[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1827 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1827

To amend the Internal Revenue Code of 1986 to improve the tax treatment 
                          of small businesses.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2015

  Mr. Vitter 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 improve the tax treatment 
                          of 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, ETC.

    (a) Short Title.--This Act may be cited as the ``Small Business Tax 
Compliance Relief Act of 2015''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, etc.
                   TITLE I--SMALL BUSINESS TAX REFORM

Sec. 101. Expansion of cash accounting threshold.
Sec. 102. Modification of Safe Harbor for Expensing of Acquisition or 
                            Production Costs of Tangible Property.
Sec. 103. Removal of computer equipment from listed property.
Sec. 104. Deduction for health insurance costs in computing self-
                            employment taxes.
Sec. 105. Flexible retirement account for small businesses.
Sec. 106. Repeal of simple plans and simple IRAs.
Sec. 107. Modification of rules relating to the termination of 
                            partnerships and S corporations.
Sec. 108. Repeal of special rules for top-heavy plans.
      TITLE II--PROVISIONS RELATED TO THE INTERNAL REVENUE SERVICE

Sec. 201. Requirement to convene small business review panels.
Sec. 202. Penalty waivers in cases of good faith efforts.
Sec. 203. Inflation adjustments for certain provisions.
Sec. 204. Report on uniform definitions.
Sec. 205. Report on improvements to customer service.
Sec. 206. Reasonable cause exception for failure to report certain 
                            transactions.
Sec. 207. Reasonable cause exception.
Sec. 208. Return due date modifications.
          TITLE III--PROVISIONS RELATED TO START-UP BUSINESSES

Sec. 301. Modification of application of rules for nonqualified 
                            deferred compensation plans.
Sec. 302. Reduction in holding period for qualified small business 
                            stock.
Sec. 303. Extension of rollover period for qualified small business 
                            stock.

                   TITLE I--SMALL BUSINESS TAX REFORM

SEC. 101. EXPANSION OF CASH ACCOUNTING THRESHOLD.

    (a) In General.--
            (1) In general.--Paragraph (3) of section 448(b) of the 
        Internal Revenue Code of 1986 is amended by striking 
        ``$5,000,000'' in the text and in the heading and inserting 
        ``$10,000,000''.
            (2) Conforming amendments.--Section 448(c) of such Code is 
        amended--
                    (A) by striking ``$5,000,000'' each place it 
                appears in the text and in the heading of paragraph (1) 
                and inserting ``$10,000,000'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2015, the dollar amount 
        contained in subsection (b)(3) and paragraph (1) of this 
        subsection 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 the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                2014' for `calendar year 1992' in subparagraph (B) 
                thereof.
        If any amount as adjusted under this subparagraph is not a 
        multiple of $100,000, such amount shall be rounded to the 
        nearest multiple of $100,000.''.
    (b) Exemption From Inventory Requirement.--Section 471 of the 
Internal Revenue Code of 1986 is amended by redesignating subsection 
(c) as subsection (d) and by inserting after subsection (b) the 
following new subsection:
    ``(c) Section Not To Apply to Certain Cash Method Taxpayers.--If a 
taxpayer--
            ``(1) would otherwise be required to use inventories under 
        this section for any taxable year, but
            ``(2) the taxpayer meets the gross receipts test of section 
        448(b) for the taxable year and is eligible and elects to use 
        the cash receipts and disbursements method of accounting for 
        the taxable year,
then the requirement to use inventories shall not apply to the taxpayer 
for the taxable year.''.
    (c) Effective Date and Special Rule.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2014.
            (2) Change in method of accounting.--In the case of any 
        taxpayer changing the taxpayer's method of accounting for any 
        taxable year under the amendments made by this section--
                    (A) such change shall be treated as initiated by 
                the taxpayer; and
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury.

SEC. 102. MODIFICATION OF SAFE HARBOR FOR EXPENSING OF ACQUISITION OR 
              PRODUCTION COSTS OF TANGIBLE PROPERTY.

    (a) Requirement To Modify Safe Harbor.--The Secretary of the 
Treasury or his delegate shall, within 180 days after the date of 
enactment of this Act, modify Treasury Regulations section 1.263(a)-
1(f) by--
            (1) increasing the amount of the de minimis safe harbor for 
        taxpayers without applicable financial statements from $500 to 
        $2,500,
            (2) requiring adequate records showing the dollar amount 
        being expensed in lieu of accounting procedures in place at the 
        beginning of the taxable year, and
            (3) modifying the definition of applicable financial 
        statement to include reviewed financial statements.
    (b) Effective Date.--The modifications required by subsection (a) 
shall apply to taxable years beginning after December 31, 2014.

SEC. 103. REMOVAL OF COMPUTER EQUIPMENT FROM LISTED PROPERTY.

    (a) In General.--Section 280F(d)(4)(A) of the Internal Revenue Code 
of 1986 is amended by inserting ``and'' at the end of clause (iii) and 
by striking clause (iv).
    (b) Conforming Amendment.--Section 280F(d)(4) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (B) and by 
redesignating subparagraph (C) as subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 104. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING SELF-
              EMPLOYMENT TAXES.

    (a) In General.--Paragraph (4) of section 162(l) of the Internal 
Revenue Code of 1986 is amended by striking ``for taxable years 
beginning before January 1, 2010, or after December 31, 2010'' and 
inserting ``for taxable years beginning before January 1, 2015.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2014.

SEC. 105. FLEXIBLE RETIREMENT ACCOUNT FOR SMALL BUSINESSES.

    (a) In General.--Section 408 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (r) as subsection (s) and by 
inserting after subsection (q) the following new subsection:
    ``(r) Flexible Retirement Account Defined.--
            ``(1) In general.--For purposes of this title, the term 
        `flexible retirement account' means an individual retirement 
        account or individual retirement annuity with respect to which 
        the requirements of paragraphs (2), (3), (4), and (7) are met.
            ``(2) Maintained by small business.--
                    ``(A) In general.--This paragraph is satisfied for 
                a year with respect to a flexible retirement account 
                that is part of a plan of an employer if the employer 
                has not more than 100 full-time employees on the last 
                day of the previous year.
                    ``(B) Aggregation rules.--For purposes of 
                subparagraph (A), all employees of any trades or 
                business (whether or not incorporated) which are under 
                common control shall be treated as employed by a single 
                employer.
            ``(3) Participation requirements.--This paragraph is 
        satisfied with respect to a flexible retirement account for a 
        year only if for such year the employer maintains a flexible 
        retirement account on behalf of each employee who--
                    ``(A) has attained age 21, and
                    ``(B) received not less than $3,300 in compensation 
                (within the meaning of section 415(c)(3)) from the 
                employer in any calendar quarter during the previous 
                year.
            ``(4) Automatic enrollment; employee may elect not to 
        participate.--This paragraph is satisfied with respect to a 
        flexible retirement account that is part of a plan of an 
        employer if under the terms of the plan--
                    ``(A) each employee described in paragraph (3) 
                (without regard to paragraph (5))--
                            ``(i) may elect--
                                    ``(I) to have the employer make 
                                contributions on behalf of the employee 
                                to a flexible retirement account, or
                                    ``(II) to have such payments paid 
                                to the employee directly in cash, and
                            ``(ii) is deemed to have made the election 
                        under clause (i)(I), effective as of the first 
                        day of the first calendar quarter beginning 
                        after the employee becomes an employee 
                        described in paragraph (3), in an amount equal 
                        to 3 percent of the employee's compensation, 
                        until the employee specifically elects not to 
                        have such contributions made or to have 
                        contributions made in a different amount, and
                    ``(B) amounts contributed pursuant clause (i) or 
                (ii) of subparagraph (A) are invested in a diversified 
                common stock fund chosen by the financial institution 
                holding the flexible retirement account until the 
                employee specifically elects to direct such 
                contributions to a different investment option.
            ``(5) Inclusion of self-employed individuals.--For purposes 
        of this subsection, the term `employee' includes an employee as 
        defined in section 401(c)(1). For purposes of applying the 
        limitations of sections 402(h), 404(h), and 415(c)(1)(A) with 
        respect to an employee described in the preceding sentence, the 
        term `compensation' has the meaning given in subsection 
        (p)(6)(A)(ii).
            ``(6) Employer contributions.--The employer maintaining a 
        flexible retirement account may make qualified nonelective 
        contributions (as defined in section 401(m)(4)(C)) to the 
        flexible retirement accounts of employees described in 
        paragraph (3), but only if such contributions made with respect 
        to all such employees bear a uniform relationship to the 
        compensation of the employees.
            ``(7) Financial institutions.--This paragraph is satisfied 
        with respect to a flexible retirement account if--
                    ``(A) such account is maintained at a financial 
                institution, including a bank, credit union, insurance 
                company, broker or dealer registered with the 
                Securities and Exchange Commission, and such other 
                entities as the Secretary may by regulation designate,
                    ``(B) such financial institution--
                            ``(i) provides for not less than 3 
                        investment options among which the employee may 
                        choose to direct the contributions to and 
                        balances held in the employee's flexible 
                        retirement account, each of which is 
                        diversified and has materially different risk 
                        and return characteristics, and
                            ``(ii) provides a quarterly report to each 
                        employee with respect to whom it holds a 
                        flexible retirement account describing the 
                        contributions to the account, withdrawals from 
                        the account, and investment performance of the 
                        account, and
                    ``(C) the contributions to and balances held in the 
                flexible retirement account of an employee may not be 
                invested in securities of the employer maintaining such 
                account.''.
    (b) Limitation on Deductions by Employer.--Subsection (h) of 
section 404 of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``Pensions'' in the heading and inserting 
        ``Pensions and Flexible Retirement Accounts'',
            (2) by striking ``a simplified employee pension'' each 
        place it appears in paragraph (1) and inserting ``a simplified 
        employee pension or a flexible retirement account'', and
            (3) by striking ``For purposes of subsection (a)(7), a 
        simplified employee pension shall be treated as if it were'' in 
        paragraph (3) and inserting ``In the case of a simplified 
        employee pension or a flexible retirement account, section 
        (a)(7) shall be applied by treating such pension or account as 
        if it were''.
    (c) Taxability of Beneficiary.--Subsection (h) of section 402 of 
the Internal Revenue Code of 1986 is amended--
            (1) by striking ``Pensions'' in the heading and inserting 
        ``Pensions and Flexible Retirement Accounts'',
            (2) by striking ``408(k))'' in paragraph (1) and inserting 
        ``408(k)) or a flexible retirement account (as defined in 
        section 408(r))'',
            (3) by striking ``section 408(k)(6)'' in paragraph (1)(B) 
        and inserting ``subsection (k)(6) or (r)(4) of section 408'',
            (4) by striking ``the simplified employee pension'' each 
        place it appears in paragraphs (1)(B) and (2)(A) and inserting 
        ``the simplified employee pension or flexible retirement 
        account'',
            (5) by striking ``a simplified employee pension'' each 
        place it appears in paragraphs (2) and (3) and inserting ``a 
        simplified employee pension or flexible retirement account'', 
        and
            (6) by striking ``reduced in the case'' in paragraph (2)(B) 
        and inserting ``reduced, with respect to a simplified employee 
        pension, in the case''.
    (d) Conforming Amendments.--
            (1) Subparagraph (A) of section 219(g)(5) of the Internal 
        Revenue Code of 1986 is amended by striking ``or'' at the end 
        of clause (v) and by adding at the end the following new 
        clause:
                            ``(vii) a flexible retirement account 
                        (within the meaning of section 408(r)), or''.
            (2) Paragraph (6) of section 280G(b) of such Code is 
        amended by striking ``or'' at the end of subparagraph (C), by 
        striking the period at the end of subparagraph (D) and 
        inserting ``, or'', and by adding at the end the following new 
        subparagraph:
                    ``(E) a flexible retirement account (as defined in 
                section 408(r)).''.
            (3) Subsection (j) of section 408 of such Code is amended--
                    (A) by striking ``Pensions'' in the heading and 
                inserting ``Pensions and Flexible Retirement 
                Accounts'', and
                    (B) by striking ``pension,'' and inserting 
                ``pension or flexible retirement account,''.
            (4) Subsections (b), (c), (m)(4)(B), (n)(3)(B), and 
        (u)(1)(C) of section 414 of such Code are each amended by 
        inserting ``, 408(r)'' after ``408(p)''.
            (5) Paragraph (6) of section 414(u) of such Code is amended 
        by inserting ``, any flexible retirement account under section 
        408(r)'' after ``408(p)''.
            (6) Subparagraph (B) of section 414(v)(3) of such Code is 
        amended by inserting ``, 408(r)'' after ``408(k)''.
            (7) Clause (iv) of section 414(v)(6)(A) of such Code is 
        amended by striking ``(k) or (p)'' and inserting ``(k), (p), or 
        (r)''.
            (8) Paragraph (5) of section 414(w) of such Code is amended 
        by striking ``and'' at the end of subparagraph (D), by striking 
        the period at the end of subparagraph (E) and inserting ``, 
        and'', and by adding at the end the following new subparagraph:
                    ``(F) a flexible retirement account (as defined in 
                section 408(r)).''.
            (9) Paragraph (2) of section 415(a) of such Code is 
        amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (B),
                    (B) by striking the comma at the end of 
                subparagraph (C) and inserting ``, or'',
                    (C) by inserting after subparagraph (C) the 
                following new subparagraph:
                    ``(D) a flexible retirement account described in 
                section 408(r),'',
                    (D) by striking ``or pension'' and inserting 
                ``pension, or account'', and
                    (E) by striking ``or 408(k)'' and inserting 
                ``408(k), or 408(r)''.
            (10) Subparagraph (C) of section 3121(a)(5) of such Code is 
        amended by inserting ``, or a flexible retirement account (as 
        defined in section 408(r)'' after ``408(k)(6)''.
            (11) Subparagraph (C) of section 3306(a)(5) of such Code is 
        amended by inserting ``, or a flexible retirement account (as 
        defined in section 408(r)'' after ``408(k)(6)''.
            (12) Subparagraph (A) of section 4972(d)(1) of such Code is 
        amended by striking ``and'' at the end of clause (iii), by 
        striking the period at the end of clause (iv) and inserting ``, 
        and'', and by adding at the end the following new clause:
                            ``(v) any flexible retirement account 
                        (within the meaning of section 408(r)).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to contributions made after December 31, 2015.

SEC. 106. REPEAL OF SIMPLE PLANS AND SIMPLE IRAS.

    (a) Simple 401(k) Plans.--Paragraph (11) of section 401(k) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Termination.--This paragraph shall not apply 
                to any cash or deferred arrangement adopted after 
                December 31, 2016.''.
    (b) Simple IRAs.--Subsection (p) of section 408 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(11) Termination.--This subsection shall not apply to any 
        plan established after December 31, 2016.''.

SEC. 107. MODIFICATION OF RULES RELATING TO THE TERMINATION OF 
              PARTNERSHIPS AND S CORPORATIONS.

    (a) No Termination of Partnership on Sale or Exchange of Assets.--
            (1) In general.--Section 708(b)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``only if'' and all that 
        follows and inserting ``only if no part of any business, 
        financial operation, or venture of the partnership continues to 
        be carried on by any of its partners in a partnership.''.
            (2) Conforming amendments.--
                    (A) Section 168(i)(7)(B) of such Code is amended by 
                striking the last sentence.
                    (B) Section 743(e) of such Code is amended by 
                striking paragraph (4).
                    (C) Section 774 of such Code is amended by striking 
                subsection (c).
    (b) No Termination of S Corporation Status Due to Excessive Passive 
Investment Income.--Paragraph (3) of section 1362(d) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(D) Termination.--This paragraph shall not apply 
                to taxable years ending after the date of the enactment 
                of the Small Business Tax Compliance Relief Act of 
                2015.''.

SEC. 108. REPEAL OF SPECIAL RULES FOR TOP-HEAVY PLANS.

    Section 416 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
    ``(j) Termination.--This section shall not apply to plan years 
beginning after the date of the enactment of the Small Business Tax 
Compliance Relief Act of 2015.''.

      TITLE II--PROVISIONS RELATED TO THE INTERNAL REVENUE SERVICE

SEC. 201. REQUIREMENT TO CONVENE SMALL BUSINESS REVIEW PANELS.

    Section 609(d) of title 5, United States Code, is amended--
            (1) in paragraph (2), by striking ``and'' at the end;
            (2) in paragraph (3), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(4) the Internal Revenue Service.''.

SEC. 202. PENALTY WAIVERS IN CASES OF GOOD FAITH EFFORTS.

    The Commissioner of Internal Revenue may waive the application of 
any provision of the Internal Revenue Code of 1986 (other than a 
criminal penalty) if it is shown that the taxpayer acted in good faith 
or failure to comply with the provision was due to reasonable cause.

SEC. 203. INFLATION ADJUSTMENTS FOR CERTAIN PROVISIONS.

    (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. INFLATION ADJUSTMENTS.

    ``(a) In General.--In the case of any taxable year beginning in a 
calendar year after 2015, each of the specified dollar amounts shall be 
increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) 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 2014' for 
        `calendar year 1992' in subparagraph (B) thereof.
    ``(b) Specified Dollar Amounts.--For purposes of subsection (a), 
the specified dollar amounts are--
            ``(1) the $50,000 amount in section 79(a)(1),
            ``(2) each of the $5,250 amounts in section 127(a)(2),
            ``(3) each of the $500 amounts in paragraphs (11)(A), 
        (11)(B), and (12) of section 170(f),
            ``(4) the $5,000 amount in section 170(f)(11)(C),
            ``(5) the $10,000,000 amount in section 263A(b)(2),
            ``(6) each of the dollar amounts in section 274(b)(1),
            ``(7) each of the $400 amounts in section 274(j),
            ``(8) the $1,600 amount in section 274(j)(2)(B),
            ``(9) the $10,000,000 amount in section 1202(b)(1),
            ``(10) each of the $50,000,000 amounts in section 
        1202(d)(1),
            ``(11) the $50,000 amount in section 1244(b)(1), and
            ``(12) the $1,000,000 in section 1244(c)(3)(A).
    ``(c) Rounding.--
            ``(1) Any increase determined under paragraph (5), (9), or 
        (10) of subsection (b) shall be rounded to the nearest multiple 
        of $100,000.
            ``(2) Any increase determined under paragraph (1), (4), 
        (11), or (12) of subsection (b) shall be rounded to the nearest 
        multiple of $1,000.
            ``(3) Any increase determined under paragraph (2) of 
        subsection (b) shall be rounded to the nearest multiple of 
        $500.
            ``(4) Any increase determined under paragraph (3), (7), or 
        (8) of subsection (b) shall be rounded to the nearest multiple 
        of $100.
            ``(5) Any increase determined under paragraph (6) of 
        subsection (b) shall be rounded to the nearest multiple of 
        $5.''.
    (b) Conforming Amendments.--
            (1) Section 1202(b)(3) of such Code is amended by striking 
        ``paragraph (1)(A) shall be applied by substituting 
        `$5,000,000' for `$10,000,000''' and inserting ``the amount 
        under paragraph (1)(A) shall be 50 percent of such dollar 
        amount (determined without regard to this paragraph)''.
            (2) Section 1244(b)(2) of such Code is amended by striking 
        ``$100,000'' and inserting ``200 percent of the amount under 
        paragraph (1)''.
    (c) Clerical Amendment.--The table of sections for chapter 77 of 
such Code is amended by adding at the end the following new item:

``Sec. 7529. Inflation adjustments.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 204. REPORT ON UNIFORM DEFINITIONS.

    Not later than June 30, 2016, the Commissioner of Internal Revenue 
shall submit to the Committee on Small Business and Entrepreneurship of 
the Senate, the Committee on Finance of the Senate, and the Committee 
on Ways and Means of the House of Representatives a report detailing 
changes in law to make statutory definitions in the Internal Revenue 
Code of 1986 relating to small businesses consistent across different 
provisions of such Code. Such report shall include recommendations on 
wording such definitions in a manner that is easy to understand for a 
layman not familiar with the Internal Revenue Code of 1986.

SEC. 205. REPORT ON IMPROVEMENTS TO CUSTOMER SERVICE.

    Not later than June 30, 2016, the Commissioner of Internal Revenue 
shall submit to the Committee on Small Business and Entrepreneurship of 
the Senate, the Committee on Finance of the Senate, and the Committee 
on Ways and Means of the House of Representatives a report detailing 
specific ways to improve customer service to small businesses, 
including objectively measurable goals for how to reduce response 
times.

SEC. 206. REASONABLE CAUSE EXCEPTION FOR FAILURE TO REPORT CERTAIN 
              TRANSACTIONS.

    (a) In General.--Subsection (d) of section 6707A of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(d) Reasonable Cause Waiver.--No penalty shall be imposed under 
this section with respect to any failure if it is shown that such 
failure is due to reasonable cause and not to willful neglect.''.
    (b) Conforming Amendments.--
            (1) Section 6664(d)(3) of the Internal Revenue Code of 1986 
        is amended by striking ``if the penalty for such failure was 
        rescinded under section 6707A(d)'' and inserting ``if it is 
        shown that such failure is due to reasonable cause and not to 
        willful neglect''.
            (2) Section 6707(c) of such Code is amended to read as 
        follows:
    ``(c) Reasonable Cause Waiver.--No penalty shall be imposed under 
this section with respect to any failure if it is shown that such 
failure is due to reasonable cause and not to willful neglect.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 207. REASONABLE CAUSE EXCEPTION.

    (a) In General.--No assessable penalty or addition to tax shall be 
imposed under the Internal Revenue Code of 1986 if it is shown that an 
action, or failure to act, by the taxpayer with regard to any material 
element was due to reasonable cause and the taxpayer acted in good 
faith.
    (b) Coordination.--Subsection (a) shall not apply to any assessable 
penalty or addition to tax for which there is a provision of the 
Internal Revenue Code which provides for the nonapplication of such 
penalty or addition if the taxpayer's action (or failure to act) was 
due to reasonable cause.

SEC. 208. RETURN DUE DATE MODIFICATIONS.

    (a) New Due Date for Partnership Form 1065, S Corporation Form 
1120S, and C Corporation Form 1120.--
            (1) Partnerships.--
                    (A) In general.--Section 6072 of the Internal 
                Revenue Code of 1986 is amended by adding at the end 
                the following new subsection:
    ``(f) Returns of Partnerships.--Returns of partnerships under 
section 6031 made on the basis of the calendar year shall be filed on 
or before the 15th day of March following the close of the calendar 
year, and such returns made on the basis of a fiscal year shall be 
filed on or before the 15th day of the third month following the close 
of the fiscal year.''.
                    (B) Conforming amendment.--Section 6072(a) of such 
                Code is amended by striking ``6017, or 6031'' and 
                inserting ``or 6017''.
            (2) S corporations.--
                    (A) In general.--So much of subsection (b) of 6072 
                of such Code as precedes the second sentence thereof is 
                amended to read as follows:
    ``(b) Returns of Certain Corporations.--Returns of S corporations 
under sections 6012 and 6037 made on the basis of the calendar year 
shall be filed on or before the 31st day of March following the close 
of the calendar year, and such returns made on the basis of a fiscal 
year shall be filed on or before the last day of the third month 
following the close of the fiscal year.''.
                    (B) Conforming amendments.--
                            (i) Section 1362(b) of such Code is 
                        amended--
                                    (I) by striking ``15th'' each place 
                                it appears and inserting ``last'',
                                    (II) by striking ``2\1/2\'' each 
                                place it appears and inserting ``3'', 
                                and
                                    (III) by striking ``2 months and 15 
                                days'' in paragraph (4) and inserting 
                                ``3 months''.
                            (ii) Section 1362(d)(1)(C)(i) of such Code 
                        is amended by striking ``15th'' and inserting 
                        ``last''.
                            (iii) Section 1362(d)(1)(C)(ii) of such 
                        Code is amended by striking ``such 15th day'' 
                        and inserting ``the last day of the 3d month 
                        thereof''.
            (3) Conforming amendments relating to c corporations.--
                    (A) Section 170(a)(2)(B) of such Code is amended by 
                striking ``third month'' and inserting ``4th month''.
                    (B) Section 563 of such Code is amended by striking 
                ``third month'' each place it appears and inserting 
                ``4th month''.
                    (C) Section 1354(d)(1)(B)(i) of such Code is 
                amended by striking ``3d month'' and inserting ``4th 
                month''.
                    (D) Subsections (a) and (c) of section 6167 of such 
                Code are each amended by striking ``third month'' and 
                inserting ``4th month''.
                    (E) Section 6425(a)(1) of such Code is amended by 
                striking ``third month'' and inserting ``4th month''.
                    (F) Subsections (b)(2)(A), (g)(3), and (h)(1) of 
                section 6655 of such Code are each amended by striking 
                ``3rd month'' and inserting ``4th month''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to returns for taxable years beginning after 
        December 31, 2015.
    (b) Modification of Due Dates by Regulation.--In the case of 
returns for taxable years beginning after December 31, 2013, the 
Secretary of the Treasury or the Secretary's delegate shall modify 
appropriate regulations to provide as follows:
            (1) The maximum extension for the returns of partnerships 
        filing Form 1065 shall be a 6-month period beginning on the due 
        date for filing the return (without regard to any extensions).
            (2) The maximum extension for the returns of trusts and 
        estates filing Form 1041 shall be a 5\1/2\-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (3) The maximum extension for the returns of employee 
        benefit plans filing Form 5500 shall be an automatic 3\1/2\-
        month period beginning on the due date for filing the return 
        (without regard to any extensions).
            (4) The maximum extension for the Forms 990 (series) 
        returns of organizations exempt from income tax shall be an 
        automatic 6-month period beginning on the due date for filing 
        the return (without regard to any extensions).
            (5) The maximum extension for the returns of organizations 
        exempt from income tax that are required to file Form 4720 
        returns of excise taxes shall be an automatic 6-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (6) The maximum extension for the returns of trusts 
        required to file Form 5227 shall be an automatic 6-month period 
        beginning on the due date for filing the return (without regard 
        to any extensions).
            (7) The maximum extension for the returns of Black Lung 
        Benefit Trusts required to file Form 6069 returns of excise 
        taxes shall be an automatic 6-month period beginning on the due 
        date for filing the return (without regard to any extensions).
            (8) The maximum extension for a taxpayer required to file 
        Form 8870 shall be an automatic 6-month period beginning on the 
        due date for filing the return (without regard to any 
        extensions).
            (9) The due date of Form 3520-A, Annual Information Return 
        of a Foreign Trust with a United States Owner, shall be the 
        15th day of the 4th month after the close of the trust's 
        taxable year, and the maximum extension shall be a 6-month 
        period beginning on such day.
            (10) The due date of FinCEN Form 114 (relating to Report of 
        Foreign Bank and Financial Accounts) shall be April 15 with a 
        maximum extension for a 6-month period ending on October 15, 
        and with provision for an extension under rules similar to the 
        rules of 26 C.F.R. 1.6081-5. For any taxpayer required to file 
        such form for the first time, the Secretary of the Treasury may 
        waive any penalty for failure to timely request or file an 
        extension.
            (11) Taxpayers filing Form 3520, Annual Return to Report 
        Transactions with Foreign Trusts and Receipt of Certain Foreign 
        Gifts, shall be allowed to extend the time for filing such form 
        separately from the income tax return of the taxpayer, for an 
        automatic 6-month period beginning on the due date for filing 
        the return (without regard to any extensions).
    (c) Corporations Permitted Statutory Automatic 6-Month Extension of 
Income Tax Returns.--
            (1) In general.--Section 6081(b) of the Internal Revenue 
        Code of 1986 is amended by striking ``3 months'' and inserting 
        ``6 months''.
            (2) Effective date.--The amendment made by this section 
        shall apply to returns for taxable years beginning after 
        December 31, 2015.

          TITLE III--PROVISIONS RELATED TO START-UP BUSINESSES

SEC. 301. MODIFICATION OF APPLICATION OF RULES FOR NONQUALIFIED 
              DEFERRED COMPENSATION PLANS.

    (a) Rules Only Apply to Plans of Publicly Traded Companies.--
            (1) In general.--Section 409A of the Internal Revenue Code 
        of 1986 is amended by striking ``nonqualified deferred 
        compensation plan'' each place it appears and inserting 
        ``specified nonqualified deferred compensation plan''.
            (2) Specified nonqualified deferred compensation plan.--
        Section 409A(d)(1) of such Code is amended to read as follows:
            ``(1) Specified nonqualified deferred compensation plan.--
                    ``(A) In general.--The term `specified nonqualified 
                deferred compensation plan' means any plan maintained 
                by a specified employer for the deferral of 
                compensation, other than--
                            ``(i) a qualified employer plan, and
                            ``(ii) any bona fide vacation leave, sick 
                        leave, compensatory time, disability pay, or 
                        death benefit plan.
                    ``(B) Specified employer.--For purposes of 
                subparagraph (A), the term `specified employer' means 
                any corporation--
                            ``(i) the stock of which is publicly traded 
                        on an established securities market or 
                        otherwise, or
                            ``(ii) which is a member of a controlled 
                        group of corporations (within the meaning of 
                        section 1563(a), determined without regard to 
                        section 1563(a)(4)) one of which is publicly 
                        traded on an established securities market.''.
    (b) Conforming Amendments.--
            (1) The last sentence of section 409A(a)(2)(B)(i) of the 
        Internal Revenue Code of 1986 is amended to read as follows: 
        ``For purposes of the preceding sentence, a specified employee 
        is a key employee (as defined in section 416(i) without regard 
        to paragraph (5) thereof) of the employer.''.
            (2) The heading of section 409A of such Code is amended by 
        inserting ``specified'' before ``nonqualified''.
            (3) The item relating to section 409A in the table of 
        sections for subpart A of part I of subchapter D of chapter 1 
        of such Code is by inserting ``specified'' before 
        ``nonqualified''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts deferred after the date of the enactment of this Act.

SEC. 302. REDUCTION IN HOLDING PERIOD FOR QUALIFIED SMALL BUSINESS 
              STOCK.

    (a) In General.--Paragraph (1) of section 1202(a) of the Internal 
Revenue Code of 1986 is amended by striking ``5 years'' and inserting 
``3 years''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1202(b) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years'',
            (2) Subparagraph (A) of section 1202(g)(2) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years'',
            (3) Subparagraph (C) of section 1202(h)(2) of such Code is 
        amended by striking ``5-year'' and inserting ``3-year'', and
            (4) Subparagraph (A) of section 1202(j)(1) of such Code is 
        amended by striking ``5 years'' and inserting ``3 years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock issued after the date of the enactment of this Act.

SEC. 303. EXTENSION OF ROLLOVER PERIOD FOR QUALIFIED SMALL BUSINESS 
              STOCK.

    (a) In General.--Paragraph (1) of section 1045(a) of the Internal 
Revenue Code of 1986 is amended by striking ``60-day period'' and 
inserting ``1-year period''.
    (b) Conforming Amendment.--Paragraph (3) of section 1045(b) of such 
Code is amended by striking ``60-day period'' and inserting ``1-year 
period''.
    (c) Effective Date.--The amendment made by this section shall apply 
to sales after the date of the enactment of this Act.
                                 <all>