[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 765 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 765

 To amend the Internal Revenue Code of 1986 to allow the Secretary of 
the Treasury to not impose a penalty for failure to disclose reportable 
transactions when there is reasonable cause for such failure, to modify 
                 such penalty, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 1, 2009

Mr. Nelson of Nebraska (for himself, Mr. Roberts, Mr. Bayh, Mr. Crapo, 
 Mr. Johanns, and Mr. Lugar) 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 allow the Secretary of 
the Treasury to not impose a penalty for failure to disclose reportable 
transactions when there is reasonable cause for such failure, to modify 
                 such penalty, 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. NONIMPOSITION OF PENALTY FOR FAILURE TO DISCLOSE REPORTABLE 
              TRANSACTIONS WHEN THERE IS REASONABLE CAUSE FOR SUCH 
              FAILURE.

    (a) In General.--Subsection (a) of section 6707A of the Internal 
Revenue Code of 1986 is amended by inserting ``, unless it is shown 
that such failure is due to reasonable cause and not due to willful 
neglect'' before the period.
    (b) Conforming Amendments.--
            (1) Subparagraph (C) of section 6664(d)(2) of the Internal 
        Revenue Code of 1986 is amended by striking ``was rescinded 
        under section 6707A(d)'' and inserting ``was not imposed under 
        section 6707A(a)''.
            (2) Section 6707A of such Code is amended by striking 
        subsection (d) and redesignating subsections (e) and (f) as 
        subsections (d) and (e), respectively.
            (3) Subsection (c) of section 6707 of such Code is amended 
        to read as follows:
    ``(c) Rescission Authority.--
            ``(1) In general.--The Commissioner of Internal Revenue may 
        rescind all or any portion of any penalty imposed by this 
        section with respect to any violation if--
                    ``(A) the violation is with respect to a reportable 
                transaction other than a listed transaction, and
                    ``(B) rescinding the penalty would promote 
                compliance with the requirements of this title and 
                effective tax administration.
            ``(2) No judicial appeal.--Notwithstanding any other 
        provision of law, any determination under this subsection may 
        not be reviewed in any judicial proceeding.
            ``(3) Records.--If a penalty is rescinded under paragraph 
        (1), the Commissioner shall place in the file in the Office of 
        the Commissioner the opinion of the Commissioner with respect 
        to the determination, including--
                    ``(A) a statement of the facts and circumstances 
                relating to the violation,
                    ``(B) the reasons for the rescission, and
                    ``(C) the amount of the penalty rescinded.''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to penalties 
        assessed after January 1, 2008.
            (2) Conforming amendment.--The amendment made by subsection 
        (b)(3) shall take effect on the date of the enactment of this 
        Act.

SEC. 2. PROPORTIONALITY OF PENALTY.

    (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 provided in paragraph (2), the 
        amount of the penalty under subsection (a) with respect to a 
        reportable transaction shall be the amount that is equal to 100 
        percent of the penalty that would be imposed under section 
        6662A (without regard to subsection (c) thereof) if the 
        taxpayer had a reportable transaction understatement (as 
        defined in section 6662A(b)) with respect to such transaction.
            ``(2) Listed transaction.--The amount of the penalty under 
        subsection (a) with respect to a listed transaction shall be 
        the amount that is equal to 200 percent of the penalty that 
        would be imposed under section 6662A (without regard to 
        subsection (c) thereof) if the taxpayer had a reportable 
        transaction understatement (as defined in section 6662A(b)) 
        with respect to such transaction.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to penalties assessed after January 1, 2008.

SEC. 3. ONE-TIME ASSESSMENT OF PENALTY.

    (a) In General.--Subsection (a) of section 6707A of the Internal 
Revenue Code of 1986, as amended by section 1, is amended by striking 
``Any person'' and inserting ``Any taxpayer''.
    (b) Conforming Amendments.--Subsection (d) of section 6707A of the 
Internal Revenue Code of 1986, as redesignated by section 1, is amended 
by striking ``person'' each place it appears and inserting 
``taxpayer''.
    (c) Effective Date.--The amendments made by this section shall 
apply to penalties assessed after January 1, 2008.
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