[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2771 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 2771

  To amend the Internal Revenue Code of 1986 to limit the penalty for 
  failure to disclose reportable transactions based on resulting tax 
                   benefits, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 16, 2009

 Mr. Baucus (for himself, Mr. Grassley, and Mr. Crapo) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to limit the penalty for 
  failure to disclose reportable transactions based on resulting tax 
                   benefits, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Penalty Relief Act of 
2009''.

SEC. 2. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE REPORTABLE 
              TRANSACTIONS BASED ON RESULTING TAX BENEFITS.

    (a) In General.--Subsection (b) of section 6707A of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(b) Amount of Penalty.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the amount of the penalty under subsection (a) with 
        respect to any reportable transaction shall be 75 percent of 
        the decrease in tax shown on the return as a result of such 
        transaction (or which would have resulted from such transaction 
        if such transaction were respected for Federal tax purposes).
            ``(2) Maximum penalty.--The amount of the penalty under 
        subsection (a) with respect to any reportable transaction shall 
        not exceed--
                    ``(A) in the case of a listed transaction, $200,000 
                ($100,000 in the case of a natural person),
                    ``(B) in the case of any other reportable 
                transaction, $50,000 ($10,000 in the case of a natural 
                person).
            ``(3) Minimum penalty for listed transactions.--In the case 
        of a listed transaction, the amount of the penalty under 
        subsection (a) with respect to such transaction shall not be 
        less than $10,000 ($5,000 in the case of a natural person).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to penalties assessed after December 31, 2006.

SEC. 3. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER ENFORCEMENT 
              ACTIONS.

    (a) In General.--The Commissioner of Internal Revenue, in 
consultation with the Secretary of the Treasury, shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate an annual report on the penalties 
assessed by the Internal Revenue Service during the preceding year 
under each of the following provisions of the Internal Revenue Code of 
1986:
            (1) Section 6662A (relating to accuracy-related penalty on 
        understatements with respect to reportable transactions).
            (2) Section 6700(a) (relating to promoting abusive tax 
        shelters).
            (3) Section 6707 (relating to failure to furnish 
        information regarding reportable transactions).
            (4) Section 6707A (relating to failure to include 
        reportable transaction information with return).
            (5) Section 6708 (relating to failure to maintain lists of 
        advisees with respect to reportable transactions).
    (b) Additional Information.--The report required under subsection 
(a) shall also include information on the following with respect to 
each year:
            (1) Any action taken under section 330(b) of title 31, 
        United States Code, with respect to any reportable transaction 
        (as defined in section 6707A(c) of the Internal Revenue Code of 
        1986).
            (2) Any extension of the time for assessment of tax 
        enforced, or assessment of any amount under such an extension, 
        under paragraph (10) of section 6501(c) of the Internal Revenue 
        Code of 1986.
    (c) Date of Report.--The first report required under subsection (a) 
shall be submitted not later than June 1, 2010.
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