[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4936 Introduced in House (IH)]

<DOC>






114th CONGRESS
  2d Session
                                H. R. 4936

               To provide assistance to small businesses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 14, 2016

 Mr. Walberg introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
  Oversight and Government Reform, Small Business, Education and the 
     Workforce, and the Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
               To provide assistance to small businesses.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Main Street Jobs 
and Opportunity Act of 2016''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                       TITLE I--DEATH TAX REPEAL

Sec. 101. Repeal of estate and generation-skipping transfer taxes.
Sec. 102. Modifications of gift tax.
               TITLE II--SMALL BUSINESS PAPERWORK RELIEF

Sec. 201. Suspension of fines for first-time paperwork violations by 
                            small business concerns.
                   TITLE III--OCCUPATIONAL LICENSING

Sec. 301. Sense of Congress regarding occupational licensing.
Sec. 302. Study on effects of certain occupational licensing 
                            requirements.
    TITLE IV--RESTORE TRADITIONAL DEFINITION OF FULL-TIME EMPLOYMENT

Sec. 401. Repeal of 30-hour threshold for classification as full-time 
                            employee for purposes of the employer 
                            mandate in the Patient Protection and 
                            Affordable Care Act and replacement with 40 
                            hours.
           TITLE V--SMALL BUSINESS START-UP SAVINGS ACCOUNTS

Sec. 501. Establishment of Small Business Start-Up Savings Accounts.
                   TITLE VI--LIMIT FRIVOLOUS LAWSUITS

Sec. 601. Attorney accountability.
                 TITLE VII--INCREASE IRS ACCOUNTABILITY

Sec. 701. Modification of standards for awarding of costs and certain 
                            fees.
Sec. 702. Civil damages allowed for reckless or intentional disregard 
                            of internal revenue laws.
Sec. 703. Modifications relating to certain offenses by officers and 
                            employees in connection with revenue laws.
Sec. 704. Modifications relating to civil damages for unauthorized 
                            inspection or disclosure of returns and 
                            return information.
Sec. 705. Increase in monetary penalties for certain unauthorized 
                            disclosures of information.

                       TITLE I--DEATH TAX REPEAL

SEC. 101. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.

    (a) Estate Tax Repeal.--Subchapter C of chapter 11 of subtitle B of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 2210. TERMINATION.

    ``(a) In General.--Except as provided in subsection (b), this 
chapter shall not apply to the estates of decedents dying on or after 
the date of the enactment of the Main Street Jobs and Opportunity Act 
of 2016.
    ``(b) Certain Distributions From Qualified Domestic Trusts.--In 
applying section 2056A with respect to the surviving spouse of a 
decedent dying before the date of the enactment of the Main Street Jobs 
and Opportunity Act of 2016--
            ``(1) section 2056A(b)(1)(A) shall not apply to 
        distributions made after the 10-year period beginning on such 
        date, and
            ``(2) section 2056A(b)(1)(B) shall not apply on or after 
        such date.''.
    (b) Generation-Skipping Transfer Tax Repeal.--Subchapter G of 
chapter 13 of subtitle B of such Code is amended by adding at the end 
the following new section:

``SEC. 2664. TERMINATION.

    ``This chapter shall not apply to generation-skipping transfers on 
or after the date of the enactment of the Main Street Jobs and 
Opportunity Act of 2016.''.
    (c) Conforming Amendments.--
            (1) The table of sections for subchapter C of chapter 11 of 
        the Internal Revenue Code of 1986 is amended by adding at the 
        end the following new item:

``Sec. 2210. Termination.''.
            (2) The table of sections for subchapter G of chapter 13 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 2664. Termination.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to the estates of decedents dying, and generation-skipping 
transfers, on or after the date of the enactment of this Act.

SEC. 102. MODIFICATIONS OF GIFT TAX.

    (a) Computation of Gift Tax.--Subsection (a) of section 2502 of the 
Internal Revenue Code of 1986 is amended to read as follows:
    ``(a) Computation of Tax.--
            ``(1) In general.--The tax imposed by section 2501 for each 
        calendar year shall be an amount equal to the excess of--
                    ``(A) a tentative tax, computed under paragraph 
                (2), on the aggregate sum of the taxable gifts for such 
                calendar year and for each of the preceding calendar 
                periods, over
                    ``(B) a tentative tax, computed under paragraph 
                (2), on the aggregate sum of the taxable gifts for each 
                of the preceding calendar periods.
            ``(2) Rate schedule.--


``If the amount with respect to which    The tentative tax is:
 the tentative tax to be computed is:.
Not over $10,000.......................  18% of such amount.
Over $10,000 but not over $20,000......  $1,800, plus 20% of the excess
                                          over $10,000.
Over $20,000 but not over $40,000......  $3,800, plus 22% of the excess
                                          over $20,000.
Over $40,000 but not over $60,000......  $8,200, plus 24% of the excess
                                          over $40,000.
Over $60,000 but not over $80,000......  $13,000, plus 26% of the excess
                                          over $60,000.
Over $80,000 but not over $100,000.....  $18,200, plus 28% of the excess
                                          over $80,000.
Over $100,000 but not over $150,000....  $23,800, plus 30% of the excess
                                          over $100,000.
Over $150,000 but not over $250,000....  $38,800, plus 32% of the excess
                                          of $150,000.
Over $250,000 but not over $500,000....  $70,800, plus 34% of the excess
                                          over $250,000.
Over $500,000..........................  $155,800, plus 35% of the
                                          excess of $500,000.''.
 

    (b) Treatment of Certain Transfers in Trust.--Section 2511 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(c) Treatment of Certain Transfers in Trust.--Notwithstanding any 
other provision of this section and except as provided in regulations, 
a transfer in trust shall be treated as a taxable gift under section 
2503, unless the trust is treated as wholly owned by the donor or the 
donor's spouse under subpart E of part I of subchapter J of chapter 
1.''.
    (c) Lifetime Gift Exemption.--
            (1) In general.--Paragraph (1) of section 2505(a) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(1) the amount of the tentative tax which would be 
        determined under the rate schedule set forth in section 
        2502(a)(2) if the amount with respect to which such tentative 
        tax is to be computed were $5,000,000, reduced by''.
            (2) Inflation adjustment.--Section 2505 of such Code is 
        amended by adding at the end the following new subsection:
    ``(d) Inflation Adjustment.--
            ``(1) In general.--In the case of any calendar year after 
        2011, the dollar amount in subsection (a)(1) shall be increased 
        by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting `calendar year 2010' for `calendar year 
                1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $10,000, such amount shall be rounded 
        to the nearest multiple of $10,000.''.
    (d) Conforming Amendments.--
            (1) The heading for section 2505 of such Code is amended by 
        striking ``unified''.
            (2) The item in the table of sections for subchapter A of 
        chapter 12 of such Code relating to section 2505 is amended to 
        read as follows:

``Sec. 2505. Credit against gift tax.''.
            (3) Section 2801(a)(1) of such Code is amended by striking 
        ``section 2001(c) as in effect on the date of such receipt'' 
        and inserting ``section 2502(a)(2)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to gifts made on or after the date of the enactment of this Act.
    (f) Transition Rule.--
            (1) In general.--For purposes of applying sections 1015(d), 
        2502, and 2505 of the Internal Revenue Code of 1986, the 
        calendar year in which this Act is enacted shall be treated as 
        2 separate calendar years one of which ends on the day before 
        the date of the enactment of this Act and the other of which 
        begins on such date of enactment.
            (2) Application of section 2504(b).--For purposes of 
        applying section 2504(b) of the Internal Revenue Code of 1986, 
        the calendar year in which this Act is enacted shall be treated 
        as one preceding calendar period.

               TITLE II--SMALL BUSINESS PAPERWORK RELIEF

SEC. 201. SUSPENSION OF FINES FOR FIRST-TIME PAPERWORK VIOLATIONS BY 
              SMALL BUSINESS CONCERNS.

    Section 3506 of title 44, United States Code (commonly referred to 
as the ``Paperwork Reduction Act''), is amended by adding at the end 
the following:
    ``(j) Small Businesses.--
            ``(1) Small business concern.--In this subsection, the term 
        `small business concern' has the meaning given that term under 
        section 3 of the Small Business Act (15 U.S.C. 632).
            ``(2) In general.--In the case of a first-time violation by 
        a small business concern of a requirement regarding the 
        collection of information by an agency, the head of the agency 
        shall not impose a civil fine on the small business concern 
        unless the head of the agency determines that--
                    ``(A) the violation has the potential to cause 
                serious harm to the public interest;
                    ``(B) failure to impose a civil fine would impede 
                or interfere with the detection of criminal activity;
                    ``(C) the violation is a violation of an internal 
                revenue law or a law concerning the assessment or 
                collection of any tax, debt, revenue, or receipt;
                    ``(D) the violation was not corrected on or before 
                the date that is 6 months after the date on which the 
                small business concern receives notification of the 
                violation in writing from the agency; or
                    ``(E) except as provided in paragraph (3), the 
                violation presents a danger to the public health or 
                safety.
            ``(3) Danger to public health or safety.--
                    ``(A) In general.--In any case in which the head of 
                an agency determines under paragraph (2)(E) that a 
                violation presents a danger to the public health or 
                safety, the head of the agency may, notwithstanding 
                paragraph (2)(E), determine not to impose a civil fine 
                on the small business concern if the violation is 
                corrected not later than 24 hours after receipt by the 
                owner of the small business concern of notification of 
                the violation in writing.
                    ``(B) Considerations.--In determining whether to 
                allow a small business concern 24 hours to correct a 
                violation under subparagraph (A), the head of an agency 
                shall take into account all of the facts and 
                circumstances regarding the violation, including--
                            ``(i) the nature and seriousness of the 
                        violation, including whether the violation is 
                        technical or inadvertent or involves willful or 
                        criminal conduct;
                            ``(ii) whether the small business concern 
                        has made a good faith effort to comply with 
                        applicable laws and to remedy the violation 
                        within the shortest practicable period of time; 
                        and
                            ``(iii) whether the small business concern 
                        has obtained a significant economic benefit 
                        from the violation.
                    ``(C) Notice to congress.--In any case in which the 
                head of an agency imposes a civil fine on a small 
                business concern for a violation that presents a danger 
                to the public health or safety and does not allow the 
                small business concern 24 hours to correct the 
                violation under subparagraph (A), the head of the 
                agency shall notify Congress regarding the 
                determination not later than 60 days after the date on 
                which the civil fine is imposed by the agency.
            ``(4) Limited to first-time violations.--
                    ``(A) In general.--This subsection shall not apply 
                to any violation by a small business concern of a 
                requirement regarding collection of information by an 
                agency if the small business concern previously 
                violated any requirement regarding collection of 
                information by the agency.
                    ``(B) Other agencies.--For purposes of making a 
                determination under subparagraph (A), the head of an 
                agency shall not take into account any violation of a 
                requirement regarding collection of information by 
                another agency.''.

                   TITLE III--OCCUPATIONAL LICENSING

SEC. 301. SENSE OF CONGRESS REGARDING OCCUPATIONAL LICENSING.

    It is the sense of Congress that--
            (1) the Department of Labor should act within its existing 
        authority to reduce employment barriers created by certain 
        occupational licensing requirements, including providing 
        technical assistance and disseminating guidance and information 
        on best practices to States interested in increasing economic 
        opportunity through licensing reciprocity agreements or other 
        approaches; and
            (2) that States should form interstate compacts to make it 
        easier for licensed workers to practice and relocate across 
        State lines, while also enabling State regulators to share 
        practitioners' performance histories.

SEC. 302. STUDY ON EFFECTS OF CERTAIN OCCUPATIONAL LICENSING 
              REQUIREMENTS.

    (a) Study.--The Secretary of Labor shall conduct a study on the 
effects of occupational licensing requirements to determine how such 
requirements may--
            (1) affect the service quality of certain occupations;
            (2) affect public safety; and
            (3) impose barriers to entry for establishing small 
        businesses, inhibit competition, increase costs to consumers, 
        limit hiring, or negatively impact certain populations.
    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary shall transmit a report to Congress detailing 
the results of the study required by subsection (a), including any 
recommendation for legislation.

    TITLE IV--RESTORE TRADITIONAL DEFINITION OF FULL-TIME EMPLOYMENT

SEC. 401. REPEAL OF 30-HOUR THRESHOLD FOR CLASSIFICATION AS FULL-TIME 
              EMPLOYEE FOR PURPOSES OF THE EMPLOYER MANDATE IN THE 
              PATIENT PROTECTION AND AFFORDABLE CARE ACT AND 
              REPLACEMENT WITH 40 HOURS.

    (a) Full-Time Equivalents.--Paragraph (2) of section 4980H(c) of 
the Internal Revenue Code of 1986 is amended--
            (1) by repealing subparagraph (E), and
            (2) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) Full-time equivalents treated as full-time 
                employees.--Solely for purposes of determining whether 
                an employer is an applicable large employer under this 
                paragraph, an employer shall, in addition to the number 
                of full-time employees for any month otherwise 
                determined, include for such month a number of full-
                time employees determined by dividing the aggregate 
                number of hours of service of employees who are not 
                full-time employees for the month by 174.''.
    (b) Full-Time Employees.--Paragraph (4) of section 4980H(c) of the 
Internal Revenue Code of 1986 is amended--
            (1) by repealing subparagraph (A), and
            (2) by inserting before subparagraph (B) the following new 
        subparagraph:
                    ``(A) In general.--The term `full-time employee' 
                means, with respect to any month, an employee who is 
                employed on average at least 40 hours of service per 
                week.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 31, 2013.

           TITLE V--SMALL BUSINESS START-UP SAVINGS ACCOUNTS

SEC. 501. ESTABLISHMENT OF SMALL BUSINESS START-UP SAVINGS ACCOUNTS.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7529. SMALL BUSINESS START-UP SAVINGS ACCOUNTS.

    ``(a) In General.--An individual or an eligible small business may 
enter into an agreement with the Secretary to establish a small 
business start-up savings account.
    ``(b) Small Business Start-Up Savings Account.--For purposes of 
this section, the term `small business start-up savings account' means 
a trust created or organized in the United States for the benefit of 
the account beneficiary, but only if the written governing instrument 
creating the trust meets the following requirements:
            ``(1) Except as provided in subsection (d)(3) in the case 
        of a rollover contribution, no contribution will be accepted 
        unless it is in cash, and contributions will not be accepted 
        for the taxable year on behalf of any account beneficiary in 
        excess of the amount in effect for such taxable year under 
        subsection (d)(2).
            ``(2) The trustee is a bank (as defined in section 408(n)) 
        or such other person who demonstrates to the satisfaction of 
        the Secretary that the manner in which such other person will 
        administer the trust will be consistent with the requirements 
        of this section.
            ``(3) No part of the trust funds will be invested in life 
        insurance contracts.
            ``(4) The interest of an individual in the balance of his 
        account is nonforfeitable.
            ``(5) The assets of the trust will not be commingled with 
        other property except in a common trust fund or common 
        investment fund.
    ``(c) Eligible Small Business.--For purposes of this section, the 
term `eligible small business' means, with respect to any taxable year, 
any person engaged in a trade or business if the average number of 
employees employed by such person on business days during the taxable 
year was 500 or fewer.
    ``(d) Treatment of Contributions.--
            ``(1) In general.--There shall be allowed as a deduction 
        for the taxable year an amount equal to so much of the account 
        beneficiary's contributions for the taxable year to all small 
        business start-up savings accounts maintained for the benefit 
        of such beneficiary as do not exceed the contribution 
        limitations in effect for the taxable year under paragraph (2).
            ``(2) Contribution limitation.--
                    ``(A) In general.--The amount allowable as a 
                deduction under paragraph (1) with respect to all small 
                business start-up savings accounts maintained for the 
                benefit of any person shall not exceed the lesser of--
                            ``(i) $10,000, or
                            ``(ii) $150,000, reduced by the aggregate 
                        contributions by such person for all taxable 
                        years with respect to all small business start-
                        up savings accounts of the taxpayer.
                    ``(B) Cost of living adjustment.--
                            ``(i) In general.--In the case of a taxable 
                        year beginning after 2016, the $10,000 amount 
                        in subparagraph (A) shall be increased by an 
                        amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting `calendar year 2015' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $500, 
                        such amount shall be rounded to the next lowest 
                        multiple of $500.
            ``(3) Rollovers from retirement plans not allowed.--Under 
        regulations prescribed by the Secretary, a person may make a 
        rollover contribution to a small business start-up savings 
        account only in the case of a rollover from another small 
        business start-up savings account.
            ``(4) Treated as deduction for individuals and 
        corporations.--For purposes of chapter 1, the deduction allowed 
        under paragraph (1) shall be treated as a deduction specified 
        in part VI of subchapter B of chapter 1 (relating to itemized 
        deductions for individuals and corporations).
    ``(e) Treatment of Distributions.--
            ``(1) Tax treatment.--
                    ``(A) Exclusion of qualified distributions.--Any 
                qualified distribution from a small business start-up 
                savings account shall not be includible in gross 
                income.
                    ``(B) Inclusion of other distributions.--Any 
                distribution from a small business start-up savings 
                account which is not a qualified distribution shall be 
                included in gross income.
            ``(2) Qualified distribution.--For purposes of this 
        subsection, the term `qualified distribution' means, with 
        respect to any taxable year, any payment or distribution from a 
        small business start-up savings account--
                    ``(A) to the extent the amount of such payment or 
                distribution does not exceed the sum of--
                            ``(i) the aggregate amounts paid or 
                        incurred by the taxpayer for such taxable year 
                        with respect to the taxpayer's trade or 
                        business for the purchase of equipment or 
                        facilities, marketing, training, incorporation, 
                        and accounting fees, and
                            ``(ii) the aggregate capital contributions 
                        of the taxpayer with respect to an eligible 
                        small business for the taxable year (but only 
                        to the extent such amounts are used by such 
                        small business for purposes described in clause 
                        (i)), and
                    ``(B) which, in the case of a payment or 
                distribution subsequent to the first payment or 
                distribution from such account (or any predecessor to 
                such account)--
                            ``(i) is made not later than the close of 
                        the 5th taxable year beginning after the date 
                        of such first payment or distribution, and
                            ``(ii) is made with respect to the same 
                        eligible small business with respect to which 
                        such first payment or distribution was made.
            ``(3) Treatment after death of account beneficiary.--
                    ``(A) In general.--If, by reason of the death of 
                the account beneficiary, any person acquires the 
                account beneficiary's interest in a small business 
                start-up savings account--
                            ``(i) such account shall cease to be a 
                        small business start-up savings account as of 
                        the date of death, and
                            ``(ii) an amount equal to the fair market 
                        value of the assets in such account on such 
                        date shall be includible--
                                    ``(I) in the case of a person who 
                                is not the estate of such beneficiary, 
                                in such person's gross income for the 
                                taxable year which includes such date, 
                                or
                                    ``(II) in the case of a person who 
                                is the estate of such beneficiary, in 
                                such beneficiary's gross income for the 
                                last taxable year of such beneficiary.
                    ``(B) Special rules.--
                            ``(i) Reduction of inclusion for predeath 
                        expenses.--The amount includible in gross 
                        income under subparagraph (A) shall be reduced 
                        by the amounts described in paragraph (2) which 
                        were incurred by the decedent before the date 
                        of the decedent's death and paid by such person 
                        within 1 year after such date.
                            ``(ii) Deduction for estate taxes.--An 
                        appropriate deduction shall be allowed under 
                        section 691(c) to any person (other than the 
                        decedent) with respect to amounts included in 
                        gross income under subparagraph (A)(ii)(I) by 
                        such person.
            ``(4) Treatment for failure to be treated as eligible small 
        business.--If for any taxable year a taxpayer which holds a 
        small business start-up savings account as an eligible small 
        business ceases to be an eligible small business--
                    ``(A) such account shall cease to be a small 
                business start-up savings account, and
                    ``(B) the balance of such account shall be treated 
                as paid out for such taxable year in a distribution 
                which is not a qualified distribution.
    ``(f) Special Rules.--
            ``(1) Denial of double benefit.--Any deduction or credit 
        otherwise allowed for the taxable year with respect to amounts 
        described in subsection (e)(2)(A) shall be reduced by an amount 
        equal to the qualified distributions attributable to such 
        amounts. The adjusted basis of any property placed in service 
        for the taxable year shall be reduced by the amount of any 
        qualified distributions attributable to such property. For 
        purposes of this paragraph, qualified distributions shall first 
        be treated as attributable to amounts described in subsection 
        (e)(2)(A), then to property placed in service for the taxable 
        year.
            ``(2) Aggregation rule.--For purposes of this section, all 
        persons treated as a single employer under subsection (a) or 
        (b) of section 52, or subsection (m) or (o) of section 414, 
        shall be treated as one person.''.
    (b) Excise Tax on Excess Contributions and Nonqualified 
Distributions.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

        ``CHAPTER 50A--SMALL BUSINESS START-UP SAVINGS ACCOUNTS

``Sec. 5000D. Tax on excess contributions to small business start-up 
                            savings accounts.
``Sec. 5000E. Tax on nonqualified distributions from small business 
                            start-up savings accounts.
``Sec. 5000F. Cross reference.

``SEC. 5000D. TAX ON EXCESS CONTRIBUTIONS TO SMALL BUSINESS START-UP 
              SAVINGS ACCOUNTS.

    ``(a) In General.--In the case of a small business start-up savings 
account (within the meaning of section 7529) there is imposed for each 
taxable year a tax in an amount equal to 6 percent of the amount of the 
excess contributions to such taxpayer's account (determined as of the 
close of the taxable year).
    ``(b) Limitation.--The amount of tax imposed by subsection (a) 
shall not exceed 6 percent of the value of the account (determined as 
of the close of the taxable year).
    ``(c) Excess Contributions.--For purposes of this section, in the 
case of contributions to all small business start-up savings accounts 
maintained for the benefit of a person, the term `excess contributions' 
means the sum of--
            ``(1) the excess (if any) of--
                    ``(A) the amount contributed to such accounts for 
                the taxable year, over
                    ``(B) the amount allowable as a contribution under 
                section 7529(d)(2)(A) for such taxable year, and
            ``(2) the amount determined under this subsection for the 
        preceding taxable year, reduced by the sum of--
                    ``(A) the distributions out of the accounts for the 
                taxable year, and
                    ``(B) the excess (if any) of--
                            ``(i) the maximum amount allowable as a 
                        contribution under section 7529(d)(2)(A) for 
                        such taxable year, over
                            ``(ii) the amount contributed to such 
                        accounts for such taxable year.

``SEC. 5000E. TAX ON NONQUALIFIED DISTRIBUTIONS FROM SMALL BUSINESS 
              START-UP SAVINGS ACCOUNTS.

    ``(a) In General.--If for any taxable year an amount is paid or 
distributed out of a taxpayer's small business start-up savings 
account, there is imposed for such taxable year a tax in an amount 
equal to 10 percent of the portion of such amount which is includible 
in the gross income of the taxpayer.
    ``(b) Exception for Disability or Death.--Subsection (a) shall not 
apply if the payment or distribution is made after the account 
beneficiary becomes disabled within the meaning of section 72(m)(7) 
(but only if such beneficiary's account was created before becoming so 
disabled) or dies.

``SEC. 5000F. CROSS REFERENCE.

    ``For prohibited transactions, see section 4975.''.
    (c) Prohibited Transactions.--
            (1) In general.--Paragraph (1) of section 4975(e) of such 
        Code is amended by striking ``or'' at the end of subparagraph 
        (F), by striking the period at the end of subparagraph and 
        inserting ``, or'', and by adding at the end the following new 
        subparagraph:
                    ``(H) a small business start-up savings account 
                (within the meaning of section 7529).''.
            (2) Special rule for ceasing to be a small business start-
        up savings account.--Section 4975(c) of such Code (relating to 
        tax on prohibited transactions) is amended by adding at the end 
        the following new paragraph:
            ``(7) Special rule for small business start-up savings 
        account.--An individual for whose benefit a small business 
        start-up savings account (within the meaning of section 7529) 
        is established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a small 
        business start-up savings account by reason of the application 
        of paragraph (3) or (4) of section 7529(e) to such account.''.
    (d) Deduction Allowed Whether or Not Individual Itemizes.--
Subsection (a) of section 62 of such Code is amended by inserting after 
paragraph (21) the following new paragraph:
            ``(22) Contributions to small business start-up savings 
        accounts.--The deduction allowed by section 7529(d)(1)(A).''.
    (e) Conforming Amendments.--
            (1) The table of chapters for subtitle D of such Code is 
        amended by adding at the end the following new item:

       ``Chapter 50A. Small Business Start-Up Savings Accounts''.

            (2) The table of sections for chapter 77 of such Code is 
        amended by inserting after the item relating to section 7528 
        the following new item:

``Sec. 7529. Small Business Start-Up Savings Accounts.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

                   TITLE VI--LIMIT FRIVOLOUS LAWSUITS

SEC. 601. ATTORNEY ACCOUNTABILITY.

    (a) Sanctions Under Rule 11.--Rule 11(c) of the Federal Rules of 
Civil Procedure is amended--
            (1) in paragraph (1), by striking ``may'' and inserting 
        ``shall'';
            (2) in paragraph (2), by striking ``Rule 5'' and all that 
        follows through ``motion.'' and inserting ``Rule 5.''; and
            (3) in paragraph (4), by striking ``situated'' and all that 
        follows through the end of the paragraph and inserting 
        ``situated, and to compensate the parties that were injured by 
        such conduct. Subject to the limitations in paragraph (5), the 
        sanction shall consist of an order to pay to the party or 
        parties the amount of the reasonable expenses incurred as a 
        direct result of the violation, including reasonable attorneys' 
        fees and costs. The court may also impose additional 
        appropriate sanctions, such as striking the pleadings, 
        dismissing the suit, or other directives of a non-monetary 
        nature, or, if warranted for effective deterrence, an order 
        directing payment of a penalty into the court.''.
    (b) Rule of Construction.--Nothing in this Act or an amendment made 
by this Act shall be construed to bar or impede the assertion or 
development of new claims, defenses, or remedies under Federal, State, 
or local laws, including civil rights laws, or under the Constitution 
of the United States.

                 TITLE VII--INCREASE IRS ACCOUNTABILITY

SEC. 701. MODIFICATION OF STANDARDS FOR AWARDING OF COSTS AND CERTAIN 
              FEES.

    (a) Small Businesses Eligible Without Regard to Net Worth.--
Subparagraph (D) of section 7430(c)(4) of the Internal Revenue Code of 
1986 is amended by striking ``and'' at the end of clause (i)(II), by 
striking the period at the end of clause (ii) and inserting ``, and'', 
and by adding at the end the following new clause:
                            ``(iii) in the case of an eligible small 
                        business, the net worth limitation in clause 
                        (ii) of such section shall not apply.''.
    (b) Eligible Small Business.--Paragraph (4) of section 7430(c) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(F) Eligible small business.--For purposes of 
                subparagraph (D)(iii), the term `eligible small 
                business' means, with respect to any proceeding 
                commenced in a taxable year--
                            ``(i) a corporation the stock of which is 
                        not publicly traded,
                            ``(ii) a partnership, or
                            ``(iii) a sole proprietorship,
                if the average annual gross receipts of such 
                corporation, partnership, or sole proprietorship for 
                the 3-taxable-year period preceding such taxable year 
                does not exceed $50,000,000. For purposes of applying 
                the test under the preceding sentence, rules similar to 
                the rules of paragraphs (2) and (3) of section 448(c) 
                shall apply.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to proceedings commenced after the date of the enactment of this 
Act.

SEC. 702. CIVIL DAMAGES ALLOWED FOR RECKLESS OR INTENTIONAL DISREGARD 
              OF INTERNAL REVENUE LAWS.

    (a) Increase in Amount of Damages.--Section 7433(b) of the Internal 
Revenue Code of 1986 is amended by striking ``$1,000,000 ($100,000, in 
the case of negligence)'' and inserting ``$3,000,000 ($300,000, in the 
case of negligence)''.
    (b) Extension of Time To Bring Action.--Section 7433(d)(3) of the 
Internal Revenue Code of 1986 is amended by striking ``2 years'' and 
inserting ``5 years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to actions of employees of the Internal Revenue Service after the 
date of the enactment of this Act.

SEC. 703. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY OFFICERS AND 
              EMPLOYEES IN CONNECTION WITH REVENUE LAWS.

    (a) Increase in Penalty.--Section 7214 of the Internal Revenue Code 
of 1986 is amended--
            (1) by striking ``$10,000'' in subsection (a) and inserting 
        ``$25,000'', and
            (2) by striking ``$5,000'' in subsection (b) and inserting 
        ``$10,000''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 704. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR UNAUTHORIZED 
              INSPECTION OR DISCLOSURE OF RETURNS AND RETURN 
              INFORMATION.

    (a) Increase in Amount of Damages.--Subparagraph (A) of section 
7431(c)(1) of the Internal Revenue Code of 1986 is amended by striking 
``$1,000'' and inserting ``$10,000''.
    (b) Effective Date.--The amendment made by this section shall apply 
to inspections and disclosure occurring on and after the date of the 
enactment of this Act.

SEC. 705. INCREASE IN MONETARY PENALTIES FOR CERTAIN UNAUTHORIZED 
              DISCLOSURES OF INFORMATION.

    (a) In General.--Paragraphs (1), (2), (3), and (4) of section 
7213(a) of the Internal Revenue Code of 1986 are each amended by 
striking ``$5,000'' and inserting ``$10,000''.
    (b) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date of the enactment of this Act.
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