422684BE9C15703179A9"><enum>(b)</enum><header>Special rule for residences destroyed in Federally declared disaster areas</header><text>Paragraph (13) of section 143(k), as redesignated under subsection (c), is amended by striking <quote>January 1, 2010</quote> in subparagraphs (A)(i) and (B)(i) and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H671F43C124264B1F90473232CAA5D1E8"><enum>(c)</enum><header>Technical amendment</header><text display-inline="yes-display-inline">Subsection (k) of section 143 is amended by redesignating the second paragraph (12) (relating to special rules for residences destroyed in Federally declared disasters) as paragraph (13).</text> </subsection>
<subsection id="HA7B4E9A873374859AF3548AF631CEDEC"><enum>(d)</enum><header>Effective dates</header>
<paragraph id="H74A78CFA507C42B3889C4AD6CC9E9F20"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to bonds issued after December 31, 2009.</text> </paragraph>
<paragraph id="H96ECB66CF20B4B058A31B429726440F1"><enum>(2)</enum><header>Residences destroyed in Federally declared disaster areas</header><text>The amendments made by subsection (b) shall apply with respect to disasters occurring after December 31, 2009.</text> </paragraph>
<paragraph id="HED1B34E1BDA74F5ABA4C93CF634C4F0F"><enum>(3)</enum><header>Technical amendment</header><text>The amendment made by subsection (c) shall take effect as if included in section 709 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H5B140C886A154D38B7EE7C77324194F5" section-type="subsequent-section"><enum>305.</enum><header>Expensing and special depreciation allowance for qualified disaster assistance property</header>
<subsection id="HEE2908FFDA7B472393A3351ACD89858F"><enum>(a)</enum><header>In general</header><text>Subclause (I) of section 168(n)(2)(A)(ii) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection id="H8E36B380464244268B1980627F4D0F9D"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to disasters occurring after December 31, 2009.</text> </subsection></section>
<enum>IV</enum><header>Energy provisions</header>
<section id="H74B6400E511A4ABA89598696E8713161"><enum>401.</enum><header>Incentives for biodiesel and renewable diesel</header>
<subsection id="HA9D403FEC8ED4FAA86633AFD5631BA33"><enum>(a)</enum><header>Credits for biodiesel and renewable diesel used as fuel</header><text>Subsection (g) of section 40A is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="H135787E38F224641ADD0D5516CDB9AF1"><enum>(b)</enum><header>Excise tax credits and payments for biodiesel and renewable diesel fuel mixtures</header>
<paragraph id="H860E6FBBF29745F984517FC89D339FC0"><enum>(1)</enum><text>Paragraph (6) of section 6426(c) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </paragraph>
<paragraph id="H8EFDA4BD47FB4A00BA194F611199A42E"><enum>(2)</enum><text>Subparagraph (B) of section 6427(e)(6) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H31FFF07A576946B3A803B63810C8AE28"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to sales and uses after December 31, 2009.</text> </subsection></section>
<section id="HF34BA977CD8F45E4910B906C90453CC0"><enum>402.</enum><header>Alternative motor vehicle credit for heavy hybrids</header>
<subsection id="H658CA9CE0D9642F4A9B8BF5E1AA8BC54"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (3) of section 30B(k) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>.</text> </subsection>
<subsection id="HB76DF5B53898482DA34F1BDFA204376A"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to property purchased after December 31, 2009.</text> </subsection></section>
<section id="HCF1DF15ACAB84408A2548F64C8AB2C79"><enum>403.</enum><header>Alternative fuel credit for natural gas and liquified petroleum gas</header>
<subsection id="HFCCA083E989342549C64FE00BED59654"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (5) of section 6426(d) is amended by striking <quote>after December 31, 2009</quote> and all that follows and inserting</text>
<quoted-block display-inline="yes-display-inline" id="H3B068FAD755648698D8FB2519DEC9F4D" style="OLC"> <text>after—</text>
<subparagraph id="H8570BC971C0A48EABF39CF0E91CFE474"><enum>(A)</enum><text>September 30, 2014, in the case of liquefied hydrogen,</text> </subparagraph>
<subparagraph id="H8052B75CC9744B89A6566B6DE4867495"><enum>(B)</enum><text>December 31, 2010, in the case of—</text>
<clause id="HE6E6BE2875AC4AD78E33E6683DEBBEC3"><enum>(i)</enum><text>compressed or liquified natural gas, and</text> </clause>
<clause id="H086CC9FAB40D4D969D29C43CB903CD21"><enum>(ii)</enum><text>liquified petroleum gas (other than for use as fuel in a forklift), and</text> </clause></subparagraph>
<subparagraph id="H973061209A4C4DF794DD8EF030071EA5"><enum>(C)</enum><text>December 31, 2009, in any other case.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HA6C66ED55454427195960207F9F588F8"><enum>(b)</enum><header>Payment authority</header><text>Paragraph (6) of section 6427(e) is amended by striking <quote>and</quote> at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting a comma and by adding at the end the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="H59C30BF58E2F4FA49A2C58E26B2ACD0F" style="OLC">
<subparagraph id="H40F16E76B4FD42ECA803A1177B7484C2"><enum>(E)</enum><text display-inline="yes-display-inline">any alternative fuel (as so defined) involving compressed or liquified natural gas sold or used after December 31, 2010, and</text> </subparagraph>
<subparagraph id="H064E12CB25804757BAB2751585607988"><enum>(F)</enum><text>any alternative fuel (as so defined) involving liquified petroleum gas (other than for use as fuel in a forklift) sold or used after December 31, 2010.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HA34E26DE1DE344519301B31BB2DC7E10"><enum>(c)</enum><header>Conforming amendment</header><text>Subparagraph (C) of section 6427(e)(6) is amended by inserting <quote>(E), or (F)</quote> after <quote>subparagraph (D)</quote>.</text> </subsection>
<subsection id="H36C7B932F4F248E6AEED9859C11FE49C"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to fuel sold or used after December 31, 2009.</text> </subsection></section>
<section display-inline="no-display-inline" id="H8B5444EA01344509B9D3D887762E58D7" section-type="subsequent-section"><enum>404.</enum><header>Special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities</header>
<subsection id="H445CFDB4FA5544D2AED5614D656FC13F"><enum>(a)</enum><header>In general</header><text>Paragraph (3) of section 451(i) is amended by striking <quote>January 1, 2010</quote> and inserting <quote>January 1, 2011</quote>.</text> </subsection>
<subsection commented="no" display-inline="no-display-inline" id="H1A867259A9A2417B84C766F291926302"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to dispositions after December 31, 2009.</text> </subsection></section>
<enum>V</enum><header>Foreign account tax compliance</header>
<subtitle id="H003E25E2500E4186ACF2ABEB1F2C2674"><enum>A</enum><header>Increased disclosure of beneficial owners </header>
<section id="H0992532C6CB94BB7B63977B6F79DAFEE"><enum>501.</enum><header>Reporting on certain foreign accounts</header>
<subsection id="HC196CD07087A4531901E0D73FA637E13"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Internal Revenue Code of 1986 is amended by inserting after chapter 3 the following new chapter:</text>
<quoted-block display-inline="no-display-inline" id="H678101AE04A942E997B7C3D8AAFD6809" style="OLC">
<chapter id="H388E69027CF7488CBC9C19F1DC5629AD"><enum>4</enum><header>Taxes To enforce reporting on certain foreign accounts</header>
<toc container-level="chapter-container" idref="H388E69027CF7488CBC9C19F1DC5629AD" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H03CB28179BE54381B8F6AE1B5A7CE542" level="section">Sec. 1471. Withholdable payments to foreign financial institutions.</toc-entry>
<toc-entry idref="H762856BB9DA445C9BFF3C4F1D237BD86" level="section">Sec. 1472. Withholdable payments to other foreign entities.</toc-entry>
<toc-entry idref="H24B86027916D4C4BB451DD8115EA27F5" level="section">Sec. 1473. Definitions.</toc-entry>
<toc-entry idref="H4B3CDAFD35EF4A8BB1754255177AD7E0" level="section">Sec. 1474. Special rules.</toc-entry> </toc>
<section id="H03CB28179BE54381B8F6AE1B5A7CE542"><enum>1471.</enum><header>Withholdable payments to foreign financial institutions</header>
<subsection id="H87C64E2D13164575907FD8E2E6367D2B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (b), the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.</text> </subsection>
<subsection id="H0853A8B2D2B9481B8E0517EADFCD68C4"><enum>(b)</enum><header>Reporting requirements, etc</header>
<paragraph id="H25CD838DE00A4C6CB43EC51B63C30A35"><enum>(1)</enum><header>In general</header><text>The requirements of this subsection are met with respect to any foreign financial institution if an agreement is in effect between such institution and the Secretary under which such institution agrees—</text>
<subparagraph id="H6C8566899890470FA667C026BF56DC8F"><enum>(A)</enum><text>to obtain such information regarding each holder of each account maintained by such institution as is necessary to determine which (if any) of such accounts are United States accounts,</text> </subparagraph>
<subparagraph id="HAB8AFF5E5B7945AAB55BE5F8E75706D8"><enum>(B)</enum><text>to comply with such verification and due diligence procedures as the Secretary may require with respect to the identification of United States accounts,</text> </subparagraph>
<subparagraph id="H4374920175344455A2046731CC039211"><enum>(C)</enum><text>in the case of any United States account maintained by such institution, to report on an annual basis the information described in subsection (c) with respect to such account,</text> </subparagraph>
<subparagraph id="H177CD4C74D59475A9EE507425E4DEAF1"><enum>(D)</enum><text display-inline="yes-display-inline">to deduct and withhold a tax equal to 30 percent of—</text>
<clause id="H0BBFE9CF7425466299F03A5DEFAC51B6"><enum>(i)</enum><text>any passthru payment which is made by such institution to a recalcitrant account holder or another foreign financial institution which does not meet the requirements of this subsection, and</text> </clause>
<clause id="HDA78B44BBCF44FBF8EB7A59170CA0F83"><enum>(ii)</enum><text>in the case of any passthru payment which is made by such institution to a foreign financial institution which has in effect an election under paragraph (3) with respect to such payment, so much of such payment as is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection,</text> </clause></subparagraph>
<subparagraph id="HFCC79B8FF69443ECBEBAB0A63530EC21"><enum>(E)</enum><text>to comply with requests by the Secretary for additional information with respect to any United States account maintained by such institution, and</text> </subparagraph>
<subparagraph id="H936F773F79F3404CAE5D2FD098507513"><enum>(F)</enum><text>in any case in which any foreign law would (but for a waiver described in clause (i)) prevent the reporting of any information referred to in this subsection or subsection (c) with respect to any United States account maintained by such institution—</text>
<clause id="HF03B6747F4D14095A9D17D7AC95EC65D"><enum>(i)</enum><text>to attempt to obtain a valid and effective waiver of such law from each holder of such account, and</text> </clause>
<clause id="HE0DA6EF2D6384A04B94B55D6FD54E063"><enum>(ii)</enum><text>if a waiver described in clause (i) is not obtained from each such holder within a reasonable period of time, to close such account.</text> </clause></subparagraph><continuation-text continuation-text-level="paragraph">Any agreement entered into under this subsection may be terminated by the Secretary upon a determination by the Secretary that the foreign financial institution is out of compliance with such agreement.</continuation-text></paragraph>
<paragraph display-inline="no-display-inline" id="H4362C72656B14892AA5828286E61197E"><enum>(2)</enum><header>Financial institutions deemed to meet requirements in certain cases</header><text>A foreign financial institution may be treated by the Secretary as meeting the requirements of this subsection if—</text>
<subparagraph id="H80A41FF37CFA4701BD877F6DA2C07645"><enum>(A)</enum><text>such institution—</text>
<clause id="HA1F7C03268CC410597FBEC37465FD848"><enum>(i)</enum><text>complies with such procedures as the Secretary may prescribe to ensure that such institution does not maintain United States accounts, and</text> </clause>
<clause id="H486D099DC4944C5B947A68ED3C676D2E"><enum>(ii)</enum><text>meets such other requirements as the Secretary may prescribe with respect to accounts of other foreign financial institutions maintained by such institution, or</text> </clause></subparagraph>
<subparagraph id="H7FFB3CA9A79A45F1898FC156933EC4A6"><enum>(B)</enum><text>such institution is a member of a class of institutions with respect to which the Secretary has determined that the application of this section is not necessary to carry out the purposes of this section.</text> </subparagraph></paragraph>
<paragraph id="H7C20F72E18F34531848D11AD4BCBED51"><enum>(3)</enum><header>Election to be withheld upon rather than withhold on payments to recalcitrant account holders and nonparticipating foreign financial institutions</header><text>In the case of a foreign financial institution which meets the requirements of this subsection and such other requirements as the Secretary may provide and which elects the application of this paragraph—</text>
<subparagraph id="HE2A9EAB915E24655BCEEC3436A6CD34B"><enum>(A)</enum><text>the requirements of paragraph (1)(D) shall not apply,</text> </subparagraph>
<subparagraph id="HC81484ED772A402FB9B79410CAA1AD0B"><enum>(B)</enum><text display-inline="yes-display-inline">the withholding tax imposed under subsection (a) shall apply with respect to any withholdable payment to such institution to the extent such payment is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection, and</text> </subparagraph>
<subparagraph id="HC0C67E5E6C2E422BB87E5AC6B7FDA821"><enum>(C)</enum><text>the agreement described in paragraph (1) shall—</text>
<clause id="HD0FD3A6DB97147669A9B615E3E5EA2DA"><enum>(i)</enum><text>require such institution to notify the withholding agent with respect to each such payment of the institution’s election under this paragraph and such other information as may be necessary for the withholding agent to determine the appropriate amount to deduct and withhold from such payment, and</text> </clause>
<clause id="H2E203B4A64A340479196732D674E96B9"><enum>(ii)</enum><text>include a waiver of any right under any treaty of the United States with respect to any amount deducted and withheld pursuant to an election under this paragraph.</text> </clause></subparagraph><continuation-text continuation-text-level="paragraph">To the extent provided by the Secretary, the election under this paragraph may be made with respect to certain classes or types of accounts of the foreign financial institution.</continuation-text></paragraph></subsection>
<subsection id="HCB1B3E53159F44578491E434A1AD79FA"><enum>(c)</enum><header>Information required To be reported on United States accounts</header>
<paragraph id="H4B126C63CF1D45FA912B2B15353FBB07"><enum>(1)</enum><header>In general</header><text>The agreement described in subsection (b) shall require the foreign financial institution to report the following with respect to each United States account maintained by such institution:</text>
<subparagraph id="HC5607194F7FA45B69460DF8B023190AB"><enum>(A)</enum><text>The name, address, and TIN of each account holder which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity.</text> </subparagraph>
<subparagraph id="H2641373AFE3D409E83A3A889BF03B282"><enum>(B)</enum><text>The account number.</text> </subparagraph>
<subparagraph id="HEB22B7E3F0A54D0295052573C8BC039E"><enum>(C)</enum><text>The account balance or value (determined at such time and in such manner as the Secretary may provide).</text> </subparagraph>
<subparagraph id="HEDC7744A3A4743F7A1EC62B9C53743DF"><enum>(D)</enum><text>The gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide).</text> </subparagraph></paragraph>
<paragraph id="H9CE81490A5434D0293DC90CC3B739978"><enum>(2)</enum><header>Election to be subject to same reporting as United States financial institutions</header><text>In the case of a foreign financial institution which elects the application of this paragraph—</text>
<subparagraph id="HBACFCD5519604A13B655205A8E5F6E03"><enum>(A)</enum><text>subparagraphs (C) and (D) of paragraph (1) shall not apply, and</text> </subparagraph>
<subparagraph id="H0FE3C03835ED42F5B27CB8BC3DF32D6C"><enum>(B)</enum><text>the agreement described in subsection (b) shall require such foreign financial institution to report such information with respect to each United States account maintained by such institution as such institution would be required to report under sections 6041, 6042, 6045, and 6049 if—</text>
<clause id="HCB230B517F344CF2A12FFAEC6FA331B1"><enum>(i)</enum><text>such institution were a United States person, and</text> </clause>
<clause id="HC974840F5A1048129E39C50FA9768EA4"><enum>(ii)</enum><text>each holder of such account which is a specified United States person or United States owned foreign entity were a natural person and citizen of the United States.</text> </clause><continuation-text continuation-text-level="subparagraph">An election under this paragraph shall be made at such time, in such manner, and subject to such conditions as the Secretary may provide.</continuation-text></subparagraph></paragraph>
<paragraph commented="no" id="HF2ECEAB311474D089A72F9F04C854360"><enum>(3)</enum><header>Separate requirements for qualified intermediaries</header><text>In the case of a foreign financial institution which is treated as a qualified intermediary by the Secretary for purposes of section 1441 and the regulations issued thereunder, the requirements of this section shall be in addition to any reporting or other requirements imposed by the Secretary for purposes of such treatment.</text> </paragraph></subsection>
<subsection id="H99C1B699E2834648A4CDF54216AAC1EF"><enum>(d)</enum><header>Definitions</header><text>For purposes of this section—</text>
<paragraph id="H88DDCE6DC95D4D47B7563FEC94655EF9"><enum>(1)</enum><header>United States account</header>
<subparagraph id="H5806B61D1B4142F7903AA22BA058A650"><enum>(A)</enum><header>In general</header><text>The term <quote>United States account</quote> means any financial account which is held by one or more specified United States persons or United States owned foreign entities.</text> </subparagraph>
<subparagraph id="H0F3B143233EE46D89A50E246CC4DEF20"><enum>(B)</enum><header>Exception for certain accounts held by individuals</header><text display-inline="yes-display-inline">Unless the foreign financial institution elects to not have this subparagraph apply, such term shall not include any depository account maintained by such financial institution if—</text>
<clause id="HC30D22472A934D56BDDAF312DD7DC147"><enum>(i)</enum><text>each holder of such account is a natural person, and</text> </clause>
<clause id="H9786D5CB4A084F0FA499F38EB3510C6B"><enum>(ii)</enum><text>with respect to each holder of such account, the aggregate value of all depository accounts held (in whole or in part) by such holder and maintained by the same financial institution which maintains such account does not exceed $50,000.</text> </clause><continuation-text continuation-text-level="subparagraph">To the extent provided by the Secretary, financial institutions which are members of the same expanded affiliated group shall be treated for purposes of clause (ii) as a single financial institution.</continuation-text></subparagraph>
<subparagraph id="HF3D4217AFB8D4BB7AAD309D720A4CF2E"><enum>(C)</enum><header>Elimination of duplicative reporting requirements</header><text>Such term shall not include any financial account in a foreign financial institution if—</text>
<clause id="HA8C50007E26C4B6EB9220CBFDC250DD5"><enum>(i)</enum><text>such account is held by another financial institution which meets the requirements of subsection (b), or</text> </clause>
<clause id="H7E94164321844ABDBBC1F67BF72A53D6"><enum>(ii)</enum><text>the holder of such account is otherwise subject to information reporting requirements which the Secretary determines would make the reporting required by this section with respect to United States accounts duplicative.</text> </clause></subparagraph></paragraph>
<paragraph id="H320FFBEF826745759CB5C082D1622B4D"><enum>(2)</enum><header>Financial account</header><text display-inline="yes-display-inline">The term <quote>financial account</quote> means, with respect to any financial institution—</text>
<subparagraph id="H22515D00195748C9875FF2BD1747313C"><enum>(A)</enum><text>any depository account maintained by such financial institution,</text> </subparagraph>
<subparagraph id="H91A5C272B5A84CF5A756CE91DF53EA38"><enum>(B)</enum><text>any custodial account maintained by such financial institution, and</text> </subparagraph>
<subparagraph commented="no" id="H86D09CD3B0C14B2484D6DDFA286C0CF9"><enum>(C)</enum><text>except as otherwise provided by the Secretary, any equity or debt interest in such financial institution (other than interests which are regularly traded on an established securities market).</text> </subparagraph><continuation-text continuation-text-level="paragraph">Any equity or debt interest which constitutes a financial account under subparagraph (C) with respect to any financial institution shall be treated for purposes of this section as maintained by such financial institution.</continuation-text></paragraph>
<paragraph id="H5E34654435504463B7F16AB50DC59831"><enum>(3)</enum><header>United States owned foreign entity</header><text>The term <quote>United States owned foreign entity</quote> means any foreign entity which has one or more substantial United States owners.</text> </paragraph>
<paragraph id="H981F07930E3B44A69DB323CABD2F13A0"><enum>(4)</enum><header>Foreign financial institution</header><text display-inline="yes-display-inline">The term <quote>foreign financial institution</quote> means any financial institution which is a foreign entity. Except as otherwise provided by the Secretary, such term shall not include a financial institution which is organized under the laws of any possession of the United States.</text> </paragraph>
<paragraph commented="no" id="H94F33A3EF90440048645628EAB1EF0D6"><enum>(5)</enum><header>Financial institution</header><text display-inline="yes-display-inline">Except as otherwise provided by the Secretary, the term <quote>financial institution</quote> means any entity that—</text>
<subparagraph id="H0398623D81A649BCA144B3173724874E"><enum>(A)</enum><text>accepts deposits in the ordinary course of a banking or similar business,</text> </subparagraph>
<subparagraph id="HC216A353E6354596A7AC2F9BAEA5062C"><enum>(B)</enum><text>is engaged in the business of holding financial assets for the account of others, or</text> </subparagraph>
<subparagraph id="HC3E2254BB3AE4808B8CD569D04B764B8"><enum>(C)</enum><text>is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading in securities (as defined in section 475(c)(2) without regard to the last sentence thereof), partnership interests, commodities (as defined in section 475(e)(2)), or any interest (including a futures or forward contract or option) in such securities, partnership interests, or commodities.</text> </subparagraph></paragraph>
<paragraph id="H3AA960165C77460495CF3B0F3349367B"><enum>(6)</enum><header>Recalcitrant account holder</header><text display-inline="yes-display-inline">The term <quote>recalcitrant account holder</quote> means any account holder which—</text>
<subparagraph id="H472829C568794603BA07F492FBBF9E21"><enum>(A)</enum><text>fails to comply with reasonable requests for the information referred to in subsection (b)(1)(A) or (c)(1)(A), or</text> </subparagraph>
<subparagraph id="H81B31C8B688A4CCCBC27842807661CF4"><enum>(B)</enum><text>fails to provide a waiver described in subsection (b)(1)(F) upon request.</text> </subparagraph></paragraph>
<paragraph id="H9CD086A683CC4FC7B6AF58468F45D61C"><enum>(7)</enum><header>Passthru payment</header><text>The term <quote>passthru payment</quote> means any withholdable payment or other payment which is attributable to a withholdable payment.</text> </paragraph></subsection>
<subsection id="H2DDD80A4F8E947C3A53EE8D69F60A549"><enum>(e)</enum><header>Affiliated groups</header>
<paragraph id="H0D11611640484808B1AB54373EAB153C"><enum>(1)</enum><header>In general</header><text>The requirements of subsections (b) and (c)(1) shall apply—</text>
<subparagraph id="H5177CEB628004456BD64F4407915FDB6"><enum>(A)</enum><text>with respect to United States accounts maintained by the foreign financial institution, and</text> </subparagraph>
<subparagraph id="H012DCD47799A4B038AF37921CD4818FA"><enum>(B)</enum><text>except as otherwise provided by the Secretary, with respect to United States accounts maintained by each other foreign financial institution (other than any foreign financial institution which meets the requirements of subsection (b)) which is a member of the same expanded affiliated group as such foreign financial institution.</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H3C5034D2C9A84BF8B186BEADEF4CA9F3"><enum>(2)</enum><header>Expanded affiliated group</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>expanded affiliated group</quote> means an affiliated group as defined in section 1504(a), determined—</text>
<subparagraph id="HB566BFB66AB24CEDBBE49E100BE282AB"><enum>(A)</enum><text>by substituting <quote>more than 50 percent</quote> for <quote>at least 80 percent</quote> each place it appears, and</text> </subparagraph>
<subparagraph id="H27A91C8D36AD4082AFB847F24B6B33B5"><enum>(B)</enum><text>without regard to paragraphs (2) and (3) of section 1504(b).</text> </subparagraph><continuation-text continuation-text-level="paragraph">A partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group 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></paragraph></subsection>
<subsection id="HD59CC2C6B8E945438879F4DB31CA0630"><enum>(f)</enum><header>Exception for certain payments</header><text>Subsection (a) shall not apply to any payment if the beneficial owner of such payment is—</text>
<paragraph id="H9C0D46FFFACA4911B475620059210120"><enum>(1)</enum><text display-inline="yes-display-inline">any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing,</text> </paragraph>
<paragraph id="H20B8D59CD8B244EA83C125404E8E02AB"><enum>(2)</enum><text>any international organization or any wholly owned agency or instrumentality thereof,</text> </paragraph>
<paragraph id="H40D26529028046CEB28377E2CD51B125"><enum>(3)</enum><text>any foreign central bank of issue, or</text> </paragraph>
<paragraph id="H68E01D0597C848BD99752C671EB32358"><enum>(4)</enum><text>any other class of persons identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.</text> </paragraph></subsection></section>
<section id="H762856BB9DA445C9BFF3C4F1D237BD86"><enum>1472.</enum><header>Withholdable payments to other foreign entities</header>
<subsection id="H79C5A0FC2E954C189661498539F96418"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of any withholdable payment to a non-financial foreign entity, if—</text>
<paragraph id="H9672B7E130B84F5497AAE46442ED078C"><enum>(1)</enum><text>the beneficial owner of such payment is such entity or any other non-financial foreign entity, and</text> </paragraph>
<paragraph id="HFFD23D7BFC0B4F7390B25D6C48976469"><enum>(2)</enum><text>the requirements of subsection (b) are not met with respect to such beneficial owner,</text> </paragraph><continuation-text continuation-text-level="subsection">then the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.</continuation-text></subsection>
<subsection id="H3BF9F12C6A444766A825ED0A51D174A9"><enum>(b)</enum><header>Requirements for waiver of withholding</header><text>The requirements of this subsection are met with respect to the beneficial owner of a payment if—</text>
<paragraph id="H6353B3BC44F8407681A2EB769315B614"><enum>(1)</enum><text>such beneficial owner or the payee provides the withholding agent with either—</text>
<subparagraph id="H58F17984948444ADB1C617DCB0BADA48"><enum>(A)</enum><text>a certification that such beneficial owner does not have any substantial United States owners, or</text> </subparagraph>
<subparagraph id="HE786956B3E5948CFB7220DC51AFBA35D"><enum>(B)</enum><text>the name, address, and TIN of each substantial United States owner of such beneficial owner,</text> </subparagraph></paragraph>
<paragraph id="HF72858CB44EA43CEB3765F8B829FDCD0"><enum>(2)</enum><text>the withholding agent does not know, or have reason to know, that any information provided under paragraph (1) is incorrect, and</text> </paragraph>
<paragraph id="HED27B7F3B2544B9FB12A6763AA8B6CD7"><enum>(3)</enum><text>the withholding agent reports the information provided under paragraph (1)(B) to the Secretary in such manner as the Secretary may provide.</text> </paragraph></subsection>
<subsection id="HD02FD0B5426344E99B0DE6A0F094809E"><enum>(c)</enum><header>Exceptions</header><text>Subsection (a) shall not apply to—</text>
<paragraph id="HA6B81D93AD014ABB9147067A530D3269"><enum>(1)</enum><text>except as otherwise provided by the Secretary, any payment beneficially owned by—</text>
<subparagraph id="H7B91EC8B8D6247668B0FADFDF3DAE75E"><enum>(A)</enum><text>any corporation the stock of which is regularly traded on an established securities market,</text> </subparagraph>
<subparagraph id="HFD5B469D52984115B514ECAFC1A66639"><enum>(B)</enum><text>any corporation which is a member of the same expanded affiliated group (as defined in section 1471(e)(2) without regard to the last sentence thereof) as a corporation described in subparagraph (A),</text> </subparagraph>
<subparagraph id="H8DBB21E51D984DC09B1D7CDAC70ADC0D"><enum>(C)</enum><text display-inline="yes-display-inline">any entity which is organized under the laws of a possession of the United States and which is wholly owned by one or more bona fide residents (as defined in section 937(a)) of such possession,</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H6C8EE30023A041B3A695A60554535044"><enum>(D)</enum><text display-inline="yes-display-inline">any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing,</text> </subparagraph>
<subparagraph id="H37FEA5DD5754496CB603E7B48EA74D51"><enum>(E)</enum><text>any international organization or any wholly owned agency or instrumentality thereof,</text> </subparagraph>
<subparagraph id="HF1F2AA5D8A0E4A9A80051209E220AAE7"><enum>(F)</enum><text>any foreign central bank of issue, or</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H9DD4641031974690A63D8CE45A4588F9"><enum>(G)</enum><text>any other class of persons identified by the Secretary for purposes of this subsection, and</text> </subparagraph></paragraph>
<paragraph id="H9E7E23DF628A4473A515EE1005125ADD"><enum>(2)</enum><text display-inline="yes-display-inline">any class of payments identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.</text> </paragraph></subsection>
<subsection id="H0018F8F7F0774165BD88C06F1F30AA62"><enum>(d)</enum><header>Non-Financial foreign entity</header><text>For purposes of this section, the term <quote>non-financial foreign entity</quote> means any foreign entity which is not a financial institution (as defined in section 1471(d)(5)).</text> </subsection></section>
<section id="H24B86027916D4C4BB451DD8115EA27F5"><enum>1473.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this chapter—</text>
<paragraph id="H625948865DEA4C759FB28343D9C26D1E"><enum>(1)</enum><header>Withholdable payment</header><text display-inline="yes-display-inline">Except as otherwise provided by the Secretary—</text>
<subparagraph id="HD0F263DB637D472887235802EAB843F8"><enum>(A)</enum><header>In general</header><text>The term <quote>withholdable payment</quote> means—</text>
<clause id="H892C6DED5181432F8A0C4D878930E6C8"><enum>(i)</enum><text>any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States, and</text> </clause>
<clause id="HB2B72886A71545F88F75911D64AE55A8"><enum>(ii)</enum><text>any gross proceeds from the sale or other disposition of any property of a type which can produce interest or dividends from sources within the United States.</text> </clause></subparagraph>
<subparagraph id="H495012CD77454E1B927447BA0FC21462"><enum>(B)</enum><header>Exception for income connected with United States business</header><text>Such term shall not include any item of income which is taken into account under section 871(b)(1) or 882(a)(1) for the taxable year.</text> </subparagraph>
<subparagraph commented="no" id="H7AD94A0E2F7F444DABC07B5AD8D19FF6"><enum>(C)</enum><header>Special rule for sourcing interest paid by foreign branches of domestic financial institutions</header><text>Subparagraph (B) of section 861(a)(1) shall not apply.</text> </subparagraph></paragraph>
<paragraph id="HB8197331980141DCABC9A69B86A0DA4F"><enum>(2)</enum><header>Substantial United States owner</header>
<subparagraph id="H18FFA8B4B4944791B19DFDE39345B902"><enum>(A)</enum><header>In general</header><text>The term <quote>substantial United States owner</quote> means—</text>
<clause id="H8ACFF0A4F56140069F528CD63F07AFE9"><enum>(i)</enum><text>with respect to any corporation, any specified United States person which owns, directly or indirectly, more than 10 percent of the stock of such corporation (by vote or value),</text> </clause>
<clause id="H2E8FFFFF38444423807907463C26EDAB"><enum>(ii)</enum><text>with respect to any partnership, any specified United States person which owns, directly or indirectly, more than 10 percent of the profits interests or capital interests in such partnership, and</text> </clause>
<clause commented="no" id="H49203DC13CA6460199A444D8E17C9F7B"><enum>(iii)</enum><text>in the case of a trust—</text>
<subclause id="H088E1843CD6B4DD6BD1DB32DF53FF8A1"><enum>(I)</enum><text>any specified United States person treated as an owner of any portion of such trust under subpart E of part I of subchapter J of chapter 1, and</text> </subclause>
<subclause id="HD01C81D850654A0D88B90BE29532430B"><enum>(II)</enum><text>to the extent provided by the Secretary in regulations or other guidance, any specified United States person which holds, directly or indirectly, more than 10 percent of the beneficial interests of such trust.</text> </subclause></clause></subparagraph>
<subparagraph commented="no" id="H58F5F958752448E1A224308AF541639C"><enum>(B)</enum><header>Special rule for investment vehicles</header><text display-inline="yes-display-inline">In the case of any financial institution described in section 1471(d)(5)(C), clauses (i), (ii), and (iii) of subparagraph (A) shall be applied by substituting <quote>0 percent</quote> for <quote>10 percent</quote>.</text> </subparagraph></paragraph>
<paragraph id="HB3B1F0449EE74472A3F71671F08A181F"><enum>(3)</enum><header>Specified United States person</header><text>Except as otherwise provided by the Secretary, the term <quote>specified United States person</quote> means any United States person other than—</text>
<subparagraph display-inline="no-display-inline" id="HB186D336E9164F0297A0EADD91C0A05E"><enum>(A)</enum><text>any corporation the stock of which is regularly traded on an established securities market,</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H3497A7DF2C004956B877080B827FDC07"><enum>(B)</enum><text>any corporation which is a member of the same expanded affiliated group (as defined in section 1471(e)(2) without regard to the last sentence thereof) as a corporation the stock of which is regularly traded on an established securities market,</text> </subparagraph>
<subparagraph id="H9F052792A6114A1CB15E4EDAC6546F98"><enum>(C)</enum><text display-inline="yes-display-inline">any organization exempt from taxation under section 501(a) or an individual retirement plan,</text> </subparagraph>
<subparagraph id="H928FF310CF4F43938DEE3CBBE8CB3BA6"><enum>(D)</enum><text>the United States or any wholly owned agency or instrumentality thereof,</text> </subparagraph>
<subparagraph id="HEB8DA859A3014C95A4AF61B03A3C5188"><enum>(E)</enum><text>any State, the District of Columbia, any possession of the United States, any political subdivision of any of the foregoing, or any wholly owned agency or instrumentality of any one or more of the foregoing,</text> </subparagraph>
<subparagraph id="H251BB9F1F6364B1B98A622CF72764944"><enum>(F)</enum><text>any bank (as defined in section 581),</text> </subparagraph>
<subparagraph id="HD799A05F755842AA84C03EC561E2124E"><enum>(G)</enum><text>any real estate investment trust (as defined in section 856),</text> </subparagraph>
<subparagraph id="H32940C30A3F1423D9914DF8335A0FE29"><enum>(H)</enum><text>any regulated investment company (as defined in section 851),</text> </subparagraph>
<subparagraph id="H7117BB20C63C470EBD2D07E2A2B1D9F2"><enum>(I)</enum><text>any common trust fund (as defined in section 584(a)), and</text> </subparagraph>
<subparagraph id="H255F8344ED5B45769982B76669F48176"><enum>(J)</enum><text>any trust which—</text>
<clause id="H388AB7662579491BB4BF91CDC9C13796"><enum>(i)</enum><text>is exempt from tax under section 664(c), or</text> </clause>
<clause id="H346A57E213A64B2BA70D5DC66FA0AC62"><enum>(ii)</enum><text>is described in section 4947(a)(1).</text> </clause></subparagraph></paragraph>
<paragraph id="HD2B46E741A9949C28B44E04812B3475D"><enum>(4)</enum><header>Withholding agent</header><text>The term <quote>withholding agent</quote> means all persons, in whatever capacity acting, having the control, receipt, custody, disposal, or payment of any withholdable payment.</text> </paragraph>
<paragraph id="HB7470C26A8694AE588618F9F4F5B8810"><enum>(5)</enum><header>Foreign entity</header><text>The term <quote>foreign entity</quote> means any entity which is not a United States person.</text> </paragraph></section>
<section id="H4B3CDAFD35EF4A8BB1754255177AD7E0"><enum>1474.</enum><header>Special rules</header>
<subsection id="HF0CC0879923748C7BAB8CDA2866FF83A"><enum>(a)</enum><header>Liability for withheld tax</header><text display-inline="yes-display-inline">Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.</text> </subsection>
<subsection id="H25FB6C8991134E9C974C241C896DD02C"><enum>(b)</enum><header>Credits and refunds</header>
<paragraph id="H9CFF794CC7D34F4DB64FFCD317325E0A"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the determination of whether any tax deducted and withheld under this chapter results in an overpayment by the beneficial owner of the payment to which such tax is attributable shall be made as if such tax had been deducted and withheld under subchapter A of chapter 3.</text> </paragraph>
<paragraph id="HEEF868385B82417C99A75FC4D678BBA8"><enum>(2)</enum><header>Special rule where foreign financial institution is beneficial owner of payment</header>
<subparagraph id="H1B70A2B21F0842D18A49EA644B335DAE"><enum>(A)</enum><header>In general</header><text>In the case of any tax properly deducted and withheld under section 1471 from a specified financial institution payment—</text>
<clause id="H0D69C83B00E64A0F8242530F4E591B0E"><enum>(i)</enum><text>if the foreign financial institution referred to in subparagraph (B) with respect to such payment is entitled to a reduced rate of tax with respect to such payment by reason of any treaty obligation of the United States—</text>
<subclause id="HA97C853170A34E4CB940C2638D58746B"><enum>(I)</enum><text>the amount of any credit or refund with respect to such tax shall not exceed the amount of credit or refund attributable to such reduction in rate, and</text> </subclause>
<subclause id="H05CE2F8503E94527A486347DF1555096"><enum>(II)</enum><text>no interest shall be allowed or paid with respect to such credit or refund, and</text> </subclause></clause>
<clause id="H611BE23D3B664C61BB902E02171A6630"><enum>(ii)</enum><text>if such foreign financial institution is not so entitled, no credit or refund shall be allowed or paid with respect to such tax.</text> </clause></subparagraph>
<subparagraph id="HA1AB8C89BD60493C9D4F16A7BF002930"><enum>(B)</enum><header>Specified financial institution payment</header><text>The term <quote>specified financial institution payment</quote> means any payment if the beneficial owner of such payment is a foreign financial institution.</text> </subparagraph></paragraph>
<paragraph id="H43E002A9A74647C9AF29344FCCF9D28A"><enum>(3)</enum><header>Requirement to identify substantial United States owners</header><text>No credit or refund shall be allowed or paid with respect to any tax properly deducted and withheld under this chapter unless the beneficial owner of the payment provides the Secretary such information as the Secretary may require to determine whether such beneficial owner is a United States owned foreign entity (as defined in section 1471(d)(3)) and the identity of any substantial United States owners of such entity.</text> </paragraph></subsection>
<subsection id="H4AE8CF3038E545D991C47B1716DB7C59"><enum>(c)</enum><header>Confidentiality of information</header>
<paragraph id="H2CDB0F31BC5C4F26A67A92C534C09445"><enum>(1)</enum><header>In general</header><text>For purposes of this chapter, rules similar to the rules of section 3406(f) shall apply.</text> </paragraph>
<paragraph id="H9968C7329C2440F09B2D1F556FD74C77"><enum>(2)</enum><header>Disclosure of list of participating foreign financial institutions permitted</header><text>The identity of a foreign financial institution which meets the requirements of section 1471(b) shall not be treated as return information for purposes of section 6103.</text> </paragraph></subsection>
<subsection id="H487BFB7CF8D241DE8BC0ED21EA1A576B"><enum>(d)</enum><header>Coordination with other withholding provisions</header><text>The Secretary shall provide for the coordination of this chapter with other withholding provisions under this title, including providing for the proper crediting of amounts deducted and withheld under this chapter against amounts required to be deducted and withheld under such other provisions.</text> </subsection>
<subsection id="H604DA94E845A4102B5C4F36D79BA4062"><enum>(e)</enum><header>Treatment of withholding under agreements</header><text>Any tax deducted and withheld pursuant to an agreement described in section 1471(b) shall be treated for purposes of this title as a tax deducted and withheld by a withholding agent under section 1471(a).</text> </subsection>
<subsection display-inline="no-display-inline" id="H0D20912D259148AC81729F4387A45A06"><enum>(f)</enum><header>Regulations</header><text>The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this chapter.</text> </subsection></section></chapter><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H55AB333BE1F64563866F571CBEC64451"><enum>(b)</enum><header>Special rule for interest on overpayments</header><text>Subsection (e) of section 6611 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H46FE2F88D4894727AF237B6FAABF9F39" style="OLC">
<paragraph id="H9310252454F3464A8C2E1BA448FF8AC1"><enum>(4)</enum><header>Certain withholding taxes</header><text display-inline="yes-display-inline">In the case of any overpayment resulting from tax deducted and withheld under chapter 3 or 4, paragraphs (1), (2), and (3) shall be applied by substituting <quote>180 days</quote> for <quote>45 days</quote> each place it appears.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="H4E8DA4F5F8AF416BA3D7F535A8DC770D"><enum>(c)</enum><header>Conforming amendments</header>
<paragraph id="H33886C41CB8D4EA684C99523E7B1F596"><enum>(1)</enum><text>Section 6414 is amended by inserting <quote>or 4</quote> after <quote>chapter 3</quote>.</text> </paragraph>
<paragraph id="HCDA1FA699A284581B551069C59DAF677"><enum>(2)</enum><text>Paragraph (1) of section 6501(b) is amended by inserting <quote>4,</quote> after <quote>chapter 3,</quote>.</text> </paragraph>
<paragraph id="H223F30E48BD14DDF9CC3D6847D1C1DE3"><enum>(3)</enum><text>Paragraph (2) of section 6501(b) is amended—</text>
<subparagraph id="H47AE8F29E7374840A36C3FA5F701FFB7"><enum>(A)</enum><text display-inline="yes-display-inline">by inserting <quote>4,</quote> after <quote>chapter 3,</quote> in the text thereof, and</text> </subparagraph>
<subparagraph id="HE304E088F7EE4AB997EAE4B72F706876"><enum>(B)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">taxes and tax imposed by chapter 3</header-in-text></quote> in the heading thereof and inserting <quote><header-in-text level="paragraph" style="OLC">and withholding taxes</header-in-text></quote>.</text> </subparagraph></paragraph>
<paragraph id="H48E48A37E11D4DEBA669728511D6514C"><enum>(4)</enum><text>Paragraph (3) of section 6513(b) is amended—</text>
<subparagraph id="H6FF08FC9EA39487981086C545F975F3F"><enum>(A)</enum><text>by inserting <quote>or 4</quote> after <quote>chapter 3</quote>, and</text> </subparagraph>
<subparagraph id="HC6D668F8BFB547789C2A6690BFB8994D"><enum>(B)</enum><text>by inserting <quote>or 1474(b)</quote> after <quote>section 1462</quote>.</text> </subparagraph></paragraph>
<paragraph id="H95D2712A0EFA4D2E80AEC7A431ECA396"><enum>(5)</enum><text>Subsection (c) of section 6513 is amended by inserting <quote>4,</quote> after <quote>chapter 3,</quote>.</text> </paragraph>
<paragraph id="H35E957B03F784FDE816025FD611463F8"><enum>(6)</enum><text>Paragraph (1) of section 6724(d) is amended by inserting <quote>under chapter 4 or</quote> after <quote>filed with the Secretary</quote> in the last sentence thereof.</text> </paragraph>
<paragraph id="HFE305AAC9AE04F0591B917DFA8896CB3"><enum>(7)</enum><text>Paragraph (2) of section 6724(d) is amended by inserting <quote>or 4</quote> after <quote>chapter 3</quote>.</text> </paragraph>
<paragraph id="HBB1C41F257E542C6816ED22020647C99"><enum>(8)</enum><text>The table of chapters of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H4686F97E94A94DFCAFFE689C0C803B98" style="OLC">
<toc container-level="quoted-block-container" idref="H678101AE04A942E997B7C3D8AAFD6809" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H388E69027CF7488CBC9C19F1DC5629AD" level="chapter">Chapter 4. Taxes To enforce reporting on certain foreign accounts.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H94359A05EC654F03B1CCCB678E256E61"><enum>(d)</enum><header>Effective date</header>
<paragraph id="HAC590A832AA244C2B9EE4F24145C2A22"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to payments made after December 31, 2012.</text> </paragraph>
<paragraph id="HFA4DB68CF5ED42C6B17BDDE9A4618E54"><enum>(2)</enum><header>Grandfathered treatment of outstanding obligations</header><text>The amendments made by this section shall not require any amount to be deducted or withheld from any payment under any obligation outstanding on the date which is 2 years after the date of the enactment of this Act.</text> </paragraph>
<paragraph commented="no" id="H508C4C49CA9D449B964CBBA8B90D6EAD"><enum>(3)</enum><header>Interest on overpayments</header><text>The amendment made by subsection (b) shall apply—</text>
<subparagraph id="HFC02A388DB4B4FEBA8FDACC4EE1C2EE8"><enum>(A)</enum><text>in the case of such amendment’s application to paragraph (1) of section 6611(e) of the Internal Revenue Code of 1986, to returns the due date for which (determined without regard to extensions) is after the date of the enactment of this Act,</text> </subparagraph>
<subparagraph id="H746319C19A2E4B4EAFCCD4D2CB0D1436"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of such amendment’s application to paragraph (2) of such section, to claims for credit or refund of any overpayment filed after the date of the enactment of this Act (regardless of the taxable period to which such refund relates), and</text> </subparagraph>
<subparagraph id="H143BF6427A27484CB4B527D97BB8A188"><enum>(C)</enum><text display-inline="yes-display-inline">in the case of such amendment’s application to paragraph (3) of such section, to refunds paid after the date of the enactment of this Act (regardless of the taxable period to which such refund relates).</text> </subparagraph></paragraph></subsection></section>
<section id="H3502683FF9C04A8385A83D7A4F593DDC"><enum>502.</enum><header>Repeal of certain foreign exceptions to registered bond requirements</header>
<subsection id="H9306338B0AE7402BA6C3B802DCDFC690"><enum>(a)</enum><header>Repeal of exception to denial of deduction for interest on non-Registered bonds</header>
<paragraph id="HBA31F51DCA694694AB49E0B0B1DCDAE7"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (2) of section 163(f) is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).</text> </paragraph>
<paragraph id="HEC88567B431246E19C8D71F9995067BC"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="HAB5FB136934F401EB336A87BE2062218"><enum>(A)</enum><text>Subparagraph (A) of section 163(f)(2) is amended by inserting <quote>or</quote> at the end of clause (ii), by striking <quote>, or</quote> at the end of clause (iii) and inserting a period, and by striking clause (iv).</text> </subparagraph>
<subparagraph id="H8B89D38377BC425A8B260E1C4FFF1304"><enum>(B)</enum><text>Subparagraph (B) of section 163(f)(2), as redesignated by paragraph (1), is amended—</text>
<clause id="HD2FE7C54F6514F058E3D83126F26037A"><enum>(i)</enum><text>by striking <quote>, and subparagraph (B),</quote> in the matter preceding clause (i), and</text> </clause>
<clause id="HE306425F7CDB4060A2068D76979F5CA2"><enum>(ii)</enum><text>by amending clause (i) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H39947F9505FD4517A98C3E025E1313FA" style="OLC">
<clause id="H19AA0C593902425CAB8AB70E9EC63663"><enum>(i)</enum><text display-inline="yes-display-inline">such obligation is of a type which the Secretary has determined by regulations to be used frequently in avoiding Federal taxes, and</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </clause></subparagraph>
<subparagraph id="H554DD1787E0443379EF764DE8DA83614"><enum>(C)</enum><text>Sections 165(j)(2)(A) and 1287(b)(1) are each amended by striking <quote>except that clause (iv) of subparagraph (A), and subparagraph (B), of such section shall not apply</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H4C22E7AFD3154BFFBAA177308234A97D"><enum>(b)</enum><header>Repeal of treatment as portfolio debt</header>
<paragraph id="H47185FF04FB64F49899CB8B018D912DB"><enum>(1)</enum><header>In general</header><text>Paragraph (2) of section 871(h) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H0931A17E5C9F4318BF1E7E476556C945" style="OLC">
<paragraph id="H257CA50AEDE44BD383AF4447B1D7A0CE"><enum>(2)</enum><header>Portfolio interest</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>portfolio interest</quote> means any interest (including original issue discount) which—</text>
<subparagraph id="HA63E8FA5D2694899A31298D42520D092"><enum>(A)</enum><text>would be subject to tax under subsection (a) but for this subsection, and</text> </subparagraph>
<subparagraph id="H48CA8735863E4A718B7D8254B6C8CB16"><enum>(B)</enum><text>is paid on an obligation—</text>
<clause id="H84123F6D8741473D9DD7A1CCD9BF6B77"><enum>(i)</enum><text>which is in registered form, and</text> </clause>
<clause id="H65520E548AEE443D85B39E587B225069"><enum>(ii)</enum><text display-inline="yes-display-inline">with respect to which—</text>
<subclause id="HD8A588FCDA104B5782F041A5B663E8A1"><enum>(I)</enum><text>the United States person who would otherwise be required to deduct and withhold tax from such interest under section 1441(a) receives a statement (which meets the requirements of paragraph (5)) that the beneficial owner of the obligation is not a United States person, or</text> </subclause>
<subclause id="H8ECF28E7AA324B7D8882930E3F4977F6"><enum>(II)</enum><text>the Secretary has determined that such a statement is not required in order to carry out the purposes of this subsection.</text> </subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H1F89B3A0A2A64596B10E13A87C092730"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="H7223F9C1CD594D1592186C0E687DC44E"><enum>(A)</enum><text>Section 871(h)(3)(A) is amended by striking <quote>subparagraph (A) or (B) of</quote>.</text> </subparagraph>
<subparagraph id="HB46278509A05460B9B568F45D960A163"><enum>(B)</enum><text>Paragraph (2) of section 881(c) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H5093CF4C18D64B3D840BFEA5546E8CA1" style="OLC">
<paragraph id="H99DD2CBB5C554D4E98E8A99C438B3FC7"><enum>(2)</enum><header>Portfolio interest</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>portfolio interest</quote> means any interest (including original issue discount) which—</text>
<subparagraph id="HF2CFF4D8A8C8494AAEC5E87B6E6B249F"><enum>(A)</enum><text>would be subject to tax under subsection (a) but for this subsection, and</text> </subparagraph>
<subparagraph id="H9765EB03770E4FE38E9A54A84CE4A64A"><enum>(B)</enum><text>is paid on an obligation—</text>
<clause id="HD48789F76FBB4A409739E80745630902"><enum>(i)</enum><text>which is in registered form, and</text> </clause>
<clause commented="no" id="H8A00B4EAE22842D49EB519362B33E585"><enum>(ii)</enum><text display-inline="yes-display-inline">with respect to which—</text>
<subclause commented="no" id="HA42A99A959BE4B26AB0B84C75765473B"><enum>(I)</enum><text display-inline="yes-display-inline">the person who would otherwise be required to deduct and withhold tax from such interest under section 1442(a) receives a statement which meets the requirements of section 871(h)(5) that the beneficial owner of the obligation is not a United States person, or</text> </subclause>
<subclause commented="no" id="H0BCB19D2A3A946E3B58FA8161F01C135"><enum>(II)</enum><text>the Secretary has determined that such a statement is not required in order to carry out the purposes of this subsection.</text> </subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection>
<subsection id="H672A0BA86AB645729327B038D49851ED"><enum>(c)</enum><header>Dematerialized book entry systems treated as registered form</header><text display-inline="yes-display-inline">Paragraph (3) of section 163(f) is amended by inserting <quote>, except that a dematerialized book entry system shall be treated as a book entry system described in such section</quote> before the period at the end.</text> </subsection>
<subsection id="HD75BD4A32B54419D896DF4B08DF8AC46"><enum>(d)</enum><header>Repeal of exception to requirement that Treasury obligations be in registered form</header>
<paragraph id="HC763EA4B55344DA989A96ADFA24B1AE3"><enum>(1)</enum><header>In general</header><text>Subsection (g) of section 3121 of title 31, United States Code, is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.</text> </paragraph>
<paragraph id="H0CDFEAC01A744655865B2D9DDA0BA096"><enum>(2)</enum><header>Conforming amendments</header><text>Paragraph (1) of section 3121(g) of such title is amended—</text>
<subparagraph id="H65D733B99C3744D2A42CB75BB70EF51D"><enum>(A)</enum><text>by adding <quote>or</quote> at the end of subparagraph (A),</text> </subparagraph>
<subparagraph id="H56427A94F428464B931393E068CCAA92"><enum>(B)</enum><text>by striking <quote>; or</quote> at the end of subparagraph (B) and inserting a period, and</text> </subparagraph>
<subparagraph id="H89BD18D4E73B4A5496C0518E5B469931"><enum>(C)</enum><text>by striking subparagraph (C).</text> </subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H33246AA79B974B9E9CA4CA6AFB080D7C"><enum>(e)</enum><header>Preservation of exception for excise tax purposes</header><text>Paragraph (1) of section 4701(b) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H038C2914E1884813A562AFD0A0CD3408" style="OLC">
<paragraph id="H4D06EB2E77A04C2E8505C20DCE32F482"><enum>(1)</enum><header>Registration-required obligation</header>
<subparagraph id="H358AD806E3D24FD09CCEFB8DB29918E3"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <quote>registration-required obligation</quote> has the same meaning as when used in section 163(f), except that such term shall not include any obligation which—</text>
<clause id="H1C661A87D57F4CB3AC1C502C575C04DA"><enum>(i)</enum><text>is required to be registered under section 149(a), or</text> </clause>
<clause id="HB7F6CB01F94442B69A5BFB3FE2ABC3D2"><enum>(ii)</enum><text>is described in subparagraph (B).</text> </clause></subparagraph>
<subparagraph id="HAE4BE756678C495A9B21632997D7F7B1"><enum>(B)</enum><header>Certain obligations not included</header><text>An obligation is described in this subparagraph if—</text>
<clause id="H87BACA73DFB648ED8A21671548ADB024"><enum>(i)</enum><text display-inline="yes-display-inline">there are arrangements reasonably designed to ensure that such obligation will be sold (or resold in connection with the original issue) only to a person who is not a United States person,</text> </clause>
<clause id="H7C0C4A4A07254BE9B926187B0C1EDAF0"><enum>(ii)</enum><text>interest on such obligation is payable only outside the United States and its possessions, and</text> </clause>
<clause id="H956F0EA4E1764B64A2253801CE433D52"><enum>(iii)</enum><text>on the face of such obligation there is a statement that any United States person who holds such obligation will be subject to limitations under the United States income tax laws.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H1974E936AAE943058814F33C4BF5F3FD"><enum>(f)</enum><header>Effective date</header><text>The amendments made by this section shall apply to obligations issued after the date which is 2 years after the date of the enactment of this Act.</text> </subsection></section></subtitle>
<subtitle id="HA9495B0A1F0F4B9BA0D05CB41CBC008D"><enum>B</enum><header>Under reporting with respect to foreign assets</header>
<section id="HAA90464CABE54ABCBF3A4873C053FEA2"><enum>511.</enum><header>Disclosure of information with respect to foreign financial assets</header>
<subsection id="H692D6829EB5740D0A9D9EB6AAE6C86B7"><enum>(a)</enum><header>In general</header><text>Subpart A of part III of subchapter A of chapter 61 is amended by inserting after section 6038C the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H6197468F022A42DF90742DDBEED80E42" style="OLC">
<section id="H9C5F61BD33E94493B3D1840CBF0D23AE"><enum>6038D.</enum><header>Information with respect to foreign financial assets</header>
<subsection id="HD852F199451B468F93A65C79A390AF3C"><enum>(a)</enum><header>In general</header><text>Any individual who, during any taxable year, holds any interest in a specified foreign financial asset shall attach to such person’s return of tax imposed by subtitle A for such taxable year the information described in subsection (c) with respect to each such asset if the aggregate value of all such assets exceeds $50,000 (or such higher dollar amount as the Secretary may prescribe).</text> </subsection>
<subsection id="H1B4EE289D0FC44A294AD3F966DD5311D"><enum>(b)</enum><header>Specified foreign financial assets</header><text>For purposes of this section, the term <quote>specified foreign financial asset</quote> means—</text>
<paragraph id="H5868F7ED48C144F78F8704E1998F4BAA"><enum>(1)</enum><text display-inline="yes-display-inline">any financial account (as defined in section 1471(d)(2)) maintained by a foreign financial institution (as defined in section 1471(d)(4)), and</text> </paragraph>
<paragraph id="HFA11445EAFAE4605AB296C8D96C27F10"><enum>(2)</enum><text>any of the following assets which are not held in an account maintained by a financial institution (as defined in section 1471(d)(5))—</text>
<subparagraph id="HDEEB18F1747D460F8F72834AD481EF62"><enum>(A)</enum><text>any stock or security issued by a person other than a United States person,</text> </subparagraph>
<subparagraph id="HCF22D5B5CB7E4AE4B0DD1731AE064625"><enum>(B)</enum><text display-inline="yes-display-inline">any financial instrument or contract held for investment that has an issuer or counterparty which is other than a United States person, and</text> </subparagraph>
<subparagraph id="H7444234E7D1349F89DA8C9E33EA352A6"><enum>(C)</enum><text display-inline="yes-display-inline">any interest in a foreign entity (as defined in section 1473).</text> </subparagraph></paragraph></subsection>
<subsection id="H14FD26EBC7FA48B880110158CBD20353"><enum>(c)</enum><header>Required information</header><text>The information described in this subsection with respect to any asset is:</text>
<paragraph id="HFFC64CE9793F4B6CA121A152495B66A0"><enum>(1)</enum><text>In the case of any account, the name and address of the financial institution in which such account is maintained and the number of such account.</text> </paragraph>
<paragraph id="HAADA54E74E5A465F99219D0E737A19ED"><enum>(2)</enum><text>In the case of any stock or security, the name and address of the issuer and such information as is necessary to identify the class or issue of which such stock or security is a part.</text> </paragraph>
<paragraph id="H05FB1A95821E4F71B9ACF937528D230A"><enum>(3)</enum><text>In the case of any other instrument, contract, or interest—</text>
<subparagraph id="H4DF95DD121CB4868911A633CD39EA042"><enum>(A)</enum><text>such information as is necessary to identify such instrument, contract, or interest, and</text> </subparagraph>
<subparagraph id="H8CCEC27D8A7447D7BC8A84E6F3D9BB18"><enum>(B)</enum><text>the names and addresses of all issuers and counterparties with respect to such instrument, contract, or interest.</text> </subparagraph></paragraph>
<paragraph id="H765330DAE40D4C099ADA3B13C08967B5"><enum>(4)</enum><text>The maximum value of the asset during the taxable year.</text> </paragraph></subsection>
<subsection id="H69E6A8927804460B9821267705762596"><enum>(d)</enum><header>Penalty for failure To disclose</header>
<paragraph id="HBCEC55EEB69D401397240430A2B307A7"><enum>(1)</enum><header>In general</header><text>If any individual fails to furnish the information described in subsection (c) with respect to any taxable year at the time and in the manner described in subsection (a), such person shall pay a penalty of $10,000.</text> </paragraph>
<paragraph id="H6A2AF0C9CB6F491FA79F46730EC9600E"><enum>(2)</enum><header>Increase in penalty where failure continues after notification</header><text>If any failure described in paragraph (1) continues for more than 90 days after the day on which the Secretary mails notice of such failure to the individual, such individual shall pay a penalty (in addition to the penalties under paragraph (1)) of $10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. The penalty imposed under this paragraph with respect to any failure shall not exceed $50,000.</text> </paragraph></subsection>
<subsection commented="no" id="H98EE59A493DF4E5BAC8579AEC6A66306"><enum>(e)</enum><header>Presumption that value of specified foreign financial assets exceeds dollar threshold</header><text display-inline="yes-display-inline">If—</text>
<paragraph id="H6EA0BDAB86464F1DBAD991D061E7B807"><enum>(1)</enum><text>the Secretary determines that an individual has an interest in one or more specified foreign financial assets, and</text> </paragraph>
<paragraph id="H7FA1142D69BD42539A63B4D8272CF82A"><enum>(2)</enum><text>such individual does not provide sufficient information to demonstrate the aggregate value of such assets,</text> </paragraph><continuation-text continuation-text-level="subsection">then the aggregate value of such assets shall be treated as being in excess of $50,000 (or such higher dollar amount as the Secretary prescribes for purposes of subsection (a)) for purposes of assessing the penalties imposed under this section.</continuation-text></subsection>
<subsection id="HB64DB9E0B0FB44F080C92CF225D6D884"><enum>(f)</enum><header>Application to certain entities</header><text>To the extent provided by the Secretary in regulations or other guidance, the provisions of this section shall apply to any domestic entity which is formed or availed of for purposes of holding, directly or indirectly, specified foreign financial assets, in the same manner as if such entity were an individual.</text> </subsection>
<subsection id="H177D17F2BEF94D45B98869E35A3A4E87"><enum>(g)</enum><header>Reasonable cause exception</header><text>No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.</text> </subsection>
<subsection id="HA872A18EE77547B5B5E53964D72FA900"><enum>(h)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance which provide appropriate exceptions from the application of this section in the case of—</text>
<paragraph id="HC5FA92DCC2504F06A241FB7E9A65EEEB"><enum>(1)</enum><text>classes of assets identified by the Secretary, including any assets with respect to which the Secretary determines that disclosure under this section would be duplicative of other disclosures,</text> </paragraph>
<paragraph id="HAF36F05BB4604B768FA61DD29389FA09"><enum>(2)</enum><text>nonresident aliens, and</text> </paragraph>
<paragraph id="H98A1B444EC70406EB3C54A64B3464E1D"><enum>(3)</enum><text display-inline="yes-display-inline">bona fide residents of any possession of the United States.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H4CAC82077AB743B99863EF243879AE50"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for subpart A of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6038C the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H71F29A2EF55E4812818181B840726BEF" style="OLC">
<toc container-level="quoted-block-container" idref="H6197468F022A42DF90742DDBEED80E42" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H9C5F61BD33E94493B3D1840CBF0D23AE" level="section">Sec. 6038D. Information with respect to foreign financial assets.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H4C27983C5B004618A895EDD56053A83E"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="H2585EEA13538484395E1B30ECF9B5268" section-type="subsequent-section"><enum>512.</enum><header>Penalties for underpayments attributable to undisclosed foreign financial assets</header>
<subsection id="H3E9F4CA52D3B4907A5E5001302FACE51"><enum>(a)</enum><header>In general</header><text>Section 6662 is amended—</text>
<paragraph id="HEF0D0C8C3BC6481F9539F599D37B6268"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (b), by inserting after paragraph (5) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H01E9D236C37D4B12BF1239B2D41E0295" style="OLC">
<paragraph id="HD9A49DAC4720460DBEA3C54B12B8AD6E"><enum>(6)</enum><text display-inline="yes-display-inline">Any undisclosed foreign financial asset understatement.</text> </paragraph><after-quoted-block>, and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H1086A9E7F0F744F9A8FED3825BF44D2D"><enum>(2)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H954D3B766A614AFCA0867B71BB956AAD" style="OLC">
<subsection id="HCA4F46507AC44E4182EB8AC3BA5BFF90"><enum>(i)</enum><header>Undisclosed foreign financial asset understatement</header>
<paragraph id="H0C0BC301C14D4E9E84C342EB9253B14C"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>undisclosed foreign financial asset understatement</quote> means, for any taxable year, the portion of the understatement for such taxable year which is attributable to any transaction involving an undisclosed foreign financial asset.</text> </paragraph>
<paragraph id="HF371E07EFFB34061B22AEC9A532E5F62"><enum>(2)</enum><header>Undisclosed foreign financial asset</header><text>For purposes of this subsection, the term <quote>undisclosed foreign financial asset</quote> means, with respect to any taxable year, any asset with respect to which information was required to be provided under section 6038, 6038B, 6038D, 6046A, or 6048 for such taxable year but was not provided by the taxpayer as required under the provisions of those sections.</text> </paragraph>
<paragraph id="HA895266686B24780BFF1C00A7313E76B"><enum>(3)</enum><header>Increase in penalty for undisclosed foreign financial asset understatements</header><text>In the case of any portion of an underpayment which is attributable to any undisclosed foreign financial asset understatement, subsection (a) shall be applied with respect to such portion by substituting <quote>40 percent</quote> for <quote>20 percent</quote>.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H7BCBE760AE284C84B05EDD8BF3150B51"><enum>(b)</enum><header display-inline="yes-display-inline">Effective Date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section>
<section id="H00F332B376974B9A937516E3B9C157E9"><enum>513.</enum><header>Modification of statute of limitations for significant omission of income in connection with foreign assets</header>
<subsection id="HF8E6F29459B445EFB3C91D1C4B3C31B4"><enum>(a)</enum><header>Extension of statute of limitations</header>
<paragraph id="HA32E7896795A48A39E5292C2A99BFEBF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (1) of section 6501(e) is amended by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively, and by inserting before subparagraph (B) (as so redesignated) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H3AD88BAA0AEC4FD8BB4BD330ED661435" style="OLC">
<subparagraph id="HB783F186267446F2A79BD1EE3851515F"><enum>(A)</enum><header>General rule</header><text display-inline="yes-display-inline">If the taxpayer omits from gross income an amount properly includible therein and—</text>
<clause id="HD1F15BB55CB04EF89362611B2B4E67A5"><enum>(i)</enum><text>such amount is in excess of 25 percent of the amount of gross income stated in the return, or</text> </clause>
<clause id="H1DD5FE21C9394F37A466CFCC6FC2E3A3"><enum>(ii)</enum><text>such amount—</text>
<subclause id="HD20CE2AD4D184845925EC4D648123B40"><enum>(I)</enum><text>is attributable to one or more assets with respect to which information is required to be reported under section 6038D (or would be so required if such section were applied without regard to the dollar threshold specified in subsection (a) thereof and without regard to any exceptions provided pursuant to subsection (h)(1) thereof), and</text> </subclause>
<subclause id="HF9B25977CB024D0298098A7CC51D6838"><enum>(II)</enum><text>is in excess of $5,000,</text> </subclause></clause><continuation-text continuation-text-level="subparagraph">the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time within 6 years after the return was filed.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HB2A61E5C505A452D86104B6D5A13188C"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="HA2ADD97AEDDD4AA4B7E4F7FCC67D9F3F"><enum>(A)</enum><text>Subparagraph (B) of section 6501(e)(1), as redesignated by paragraph (1), is amended by striking all that precedes clause (i) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H0298DA60EF2B41CB824E71FAE8D893EF" style="OLC">
<subparagraph id="HD92C9C2DFDB64D768FE7254964692E90"><enum>(B)</enum><header>Determination of gross income</header><text display-inline="yes-display-inline">For purposes of subparagraph (A)—</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HD28A058C13624E36ABC5E374E0CB2115"><enum>(B)</enum><text>Paragraph (2) of section 6229(c) is amended by striking <quote>which is in excess of 25 percent of the amount of gross income stated in its return</quote> and inserting <quote>and such amount is described in clause (i) or (ii) of section 6501(e)(1)(A)</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="HFD2B4E975B8E495183F7BCA9BCE06B0A"><enum>(b)</enum><header>Additional reports subject to extended period</header><text>Paragraph (8) of section 6501(c) is amended—</text>
<paragraph id="H2FFD2001FFA842339BD95780B432F73B"><enum>(1)</enum><text>by inserting <quote>pursuant to an election under section 1295(b) or</quote> before <quote>under section 6038</quote>,</text> </paragraph>
<paragraph id="H64F92BD2E4F3440C8FA88245FA4938E3"><enum>(2)</enum><text>by inserting <quote>1298(f),</quote> before <quote>6038</quote>, and</text> </paragraph>
<paragraph id="H92123C4B8CB5412C9F3EF6A9AC7118A5"><enum>(3)</enum><text>by inserting <quote>6038D,</quote> after <quote>6038B,</quote>.</text> </paragraph></subsection>
<subsection id="H0F0C48068F5847BAA9CCAE4269D0D4A9"><enum>(c)</enum><header>Clarifications related to failure To disclose foreign transfers</header><text display-inline="yes-display-inline">Paragraph (8) of section 6501(c) is amended by striking <quote>event</quote> and inserting <quote>tax return, event,</quote>.</text> </subsection>
<subsection id="H66C145A8D88B405190D9F2538FA5760D"><enum>(d)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to—</text>
<paragraph id="H6E638FB1C65D46DCA635C63114F88F0A"><enum>(1)</enum><text>returns filed after the date of the enactment of this Act; and</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="H171CB1EA0AF046209173B110ECEFC817"><enum>(2)</enum><text>returns filed on or before such date if the period specified in section 6501 of the Internal Revenue Code of 1986 (determined without regard to such amendments) for assessment of such taxes has not expired as of such date.</text> </paragraph></subsection></section></subtitle>
<subtitle id="HE1099B341B534219B9ECB484343590D6"><enum>C</enum><header>Other disclosure provisions </header>
<section id="H79BECA72B3EC46218BA9811DC94E2CCE"><enum>521.</enum><header>Reporting of activities with respect to passive foreign investment companies</header>
<subsection id="HFFC484D306FC4B819D40936AB0E190FB"><enum>(a)</enum><header>In general</header><text>Section 1298 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H0A7E8425A98443629C138DC6FCDD4CF7" style="OLC">
<subsection id="HD8674AFA2DE94013A6CF2724F9404F17"><enum>(f)</enum><header>Reporting requirement</header><text>Except as otherwise provided by the Secretary, each United States person who is a shareholder of a passive foreign investment company shall file an annual report containing such information as the Secretary may require.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE0629B1C97924CCFB09FB1BB8245E25C"><enum>(b)</enum><header>Conforming amendment</header><text>Subsection (e) of section 1291 is amended by striking <quote>, (d), and (f)</quote> and inserting <quote>and (d)</quote>.</text> </subsection>
<subsection id="H9549C759DE414DE4932A0268627C0011"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section take effect on the date of the enactment of this Act.</text> </subsection></section>
<section id="H46F01FC114AA47D391BC9ED841EFDF81"><enum>522.</enum><header>Secretary permitted to require financial institutions to file certain returns related to withholding on foreign transfers electronically</header>
<subsection id="HDE0574D66A8C4A1FAE5425945973C134"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (e) of section 6011 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HAB7BC632F0C141888A896880489DB7AD" style="OLC">
<paragraph id="HC7D6EF4563A442F08F90FD019938DF09"><enum>(3)</enum><header>Special rule for returns filed by financial institutions with respect to withholding on foreign transfers</header><text display-inline="yes-display-inline">Paragraph (2)(A) shall not apply to any return filed by a financial institution (as defined in section 1471(d)(5)) with respect to tax for which such institution is made liable under section 1461 or 1474(a).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H612CD74A5C0E49CCB13EFAB2E2A6A166"><enum>(b)</enum><header>Conforming amendment</header><text>Subsection (c) of section 6724 is amended by inserting <quote>or with respect to a return described in section 6011(e)(3)</quote>.</text> </subsection>
<subsection id="H918B61A883BA4D86B5ABA253D480246F"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply to returns the due date for which (determined without regard to extensions) is after the date of the enactment of this Act.</text> </subsection></section></subtitle>
<subtitle id="H70C1E2D1FB754918B54B859F66D43406"><enum>D</enum><header>Provisions related to foreign trusts</header>
<section id="H3D0C935A38624A13A8103746BE818EBB"><enum>531.</enum><header>Clarifications with respect to foreign trusts which are treated as having a United States beneficiary</header>
<subsection id="HBFCD91CA23954653A3EDD6E8616DD0B1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (1) of section 679(c) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H50F7A513F69B42219582CEA69669D4C8" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">For purposes of subparagraph (A), an amount shall be treated as accumulated for the benefit of a United States person even if the United States person’s interest in the trust is contingent on a future event.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE436AEC206F944AAB731A838684ED5C3"><enum>(b)</enum><header>Clarification regarding discretion To identify beneficiaries</header><text>Subsection (c) of section 679 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HE218380F4D6149C7A29CBF93FF5AA22B" style="OLC">
<paragraph id="H34989448CCA341FEA30CD0C0508AD9AD"><enum>(4)</enum><header>Special rule in case of discretion to identify beneficiaries</header><text display-inline="yes-display-inline">For purposes of paragraph (1)(A), if any person has the discretion (by authority given in the trust agreement, by power of appointment, or otherwise) of making a distribution from the trust to, or for the benefit of, any person, such trust shall be treated as having a beneficiary who is a United States person unless—</text>
<subparagraph id="H98FA49FC97A1450A86450036938DD34B"><enum>(A)</enum><text>the terms of the trust specifically identify the class of persons to whom such distributions may be made, and</text> </subparagraph>
<subparagraph id="HDA4F7CC54BD34176AE48FC4F3CF9AB81"><enum>(B)</enum><text>none of those persons are United States persons during the taxable year.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H31CBB9C9E408429F9B231366E321CFC9"><enum>(c)</enum><header>Clarification that certain agreements and understandings are terms of the trust</header><text>Subsection (c) of section 679, as amended by subsection (b), is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H8CECA43C4EC0433FA01BE6AF8254539C" style="OLC">
<paragraph commented="no" id="H73296AD6D7504770931A52F0BDE2B471"><enum>(5)</enum><header>Certain agreements and understandings treated as terms of the trust</header><text>For purposes of paragraph (1)(A), if any United States person who directly or indirectly transfers property to the trust is directly or indirectly involved in any agreement or understanding (whether written, oral, or otherwise) that may result in the income or corpus of the trust being paid or accumulated to or for the benefit of a United States person, such agreement or understanding shall be treated as a term of the trust.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HBACB885C44BC45058458FF5E23BB40D0"><enum>532.</enum><header>Presumption that foreign trust has United States beneficiary</header>
<subsection id="HF8ED79EE0CCB4895BAE468DC637AA990"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 679 is amended by redesignating subsection (d) as subsection (e) and inserting after subsection (c) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H32C936696490424698DECBD201C8B8B5" style="OLC">
<subsection id="H70E701C658034400A04DA2553BE7EF6D"><enum>(d)</enum><header>Presumption that foreign trust has United States beneficiary</header><text display-inline="yes-display-inline">If a United States person directly or indirectly transfers property to a foreign trust (other than a trust described in section 6048(a)(3)(B)(ii)), the Secretary may treat such trust as having a United States beneficiary for purposes of applying this section to such transfer unless such person—</text>
<paragraph id="HA49CACF63C1C4374A8C159445A97D9CF"><enum>(1)</enum><text>submits such information to the Secretary as the Secretary may require with respect to such transfer, and</text> </paragraph>
<paragraph id="H6174F593951941F2A74CF930DB6F9B77"><enum>(2)</enum><text>demonstrates to the satisfaction of the Secretary that such trust satisfies the requirements of subparagraphs (A) and (B) of subsection (c)(1).</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HD150071E5E8D4CCC8B7152455FC31A62"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to transfers of property after the date of the enactment of this Act.</text> </subsection></section>
<section commented="no" id="H19ADCCBC745A49369EAE347426ABA604"><enum>533.</enum><header>Uncompensated use of trust property</header>
<subsection commented="no" id="H499E2A66CD0A487BAA9911E211B9DF38"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of section 643(i) is amended—</text>
<paragraph commented="no" id="HF550BABD7AF84BA59D0E8C5C71C00462"><enum>(1)</enum><text>by striking <quote>directly or indirectly to</quote> and inserting <quote>(or permits the use of any other trust property) directly or indirectly to or by</quote>, and</text> </paragraph>
<paragraph commented="no" id="H834AB052C8204A2BAA3CF15B4B15A96D"><enum>(2)</enum><text>by inserting <quote>(or the fair market value of the use of such property)</quote> after <quote>the amount of such loan</quote>.</text> </paragraph></subsection>
<subsection id="H02428CC3D542469683BA9109467DA3FE"><enum>(b)</enum><header>Exception for compensated use</header><text>Paragraph (2) of section 643(i) is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HCDFC6E5024134CFD865FC9FAB1543CDA" style="OLC">
<subparagraph id="H918778FB9F7846A0A045C550D9948D78"><enum>(E)</enum><header>Exception for compensated use of property</header><text display-inline="yes-display-inline">In the case of the use of any trust property other than a loan of cash or marketable securities, paragraph (1) shall not apply to the extent that the trust is paid the fair market value of such use within a reasonable period of time of such use.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H457FA3549E134CAE9B0B57AE2BFB8A1F"><enum>(c)</enum><header>Application to grantor trusts</header><text>Subsection (c) of section 679, as amended by section 531, is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H6DC1931762BD40A798CFED43FFF04F24" style="OLC">
<paragraph id="H4043FD74B482485EBB20E3B54D35938C"><enum>(6)</enum><header>Uncompensated use of trust property treated as a payment</header><text display-inline="yes-display-inline">For purposes of this subsection, a loan of cash or marketable securities (or the use of any other trust property) directly or indirectly to or by any United States person (whether or not a beneficiary under the terms of the trust) shall be treated as paid or accumulated for the benefit of a United States person. The preceding sentence shall not apply to the extent that the United States person repays the loan at a market rate of interest (or pays the fair market value of the use of such property) within a reasonable period of time.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="H15BEC0D236514DB5A0937B79B3A9FC04"><enum>(d)</enum><header>Conforming amendments</header><text>Paragraph (3) of section 643(i) is amended—</text>
<paragraph commented="no" id="H2AEC1533A7804ECE81855916BDD21F95"><enum>(1)</enum><text>by inserting <quote>(or use of property)</quote> after <quote>If any loan</quote>,</text> </paragraph>
<paragraph commented="no" id="H21BC742BF01140EAB981D48335B76661"><enum>(2)</enum><text>by inserting <quote>or the return of such property</quote> before <quote>shall be disregarded</quote>, and</text> </paragraph>
<paragraph commented="no" id="H77322D42566943008374FB807AEE1360"><enum>(3)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">regarding loan principal</header-in-text></quote> in the heading thereof.</text> </paragraph></subsection>
<subsection id="HDCB139F12F544A5BADD7B8DA63720D1B"><enum>(e)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to loans made, and uses of property, after the date of the enactment of this Act.</text> </subsection></section>
<section id="H838E320ACC9C4EAAA8AB2D9B679AB8DC"><enum>534.</enum><header>Reporting requirement of United States owners of foreign trusts</header>
<subsection id="H3BF82480265E497CBF4042D7D531C221"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (1) of section 6048(b) is amended by inserting <quote>shall submit such information as the Secretary may prescribe with respect to such trust for such year and</quote> before <quote>shall be responsible to ensure</quote>.</text> </subsection>
<subsection id="HBBBD3632D15449B7BEB44125D47D60C3"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="HBA2F2E14E4484C3FA5FF544F383FA430" section-type="subsequent-section"><enum>535.</enum><header>Minimum penalty with respect to failure to report on certain foreign trusts</header>
<subsection id="H6890C97F1078444DACD29F92202CF280"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (a) of section 6677 is amended—</text>
<paragraph id="HBBDCDB8C90384487B05B642828A0B9C0"><enum>(1)</enum><text>by inserting <quote>the greater of $10,000 or</quote> before <quote>35 percent</quote>, and</text> </paragraph>
<paragraph id="H74E14847CBB7415B9768438C893D6046"><enum>(2)</enum><text>by striking the last sentence and inserting the following: <quote>At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).</quote></text> </paragraph></subsection>
<subsection id="HA2DD36382A6844488BC55ADCAE4C0860"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to notices and returns required to be filed after December 31, 2009.</text> </subsection></section></subtitle>
<subtitle id="HE400E6B192AD41FD96A19D9167E829B9"><enum>E</enum><header>Substitute dividends and dividend equivalent payments received by foreign persons treated as dividends</header>
<section display-inline="no-display-inline" id="H9DD452CAD2504B11AD184C43908D11F2" section-type="subsequent-section"><enum>541.</enum><header>Substitute dividends and dividend equivalent payments received by foreign persons treated as dividends</header>
<subsection id="HA6A335BB93E4433C870F4C0472CCFBF2"><enum>(a)</enum><header>In general</header><text>Section 871 is amended by redesignating subsection (l) as subsection (m) and by inserting after subsection (k) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H4AB58BD2126C4FD38176B5239E2E763E" style="OLC">
<subsection display-inline="no-display-inline" id="HCD77B325EABC4DCBA8B1B37C172F6FD8"><enum>(l)</enum><header>Treatment of dividend equivalent payments</header>
<paragraph id="HA67D2AE15A8042F38036DFD7093FD1D5"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of this section, sections 881 and 4948(a), and chapters 3 and 4, a dividend equivalent shall be treated as a dividend from sources within the United States.</text> </paragraph>
<paragraph id="H41A8C73BEBA441D8929ABCA6C8796192"><enum>(2)</enum><header>Dividend equivalent</header><text>For purposes of this subsection, the term <term>dividend equivalent</term> means—</text>
<subparagraph id="H2545778CAA1E4C34A81A07CA53C8DD12"><enum>(A)</enum><text display-inline="yes-display-inline">any substitute dividend,</text> </subparagraph>
<subparagraph id="H158576107D6B46CA9BB95072ECB39EF2"><enum>(B)</enum><text>any payment made pursuant to a specified notional principal contract that (directly or indirectly) is contingent upon, or determined by reference to, the payment of a dividend from sources within the United States, and</text> </subparagraph>
<subparagraph id="HCFAC23FD64EF49399F441A49247E0751"><enum>(C)</enum><text display-inline="yes-display-inline">any other payment determined by the Secretary to be substantially similar to a payment described in subparagraph (A) or (B).</text> </subparagraph></paragraph>
<paragraph id="H80A35B93ACEE42B29E66643711189DD8"><enum>(3)</enum><header>Specified notional principal contract</header><text>For purposes of this subsection, the term <quote>specified notional principal contract</quote> means—</text>
<subparagraph id="H2F271A2376194BD18E0CF96835C0AE1B"><enum>(A)</enum><text>any notional principal contract if—</text>
<clause id="H8DB1B51041C04922B8342B9BB4CC3397"><enum>(i)</enum><text>in connection with entering into such contract, any long party transfers the underlying security,</text> </clause>
<clause id="HAA6D5BD967754DAD8886375E9FB7A369"><enum>(ii)</enum><text>in connection with the termination of such contract, any short party transfers the underlying security to any long party,</text> </clause>
<clause id="H8F07E2C9600B468B998DF2BF461CE62B"><enum>(iii)</enum><text display-inline="yes-display-inline">the underlying security is not readily tradable on an established securities market,</text> </clause>
<clause commented="no" id="H2DA1CC0D876A43C481B9CFBE6CEE344D"><enum>(iv)</enum><text>in connection with entering into such contract, the underlying security is posted as collateral by any short party to the contract, or</text> </clause>
<clause id="H347AE265837E47C6AF4613018C76CEC6"><enum>(v)</enum><text>such contract is identified by the Secretary as a specified notional principal contract,</text> </clause></subparagraph>
<subparagraph id="HA8051ABBDD1B40B189B7A1ACA41073A5"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of payments made after the date which is 2 years after the date of the enactment of this subsection, any notional principal contract unless the Secretary determines that such contract is of a type which does not have the potential for tax avoidance.</text> </subparagraph></paragraph>
<paragraph id="HBF30678EFAF74EAB85A3986EC88A3906"><enum>(4)</enum><header>Definitions</header><text>For purposes of paragraph (3)(A)—</text>
<subparagraph id="H585B2D5A6B2B42F6BF549AD78E356471"><enum>(A)</enum><header>Long party</header><text display-inline="yes-display-inline">The term <quote>long party</quote> means, with respect to any underlying security of any notional principal contract, any party to the contract which is entitled to receive any payment pursuant to such contract which is contingent upon, or determined by reference to, the payment of a dividend from sources within the United States with respect to such underlying security.</text> </subparagraph>
<subparagraph id="H1AEF95F77B114F2681494A00FC20C39B"><enum>(B)</enum><header>Short party</header><text>The term <quote>short party</quote> means, with respect to any underlying security of any notional principal contract, any party to the contract which is not a long party with respect to such underlying security.</text> </subparagraph>
<subparagraph id="HFB4D04E430084332A87012F2AD2910A8"><enum>(C)</enum><header>Underlying security</header><text>The term <quote>underlying security</quote> means, with respect to any notional principal contract, the security with respect to which the dividend referred to in paragraph (2)(B) is paid. For purposes of this paragraph, any index or fixed basket of securities shall be treated as a single security.</text> </subparagraph></paragraph>
<paragraph id="H1C117BF18DF14794BEDF9360E5B91382"><enum>(5)</enum><header>Payments determined on gross basis</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>payment</quote> includes any gross amount which is used in computing any net amount which is transferred to or from the taxpayer.</text> </paragraph>
<paragraph id="H544578B623D54371936BA993535B9AE4"><enum>(6)</enum><header>Prevention of over-withholding</header><text>In the case of any chain of dividend equivalents one or more of which is subject to tax under this section or section 881, the Secretary may reduce such tax, but only to the extent that the taxpayer can establish that such tax has been paid with respect to another dividend equivalent in such chain. For purposes of this paragraph, a dividend shall be treated as a dividend equivalent.</text> </paragraph>
<paragraph id="H1AF18C17BECC47799B081396BB6AE71C"><enum>(7)</enum><header>Coordination with chapters 3 and 4</header><text>For purposes of chapters 3 and 4, each person that is a party to any contract or other arrangement that provides for the payment of a dividend equivalent shall be treated as having control of such payment.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HD8915E350B8046288ABF95E648891895"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to payments made on or after the date that is 90 days after the date of the enactment of this Act.</text> </subsection></section></subtitle>
<enum>VI</enum><header>Other revenue provisions</header>
<subtitle id="H8916E2780EC5459FAB372247F04A23F0"><enum>A</enum><header>Partnership interests held by partners providing services</header>
<section commented="no" id="H0537AA254C104E3AB08AC8F83F5EAAC1" section-type="subsequent-section"><enum>601.</enum><header>Partnership interests transferred in connection with performance of services</header>
<subsection commented="no" id="H1F86FEC6CB3344D49746817E62CD61DB"><enum>(a)</enum><header>Modification to election To include partnership interest in gross income in year of transfer</header><text display-inline="yes-display-inline">Subsection (c) of section 83 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H2567FD783643450B87A26F5587915450" style="OLC">
<paragraph id="HD0C5E1EB2E0C4235B9F48F492730BA28"><enum>(4)</enum><header>Partnership interests</header><text display-inline="yes-display-inline">Except as provided by the Secretary, in the case of any transfer of an interest in a partnership in connection with the provision of services to (or for the benefit of) such partnership—</text>
<subparagraph id="H836532549902493AB39ED16BDC0F5E19"><enum>(A)</enum><text display-inline="yes-display-inline">the fair market value of such interest shall be treated for purposes of this section as being equal to the amount of the distribution which the partner would receive if the partnership sold (at the time of the transfer) all of its assets at fair market value and distributed the proceeds of such sale (reduced by the liabilities of the partnership) to its partners in liquidation of the partnership, and</text> </subparagraph>
<subparagraph id="H14F2B2E8F69F4DD599DAB88277EFC95B"><enum>(B)</enum><text>the person receiving such interest shall be treated as having made the election under subsection (b)(1) unless such person makes an election under this paragraph to have such subsection not apply.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HEF35B8DA51634E6A8DCEF14873593709"><enum>(b)</enum><header>Conforming amendment</header><text>Paragraph (2) of section 83(b) is amended by inserting <quote>or subsection (c)(4)(B)</quote> after <quote>paragraph (1)</quote> .</text> </subsection>
<subsection id="H4C3F6C85BE1A42B2B5CC8606EAC34192"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to interests in partnerships transferred after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="HA7015A6B256543FFB118C5B15CD7CE97" section-type="subsequent-section"><enum>602.</enum><header>Income of partners for performing investment management services treated as ordinary income received for performance of services</header>
<subsection id="H4858D39C83714CCB99CB1D31FA615333"><enum>(a)</enum><header>In general</header><text>Part I of subchapter K of chapter 1 is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="HD523595E6BC547828A849FB874C005CC" style="OLC">
<section id="H9FB5192BB4F24A9FBE3F69F0E01FE0D8"><enum>710.</enum><header>Special rules for partners providing investment management services to partnership</header>
<subsection id="H377D606AAA6241708FD8142D389FD085"><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="HDADC3A4F2B914EAA82DF46B09DB1C326"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 702(b)—</text>
<subparagraph id="H754914E67FA44455AC7B671EE8A06F89"><enum>(A)</enum><text>any net income with respect to such interest for any partnership taxable year shall be treated as ordinary income, and</text> </subparagraph>
<subparagraph id="HDD24CE303B944970A6F3578FC282552A"><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="HB98FAC62D1EE4B51840957A55C5612D4"><enum>(2)</enum><header>Treatment of losses</header>
<subparagraph id="H1D804388534F487D8178BB50CD5636A6"><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="H97F2038EC2C5461A8561CD894F85D14F"><enum>(i)</enum><text>the aggregate net income with respect to such interest for all prior partnership taxable years, over</text> </clause>
<clause id="HABDCFE8F09434BB1B8D4DD661B4CAB69"><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="H3D4DA83D4B1249D1BD7C4F6510D974C0"><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="HDCBFDD17ED95405A926B2A3A4490AA75"><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="HC10D3ACCCCB34E5C80F12F0CE1A1F353"><enum>(D)</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="H2A96E0F981AA43BCA97452563CF7BD4C"><enum>(3)</enum><header>Net income and loss</header><text>For purposes of this section—</text>
<subparagraph id="H63642606A5C34C369394E14C1EC779CF"><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="H373972B521CC451982619F005D2E7BF5"><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="HB585C50872D6404EB5F23EED40BC9426"><enum>(ii)</enum><text>all items of deduction and loss so taken into account.</text> </clause></subparagraph>
<subparagraph id="H782904F32A30493B81218EC7BF14B98E"><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="H88EF129B44C54371BBA8CE6F248F95BF"><enum>(b)</enum><header>Dispositions of partnership interests</header>
<paragraph id="HF2193C00DD544466884C4CB35AB77696"><enum>(1)</enum><header>Gain</header><text>Any gain on the disposition of an investment services partnership interest shall be treated as ordinary income and shall be recognized notwithstanding any other provision of this subtitle.</text> </paragraph>
<paragraph id="H1B4935CB2B62499DA5F8B5C7435C0E6D"><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="H625DDC47BE1B4BA78F36F4E8E206573E"><enum>(A)</enum><text>the aggregate net income with respect to such interest for all partnership taxable years, over</text> </subparagraph>
<subparagraph id="HBA5A31F7D1A744FAB96B5155F49F4911"><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="HECE59014ACAD4767AC9084E032D84A28"><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="HC0BF0BCE71AE4D6C8C9BEF071E10B7F6"><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="HC12AC48C515649F5BBD005C6923CF196"><enum>(A)</enum><text>the excess (if any) of—</text>
<clause commented="no" id="HCC38A12AE79647D69EF7EAB5FB75A462"><enum>(i)</enum><text>the fair market value of such property at the time of such distribution, over</text> </clause>
<clause commented="no" id="H374B5AE60D2B412490F5378D385BC9D9"><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="H3FE9E2EF5EB04C0B97524806A0FE2C53"><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="HCE65F184903840B994C5F0CD58A2218B"><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="H34E2001979E94777932D002DAF75E6A0"><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="HFD838F6CC1ED416CB80CFAD6EDC3DF1E"><enum>(c)</enum><header>Investment services partnership interest</header><text display-inline="yes-display-inline">For purposes of this section—</text>
<paragraph id="HCC5F17F8CD5747F7A93C55C1C8D3E160"><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 (directly or indirectly) by any person if it was reasonably expected (at the time that such person acquired such interest) that such person (or any person related to such person) would provide (directly or indirectly) a substantial quantity of any of the following services with respect to assets held (directly or indirectly) by the partnership:</text>
<subparagraph id="HBCA4DC44BA2D4AEEBD59FC5E97426225"><enum>(A)</enum><text>Advising as to the advisability of investing in, purchasing, or selling any specified asset.</text> </subparagraph>
<subparagraph id="H9A5A09CC96974430BCE1F03115516D40"><enum>(B)</enum><text>Managing, acquiring, or disposing of any specified asset.</text> </subparagraph>
<subparagraph id="HCE03C01700344206841CB0F14193AE5F"><enum>(C)</enum><text>Arranging financing with respect to acquiring specified assets.</text> </subparagraph>
<subparagraph id="HA5DF9A84F16148A488B14CE317C4ED43"><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 held for rental or investment, interests in partnerships, commodities (as defined in section 475(e)(2)), or options or derivative contracts with respect to any of the foregoing.</continuation-text></paragraph>
<paragraph id="HAF11A3F75A404CA280F15E0C0A9646BF"><enum>(2)</enum><header>Exception for certain capital interests</header>
<subparagraph id="HB6FCFEDC29524CB2B3AE9B6D5965AFC5"><enum>(A)</enum><header>In general</header><text>In the case of any portion of an investment services partnership interest which is a qualified capital interest, all items of income, gain, loss, and deduction which are allocated to such qualified capital interest shall not be taken into account under subsection (a) if—</text>
<clause id="H9BC6D97087D743E4AD4BCEBD361F7086"><enum>(i)</enum><text>allocations of items are made by the partnership to such qualified capital interest in the same manner as such allocations are made to other qualified capital interests held by partners who do not provide any services described in paragraph (1) and who are not related to the partner holding the qualified capital interest, and</text> </clause>
<clause id="HD469A7E50DF04F9FAA08BA250D28FC08"><enum>(ii)</enum><text>the allocations made to such other interests are significant compared to the allocations made to such qualified capital interest.</text> </clause></subparagraph>
<subparagraph id="H78D085E7616A445CB7E6FADF1C0724AA"><enum>(B)</enum><header>Special rule for no or insignificant allocations to nonservice providers</header><text>To the extent provided by the Secretary in regulations or other guidance, in any case in which the requirements of subparagraph (A)(ii) are not satisfied, items of income, gain, loss, and deduction shall not be taken into account under subsection (a) to the extent that such items are properly allocable under such regulations or other guidance to qualified capital interests.</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="HD7FE54568702451DA6C0737E7F70553D"><enum>(C)</enum><header>Special rule for dispositions</header><text display-inline="yes-display-inline">In the case of any investment services partnership interest any portion of which is a qualified capital interest, subsection (b) shall not apply to so much of any gain or loss as bears the same proportion to the entire amount of such gain or loss as—</text>
<clause id="H65334EC755834A73A10603884E184D59"><enum>(i)</enum><text display-inline="yes-display-inline">the distributive share of gain or loss that would have been allocable to the qualified capital interest under subparagraph (A) if the partnership sold all of its assets immediately before the disposition, bears to</text> </clause>
<clause id="HD462F7D346D24AA8827395727E0CD45C"><enum>(ii)</enum><text>the distributive share of gain or loss that would have been so allocable to the investment services partnership interest of which such qualified capital interest is a part.</text> </clause></subparagraph>
<subparagraph commented="no" display-inline="no-display-inline" id="H1EE62D96AC9E4081BBE60AD333148B3E"><enum>(D)</enum><header>Qualified capital interest</header><text>For purposes of this paragraph, the term <term>qualified capital interest</term> means so much of a partner’s interest in the capital of the partnership as is attributable to—</text>
<clause commented="no" id="HABDF2FA359FB4ACCB7442567846C417D"><enum>(i)</enum><text>the fair market value of any money or other property contributed to the partnership in exchange for such interest (determined without regard to section 752(a)) ,</text> </clause>
<clause commented="no" id="H70C1208C10AA4B87B839AF3E76ED5751"><enum>(ii)</enum><text>any amounts which have been included in gross income under section 83 with respect to the transfer of such interest, and</text> </clause>
<clause commented="no" id="HD30BD0DA87FF4A46AE31A0E519998189"><enum>(iii)</enum><text>the excess (if any) of—</text>
<subclause id="HDA02777FDC2C4FD0B4D905FD9732DE61"><enum>(I)</enum><text>any items of income and gain taken into account under section 702 with respect to such interest for taxable years to which this section applies, over</text> </subclause>
<subclause id="H66205D8B19D3431DA0DFC35964F10603"><enum>(II)</enum><text>any items of deduction and loss so taken into account.</text> </subclause></clause><continuation-text commented="no" continuation-text-level="subparagraph">The qualified capital interest shall be reduced by distributions from the partnership with respect to such interest for taxable years to which this section applies and by the excess (if any) of the amount described in clause (iii)(II) over the amount described in clause (iii)(I).</continuation-text></subparagraph>
<subparagraph id="H4C0D23C5F76D4B7F8DDBBD5BBFE5B3EF"><enum>(E)</enum><header>Treatment of certain loans</header>
<clause id="HA4E8C4A056ED43529BB2E988A86886E8"><enum>(i)</enum><header>Proceeds of partnership loans not treated as qualified capital interest of service providing partners</header><text>For purposes of this paragraph, an investment services partnership interest shall not be treated as a qualified capital interest to the extent that such interest is acquired in connection with the proceeds of any loan or other advance made or guaranteed, directly or indirectly, by any other partner or the partnership (or any person related to any such other partner or the partnership).</text> </clause>
<clause id="H18CCBF3B2D994250B1FBB56C5855B643"><enum>(ii)</enum><header>Reduction in allocations to qualified capital interests for loans from nonservice providing partners to the partnership</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 described in paragraph (1) to the partnership (or any person related to such partner) shall be taken into account in determining the qualified capital interests of the partners in the partnership.</text> </clause></subparagraph></paragraph>
<paragraph id="H8B650BAF67774699968FCE131C7D808F"><enum>(3)</enum><header>Related persons</header><text display-inline="yes-display-inline">A person shall be treated as related to another person if the relationship between such persons would result in a disallowance of losses under section 267 or 707(b).</text> </paragraph></subsection>
<subsection id="H1E6C42C8A44C43069775FC7836A7F168"><enum>(d)</enum><header>Other income and gain in connection with investment management services</header>
<paragraph id="HF93F4F295C9544208F5F64B7D288FC0F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">If—</text>
<subparagraph id="H9E39630493654614885F19945C8867C3"><enum>(A)</enum><text>a person performs (directly or indirectly) investment management services for any entity,</text> </subparagraph>
<subparagraph id="HE1207F44B49A4BBDAB465360B57D6635"><enum>(B)</enum><text>such person holds (directly or indirectly) a disqualified interest with respect to such entity, and</text> </subparagraph>
<subparagraph id="H6DBB89BD1FE34B8998B4CD9813F7D053"><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. Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.</continuation-text></paragraph>
<paragraph id="HC42643EF82F1433F9F8EC4EF797CF63F"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="HB8B0629945034F149DD4E9472E8A9B9A"><enum>(A)</enum><header>Disqualified interest</header>
<clause id="HC9E1B2942F3A4F3BA3617EBCA885101A"><enum>(i)</enum><header>In general</header><text>The term <term>disqualified interest</term> means, with respect to any entity—</text>
<subclause id="HCF65DDD0D3924333A7BD0EF7C84FFDDE"><enum>(I)</enum><text>any interest in such entity other than indebtedness,</text> </subclause>
<subclause id="HD7D37B8F347D48608090D00E960D9B87"><enum>(II)</enum><text>convertible or contingent debt of such entity,</text> </subclause>
<subclause id="H27114DC2560E44BCB0A9EFB076D3EECC"><enum>(III)</enum><text>any option or other right to acquire property described in subclause (I) or (II), and</text> </subclause>
<subclause id="H88F6DE8382FB4CF5A7BA89E23EE0B57C"><enum>(IV)</enum><text>any derivative instrument entered into (directly or indirectly) with such entity or any investor in such entity.</text> </subclause></clause>
<clause id="H8C2C0BD8878F4E4686B0FAEE20AD8B24"><enum>(ii)</enum><header>Exceptions</header><text>Such term shall not include—</text>
<subclause id="HB581A688579348A28618747C0DC3AEE2"><enum>(I)</enum><text>a partnership interest,</text> </subclause>
<subclause id="H5CD0C75A12534CC0A7FBDB115AA8D5F7"><enum>(II)</enum><text>except as provided by the Secretary, any interest in a taxable corporation, and</text> </subclause>
<subclause id="H1EC250D606164485BB791D1875F556D2"><enum>(III)</enum><text>except as provided by the Secretary, stock in an S corporation.</text> </subclause></clause></subparagraph>
<subparagraph id="H3861E150F605483AB0BA1D58BDC3EA73"><enum>(B)</enum><header>Taxable corporation</header><text>The term <term>taxable corporation</term> means—</text>
<clause id="H3F3FCFA2A1894CE9B562E9CD2587A729"><enum>(i)</enum><text>a domestic C corporation, or</text> </clause>
<clause id="HBE5F198CB95F4585B635E72D0737E193"><enum>(ii)</enum><text>a foreign corporation substantially all of the income of which is—</text>
<subclause id="H61FD7B1E8DE44A7D9557E647FF408C45"><enum>(I)</enum><text>effectively connected with the conduct of a trade or business in the United States, or</text> </subclause>
<subclause id="HD063ABAC7913471B8F2076D1C50EE68A"><enum>(II)</enum><text>subject to a comprehensive foreign income tax (as defined in section 457A(d)(2)).</text> </subclause></clause></subparagraph>
<subparagraph id="HEA285B8F99924E62883DC0172BBBBBF1"><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).</text> </subparagraph></paragraph></subsection>
<subsection commented="no" id="H55F0DDD14C0E4FF884B24F62BE6F9D7C"><enum>(e)</enum><header>Regulations</header><text>The Secretary shall prescribe such regulations or other guidance as is necessary or appropriate to carry out the purposes of this section, including regulations or other guidance to—</text>
<paragraph commented="no" id="H017357DE80514467B09C1DD9AAAA1A0D"><enum>(1)</enum><text>provide modifications to the application of this section (including treating related persons as not related to one another) to the extent such modification is consistent with the purposes of this section,</text> </paragraph>
<paragraph id="H731968AA4C12415BB6A887C22E56A799"><enum>(2)</enum><text>prevent the avoidance of the purposes of this section, and</text> </paragraph>
<paragraph commented="no" id="HBEB581BC96264D39A265DB6DE3A8BB8E"><enum>(3)</enum><text>coordinate this section with the other provisions of this title.</text> </paragraph></subsection>
<subsection commented="no" id="HE8A15EE5EECF47F19F9C7A3587BA86A9"><enum>(f)</enum><header>Cross reference</header><text>For 40 percent 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="H3A817FCC1B2B413985D644436F0E515F"><enum>(b)</enum><header>Income from investment services partnership interests not treated as qualifying income of publicly traded partnerships</header><text>Subsection (d) of section 7704 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HD77A73C7DAD34BAB825A8EADDEC691B1" style="OLC">
<paragraph id="H4B7FC6E5A05F45EFBF79C74A559F0CE3"><enum>(6)</enum><header>Income from investment services partnership interests not qualified</header>
<subparagraph id="H05D43233D8DD43B7975F08489B1A8009"><enum>(A)</enum><header>In general</header><text>Items of income and gain shall not be treated as qualifying income if such items are treated as ordinary income by reason of the application of section 710 (relating to special rules for partners providing investment management services to partnership).</text> </subparagraph>
<subparagraph id="H0605020C19ED404E9FA7EBD3D7C195B6"><enum>(B)</enum><header>Special rules for certain partnerships</header>
<clause id="H5299F60E332B49819D514AD3A13C9B47"><enum>(i)</enum><header>Certain partnerships owned by real estate investment trusts</header><text>Subparagraph (A) shall not apply in the case of a partnership which meets each of the following requirements:</text>
<subclause id="H5054611B44C04562A730C4B88A70FA77"><enum>(I)</enum><text>Such partnership is treated as publicly traded under this section solely by reason of interests in such partnership being convertible into interests in a real estate investment trust which is publicly traded.</text> </subclause>
<subclause id="HE2EA4C8AEA15416A902C28B8E2A8159D"><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> </subclause>
<subclause id="H4B0C8CE5CCAE4D79BBBEE9A4333C8D30"><enum>(III)</enum><text>Such partnership meets the requirements of paragraphs (2), (3), and (4) of section 856(c).</text> </subclause></clause>
<clause id="HF00CB609E4FB4D37BE05036AF4D686EB"><enum>(ii)</enum><header>Certain partnerships owning other publicly traded partnerships</header><text>Subparagraph (A) shall not apply in the case of a partnership which meets each of the following requirements:</text>
<subclause id="H48451ADF69AB43FEA1DFF7B67879F85B"><enum>(I)</enum><text>Substantially all of the assets of such partnership consist of interests in one or more publicly traded partnerships (determined without regard to subsection (b)(2)).</text> </subclause>
<subclause commented="no" id="H25CACBA695AF476FB3BC6ED7379ED65E"><enum>(II)</enum><text>Substantially all of the income of such partnership is ordinary income or section 1231 gain (as defined in section 1231(a)(3)).</text> </subclause></clause></subparagraph>
<subparagraph id="HFDD6B09D39CD49B3844FCCE523E2C3C3"><enum>(C)</enum><header>Transitional rule</header><text>In the case of a partnership which is a publicly traded partnership on the date of the enactment of this paragraph, subparagraph (A) shall not apply to any taxable year of the partnership beginning before the date which is 10 years after the date of the enactment of this paragraph.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H8B682F9D9D9047318E6E13ABA90D41BB"><enum>(c)</enum><header>Imposition of penalty on underpayments</header>
<paragraph id="HFF0CBF6925544C13A35CA2F319A551AE"><enum>(1)</enum><header>In general</header><text>Subsection (b) of section 6662, as amended by section 512, is amended by inserting after paragraph (6) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H7BB4017AA44D42AC98A1F1E7902E5CF9" style="OLC">
<paragraph id="HEE660AFB7C1B453E9FF6DC2C2EB3237D"><enum>(7)</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="HF385B84B18F14EA4A23204924196F568"><enum>(2)</enum><header>Amount of penalty</header>
<subparagraph id="H677D0349983142C3972901123D6AB154"><enum>(A)</enum><header>In general</header><text>Section 6662, as amended by section 512, is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HEBAA310C27D24720BCDC22AC8DC9AC8C" style="OLC">
<subsection id="H4077D7F9D9DB4D158142B636D622FE4F"><enum>(j)</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)(7), 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="HD9E3CCF4A100415BA334193A227247F1"><enum>(B)</enum><header>Conforming amendments</header><text>Subparagraph (B) of section 6662A(e)(2) is amended—</text>
<clause id="HED778750D90E4BADA415A4E6DC14DA58"><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="H3D7E40322655432FA2E00D66CAA811A3"><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="H9D6C79037F254011B28A643E304B68AA"><enum>(3)</enum><header>Special rules for application of reasonable cause exception</header><text>Subsection (c) of section 6664 is amended—</text>
<subparagraph id="HEFE30AAEF99B452790AD7418601C0703"><enum>(A)</enum><text>by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively,</text> </subparagraph>
<subparagraph id="H42CF94FFCAC140CEBA6E196AFED9B43D"><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="HE8C08A23018541C59A02E9F4FAF7F8E5"><enum>(C)</enum><text>by inserting after paragraph (1) the following new paragraph:</text>
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<paragraph id="HE3D4D17F14F0471FA9EFAB0080C255D3"><enum>(2)</enum><header>Special rule for underpayments attributable to investment management services</header>
<subparagraph id="HE7D21B5E68F445AAB5FF5AB653C9E723"><enum>(A)</enum><header>In general</header><text>Paragraph (1) shall not apply to any portion of an underpayment to which this section applies by reason of subsection (b)(7) unless—</text>
<clause id="HE5BD5BF40997486C942C2A4EEBA5F4B0"><enum>(i)</enum><text display-inline="yes-display-inline">the relevant facts affecting the tax treatment of the item are adequately disclosed,</text> </clause>
<clause id="HB06F40521A2542EE90FC1B3975BBCCFA"><enum>(ii)</enum><text>there is or was substantial authority for such treatment, and</text> </clause>
<clause id="H3C27CE73E7B6451FA8879D3006CCDCC0"><enum>(iii)</enum><text>the taxpayer reasonably believed that such treatment was more likely than not the proper treatment.</text> </clause></subparagraph>
<subparagraph id="H8AC7ACC09BA248B6AAC0FC8595A4758D"><enum>(B)</enum><header>Rules relating to reasonable belief</header><text>Rules similar to the rules of subsection (d)(3) shall apply for purposes of subparagraph (A)(iii).</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection>
<subsection id="H2CC991B7562F41E5B25911B5F1C358BA"><enum>(d)</enum><header>Income and loss from investment services partnership interests taken into account in determining net earnings from self-Employment</header>
<paragraph id="H5BF1BC65A24B44519DB768B2CCA82CCD"><enum>(1)</enum><header>Internal Revenue Code</header><text>Section 1402(a) is amended by striking <quote>and</quote> at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting <quote>; and</quote>, and by inserting after paragraph (17) the following new paragraph:</text>
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<paragraph id="H710AC0A7DB2F4BEFA7BC883616FE703E"><enum>(18)</enum><text display-inline="yes-display-inline">notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or business of providing services described in section 710(c)(1) with respect to any entity, any amount treated as ordinary income or ordinary loss of such individual under section 710 with respect to such entity shall be taken into account in determining the net earnings from self-employment of such individual.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph display-inline="no-display-inline" id="HECDA724492004F70B2AE1A222F43F055"><enum>(2)</enum><header>Social Security Act</header><text>Section 211(a) of the Social Security Act is amended by inserting after paragraph (16) the following new paragraph:</text>
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<paragraph id="HDF5F57AA58264052A4255CAECA40C830"><enum>(17)</enum><text display-inline="yes-display-inline">Notwithstanding the preceding provisions of this subsection, in the case of any individual engaged in the trade or business of providing services described in section 710(c)(1) of the Internal Revenue Code of 1986 with respect to any entity, any amount treated as ordinary income or ordinary loss of such individual under section 710 of such Code with respect to such entity shall be taken into account in determining the net earnings from self-employment of such individual.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H5434DCC74C8F484686DDF19FD03F543B"><enum>(e)</enum><header>Conforming amendments</header>
<paragraph id="H7E6A35DD5EC9492D947C147DA4C315D2"><enum>(1)</enum><text>Subsection (d) of section 731 is amended by inserting <quote>section 710(b)(4) (relating to distributions of partnership property),</quote> after <quote>to the extent otherwise provided by</quote>.</text> </paragraph>
<paragraph id="H7AD917FE799A46C2BBD110ACDCA2C977"><enum>(2)</enum><text>Section 741 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="H50A6F1AFB04C4773A5781322F7537C4E"><enum>(3)</enum><text display-inline="yes-display-inline">The table of sections for part I of subchapter K of chapter 1 is amended by adding at the end the following new item:</text>
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<toc container-level="quoted-block-container" idref="HD523595E6BC547828A849FB874C005CC" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H9FB5192BB4F24A9FBE3F69F0E01FE0D8" 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="HA016E5FC034E4F0E847A50AC11A7CDBB"><enum>(f)</enum><header>Effective date</header>
<paragraph id="HB5FA9F022AB2403A9EC00B5E97B50B55"><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 December 31, 2009.</text> </paragraph>
<paragraph id="H1F23ED72B440489E87B3492B1539D46B"><enum>(2)</enum><header>Partnership taxable years which include effective date</header><text display-inline="yes-display-inline">In applying section 710(a) of the Internal Revenue Code of 1986 (as added by this section) in the case of any partnership taxable year which includes December 31, 2009, 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="H87658D8FF7214C059E1BDA67688F9CD4"><enum>(3)</enum><header>Dispositions of partnership interests</header><text display-inline="yes-display-inline">Section 710(b) of the Internal Revenue Code of 1986 (as added by this section) shall apply to dispositions and distributions after December 31, 2009.</text> </paragraph>
<paragraph id="H9A8EFE01696D4E9DAB4D70B93A8DACA6"><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 January 1, 2010.</text> </paragraph>
<paragraph id="H2A0F28300D75433096672B49FE0F9149"><enum>(5)</enum><header>Publicly traded partnerships</header><text display-inline="yes-display-inline">The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2009.</text> </paragraph></subsection></section></subtitle>
<subtitle id="HB4530AB8651E4F72A24BCB57496AC9D8"><enum>B</enum><header>Time for payment of corporate estimated taxes</header>
<section id="H3DF30E206ECC4EFFBE8294B860AC5E5C"><enum>611.</enum><header>Time for payment of corporate estimated taxes</header><text display-inline="no-display-inline">The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 in effect on the date of the enactment of this Act is increased by 26.5 percentage points.</text> </section></subtitle>
<subtitle id="H4C742A5E945042FE99A2CE163084F5C8"><enum>C</enum><header>Tax Expenditure Study</header>
<section id="H05FC8F44C0424A73B3DD765DE6F22743"><enum>621.</enum><header>Findings</header><text display-inline="no-display-inline">Congress finds the following:</text>
<paragraph id="HDDF1CE16DB054EEBA6B0F0F5D03ECD92"><enum>(1)</enum><text display-inline="yes-display-inline">Currently, the aggregate cost of Federal tax expenditures rivals, or even exceeds, the amount of total Federal discretionary spending.</text> </paragraph>
<paragraph id="HE13D72AED6B446A0B7059D1828B4322B"><enum>(2)</enum><text display-inline="yes-display-inline">Given the escalating public debt, a critical examination of this use of taxpayer dollars is essential.</text> </paragraph>
<paragraph id="H37EEF78ABDA047B4B64D1D35C4BA2671"><enum>(3)</enum><text display-inline="yes-display-inline">Additionally, tax expenditures can complicate the Internal Revenue Code of 1986 for taxpayers and complicate tax administration for the Internal Revenue Service.</text> </paragraph>
<paragraph id="H011D34620BC446FDBE6EA6899ED67765"><enum>(4)</enum><text display-inline="yes-display-inline">To facilitate a better understanding of tax expenditures in the future, it is constructive for legislation extending these provisions to include a study of such provisions. </text> </paragraph></section>
<section id="HAE14298DF1D941EBA0CB474FEAB37A86"><enum>622.</enum><header>Study of extended tax expenditures</header>
<subsection id="H1FD43A9542794D97AF9F2153C8365ACA"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than November 30, 2010, the Chief of Staff of the Joint Committee on Taxation, in consultation with the Comptroller General of the United States, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on each tax expenditure (as defined in section 3(3) of the Congressional Budget Impoundment Control Act of 1974 (2 U.S.C. 622(3)) extended by this Act.</text> </subsection>
<subsection id="H1001D706B1404AE38AC1ACD6B8A493F8"><enum>(b)</enum><header>Rolling submission of reports</header><text display-inline="yes-display-inline">The Chief of Staff of the Joint Committee on Taxation shall initially submit the reports for each such tax expenditure enacted in subtitle B of title I (relating to business tax relief) and title IV (relating to energy provisions) in order of the tax expenditure incurring the least aggregate cost to the greatest aggregate cost (determined by reference to the cost estimate of this Act by the Joint Committee on Taxation). Thereafter, such reports may be submitted in such order as the Chief of Staff determines appropriate.</text> </subsection>
<subsection id="H2208301DCDF54B8DB3C2249E327484F1"><enum>(c)</enum><header>Contents of report</header><text>Such reports shall contain the following:</text>
<paragraph id="H6995C7357A8C494FAA2383F1A3456ABB"><enum>(1)</enum><text>An explanation of the tax expenditure and any relevant economic, social, or other context under which it was first enacted.</text> </paragraph>
<paragraph id="H14CCBAA843F848D49966DC63E7843989"><enum>(2)</enum><text>A description of the intended purpose of the tax expenditure.</text> </paragraph>
<paragraph id="HCD188E43ABE1437FA9C00C09E2680CF8"><enum>(3)</enum><text display-inline="yes-display-inline">An analysis of the overall success of the tax expenditure in achieving such purpose, and evidence supporting such analysis.</text> </paragraph>
<paragraph id="H8FAF50D70CF44C59962FCCF614E1D8B9"><enum>(4)</enum><text>An analysis of the extent to which further extending the tax expenditure, or making it permanent, would contribute to achieving such purpose.</text> </paragraph>
<paragraph commented="no" id="H1E0FFD9A71DC4E6198B05F573C631B98"><enum>(5)</enum><text display-inline="yes-display-inline">A description of the direct and indirect beneficiaries of the tax expenditure, including identifying any unintended beneficiaries.</text> </paragraph>
<paragraph id="HF4CD48C1EE434EA19C4F816D89206659"><enum>(6)</enum><text display-inline="yes-display-inline">An analysis of whether the tax expenditure is the most cost-effective method for achieving the purpose for which it was intended, and a description of any more cost-effective methods through which such purpose could be accomplished.</text> </paragraph>
<paragraph id="H34A4C67DCC6E4E8B891424800198FA79"><enum>(7)</enum><text display-inline="yes-display-inline">A description of any unintended effects of the tax expenditure that are useful in understanding the tax expenditure’s overall value.</text> </paragraph>
<paragraph id="HA93B86EA1C624CCCB2864B896123EB03"><enum>(8)</enum><text display-inline="yes-display-inline">An analysis of how the tax expenditure could be modified to better achieve its original purpose.</text> </paragraph>
<paragraph id="HB0CD9C73C2A24BD88F7EBEAF1795E82B"><enum>(9)</enum><text>A brief description of any interactions (actual or potential) with other tax expenditures or direct spending programs in the same or related budget function worthy of further study.</text> </paragraph>
<paragraph id="H1A1F554E798B4E7BB02E8E4D633C8D9D"><enum>(10)</enum><text display-inline="yes-display-inline">A description of any unavailable information the staff of the Joint Committee on Taxation may need to complete a more thorough examination and analysis of the tax expenditure, and what must be done to make such information available.</text> </paragraph></subsection>
<subsection id="H68EC2A6D1C254011BE9A1EE8F78A68E4"><enum>(d)</enum><header>Minimum analysis by deadline</header><text display-inline="yes-display-inline">In the event the Chief of Staff of the Joint Committee on Taxation concludes it will not be feasible to complete all reports by the date specified in subsection (a), at a minimum, the reports for each tax expenditure enacted in subtitle B of title I (relating to business tax relief) and title IV (relating to energy provisions) shall be completed by such date.</text> </subsection></section></subtitle>
Passed the House of Representatives December 9, 2009.Lorraine C. Miller,Clerk.