[Congressional Record Volume 151, Number 100 (Thursday, July 21, 2005)]
[Senate]
[Pages S8672-S8678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Baucus):
  S. 1447. A bill to amend the Internal Revenue Code of 1986 to make 
technical corrections, and for other purposes; to the Committee on 
Finance.
  Mr. GRASSLEY. Mr. President, Today I am pleased to introduce the Tax 
Technical Corrections Act of 2005 with Senator Baucus.
  Technical corrections measures are routine for major tax acts, and 
are necessary to ensure that the provisions of the acts are working 
consistently with the originally enacted provisions, or to provide 
clerical corrections. Because these measures carry out Congressional 
intent, no revenue gain or loss is scored from them.
  Technical corrections are derived from a deliberative and 
consultative process among the Congressional and administration tax 
staffs. That means the Republican and Democratic staffs of the House 
Ways and Means and Senate Finance Committees are involved as is the 
Treasury Department staff. All of this work is performed with the 
participation and guidance of the non-partisan Joint Committee on 
Taxation staff. A technical enters the list only if all staffs agree it 
is appropriate.
  The process and test for technical corrections ensures that only 
provisions narrowly drawn to carry out Congressional intent are 
included.
  Unfortunately, some press reports have distorted the technical 
corrections bill. These reports unfairly characterize this technical 
corrections bill as a re-opening of substantive tax policy of settled 
tax legislation.
  While it is true that interested parties are heard on purported 
technical corrections, only measures that all staffs agree are purely 
technical are included in the bill. Clarifications or substantive 
changes to provisions are not considered technical corrections. This is 
an important distinction that the press reports unfortunately did not 
make.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1447

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Technical Corrections Act of 2005''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Amendments related to the American Jobs Creation Act of 2004.
Sec. 3. Amendments related to the Working Families Tax Relief Act of 
              2004.
Sec. 4. Amendments related to the Jobs and Growth Tax Relief 
              Reconciliation Act of 2003.
Sec. 5. Amendment related to the Victims of Terrorism Tax Relief Act of 
              2001.
Sec. 6. Amendment related to the Transportation Equity Act for the 21st 
              Century.
Sec. 7. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 8. Clerical corrections.
Sec. 9. Other corrections related to the American Jobs Creation Act of 
              2004.

     SEC. 2. AMENDMENTS RELATED TO THE AMERICAN JOBS CREATION ACT 
                   OF 2004.

       (a) Amendments Related to Section 102 of the Act.--
       (1) Paragraph (1) of section 199(b) is amended by striking 
     ``the employer'' and inserting ``the taxpayer''.
       (2) Paragraph (2) of section 199(b) is amended to read as 
     follows:
       ``(2) W-2 wages.--For purposes of this section, the term 
     `W-2 wages' means, with respect to any person for any taxable 
     year of such person, the sum of the amounts described in 
     paragraphs (3) and (8) of section 6051(a) paid by such person 
     with respect to employment of employees by such person during 
     the calendar year ending during such taxable year. Such term 
     shall not include any amount which is not properly included 
     in a return filed with the Social Security Administration on 
     or before the 60th day after the due date (including 
     extensions) for such return.''.
       (3) Subparagraph (B) of section 199(c)(1) is amended by 
     inserting ``and'' at the end of clause (i), by striking 
     clauses (ii) and (iii), and by inserting after clause (i) the 
     following:
       ``(ii) other expenses, losses, or deductions (other than 
     the deduction allowed under this section), which are properly 
     allocable to such receipts.''.
       (4) Paragraph (2) of section 199(c) is amended to read as 
     follows:
       ``(2) Allocation method.--The Secretary shall prescribe 
     rules for the proper allocation of items described in 
     paragraph (1) for purposes of determining qualified 
     production activities income. Such rules shall provide for 
     the proper allocation of items whether or not such items are 
     directly allocable to domestic production gross receipts.''.
       (5) Subparagraph (A) of section 199(c)(4) is amended by 
     striking clauses (ii) and (iii) and inserting the following 
     new clauses:
       ``(ii) in the case of a taxpayer engaged in the active 
     conduct of a construction trade or business, construction of 
     real property performed in the United States by the taxpayer 
     in the ordinary course of such trade or business, or
       ``(iii) in the case of a taxpayer engaged in the active 
     conduct of an engineering or architectural services trade or 
     business, engineering or architectural services performed in 
     the United States by the taxpayer in the ordinary course of 
     such trade or business with respect to the construction of 
     real property in the United States.''.
       (6) Subparagraph (B) of section 199(c)(4) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, or'', and 
     by adding at the end the following:
       ``(iii) the lease, rental, license, sale, exchange, or 
     other disposition of land.''.
       (7) Paragraph (4) of section 199(c) is amended by adding at 
     the end the following new subparagraphs:
       ``(C) Special rule for certain government contracts.--Gross 
     receipts derived from the manufacture or production of any 
     property described in subparagraph (A)(i)(I) shall be treated 
     as meeting the requirements of subparagraph (A)(i) if--
       ``(i) such property is manufactured or produced by the 
     taxpayer pursuant to a contract with the Federal Government, 
     and
       ``(ii) the Federal Acquisition Regulation requires that 
     title or risk of loss with respect to such property be 
     transferred to the Federal Government before the manufacture 
     or production of such property is complete.
       ``(D) Partnerships owned by expanded affiliated groups.--
     For purposes of this

[[Page S8673]]

     paragraph, if all of the interests in the capital and profits 
     of a partnership are owned by members of a single expanded 
     affiliated group at all times during the taxable year of such 
     partnership, the partnership and all members of such group 
     shall be treated as a single taxpayer during such period.''.
       (8) Paragraph (1) of section 199(d) is amended to read as 
     follows:
       ``(1) Application of section to pass-thru entities.--
       ``(A) Partnerships and s corporations.--In the case of a 
     partnership or S corporation--
       ``(i) this section shall be applied at the partner or 
     shareholder level,
       ``(ii) each partner or shareholder shall take into account 
     such person's allocable share of each item described in 
     subparagraph (A) or (B) of subsection (c)(1) (determined 
     without regard to whether the items described in such 
     subparagraph (A) exceed the items described in such 
     subparagraph (B)), and
       ``(iii) each partner or shareholder shall be treated for 
     purposes of subsection (b) as having W-2 wages for the 
     taxable year in an amount equal to the lesser of--

       ``(I) such person's allocable share of the W-2 wages of the 
     partnership or S corporation for the taxable year (as 
     determined under regulations prescribed by the Secretary), or
       ``(II) 2 times 9 percent of so much of such person's 
     qualified production activities income as is attributable to 
     items allocated under clause (ii) for the taxable year.

       ``(B) Trusts and estates.--In the case of a trust or 
     estate--
       ``(i) the items referred to in subparagraph (A)(ii) (as 
     determined therein) and the W-2 wages of the trust or estate 
     for the taxable year, shall be apportioned between the 
     beneficiaries and the fiduciary (and among the beneficiaries) 
     under regulations prescribed by the Secretary, and
       ``(ii) for purposes of paragraph (2), adjusted gross income 
     of the trust or estate shall be determined as provided in 
     section 67(e) with the adjustments described in such 
     paragraph.
       ``(C) Regulations.--The Secretary may prescribe rules 
     requiring or restricting the allocation of items and wages 
     under this paragraph and may prescribe such reporting 
     requirements as the Secretary determines appropriate.''.
       (9) Paragraph (3) of section 199(d) is amended to read as 
     follows:
       ``(3) Agricultural and horticultural cooperatives.--
       ``(A) Deduction allowed to patrons.--Any person who 
     receives a qualified payment from a specified agricultural or 
     horticultural cooperative shall be allowed for the taxable 
     year in which such payment is received a deduction under 
     subsection (a) equal to the portion of the deduction allowed 
     under subsection (a) to such cooperative which is--
       ``(i) allowed with respect to the portion of the qualified 
     production activities income to which such payment is 
     attributable, and
       ``(ii) identified by such cooperative in a written notice 
     mailed to such person during the payment period described in 
     section 1382(d).
       ``(B) Cooperative denied deduction for portion of qualified 
     payments.--The taxable income of a specified agricultural or 
     horticultural cooperative shall not be reduced under section 
     1382 by reason of that portion of any qualified payment as 
     does not exceed the deduction allowable under subparagraph 
     (A) with respect to such payment.
       ``(C) Taxable income of cooperatives determined without 
     regard to certain deductions.--For purposes of this section, 
     the taxable income of a specified agricultural or 
     horticultural cooperative shall be computed without regard to 
     any deduction allowable under subsection (b) or (c) of 
     section 1382 (relating to patronage dividends, per-unit 
     retain allocations, and nonpatronage distributions).
       ``(D) Special rule for marketing cooperatives.--For 
     purposes of this section, a specified agricultural or 
     horticultural cooperative described in subparagraph (F)(ii) 
     shall be treated as having manufactured, produced, grown, or 
     extracted in whole or significant part any qualifying 
     production property marketed by the organization which its 
     patrons have so manufactured, produced, grown, or extracted.
       ``(E) Qualified payment.--For purposes of this paragraph, 
     the term `qualified payment' means, with respect to any 
     person, any amount which--
       ``(i) is described in paragraph (1) or (3) of section 
     1385(a),
       ``(ii) is received by such person from a specified 
     agricultural or horticultural cooperative, and
       ``(iii) is attributable to qualified production activities 
     income with respect to which a deduction is allowed to such 
     cooperative under subsection (a).
       ``(F) Specified agricultural or horticultural 
     cooperative.--For purposes of this paragraph, the term 
     `specified agricultural or horticultural cooperative' means 
     an organization to which part I of subchapter T applies which 
     is engaged--
       ``(i) in the manufacturing, production, growth, or 
     extraction in whole or significant part of any agricultural 
     or horticultural product, or
       ``(ii) in the marketing of agricultural or horticultural 
     products.''.
       (10) Clause (i) of section 199(d)(4)(B) is amended--
       (A) by striking ``50 percent'' and inserting ``more than 50 
     percent'', and
       (B) by striking ``80 percent'' and inserting ``at least 80 
     percent''.
       (11)(A) Paragraph (6) of section 199(d) is amended to read 
     as follows:
       ``(6) Coordination with minimum tax.--For purposes of 
     determining alternative minimum taxable income under section 
     55--
       ``(A) the deduction under this section shall be determined 
     without regard to any adjustments under sections 56 through 
     59, and
       ``(B) in the case of a corporation, subsection (a)(1)(B) 
     shall be applied by substituting `alternative minimum taxable 
     income' for `taxable income'.''.
       (B) Paragraph (2) of section 199(a) is amended by striking 
     ``subsections (d)(1) and (d)(6)'' and inserting ``subsection 
     (d)(1)''.
       (12) Subsection (d) of section 199 is amended by 
     redesignating paragraph (7) as paragraph (8) and by inserting 
     after paragraph (6) the following new paragraph:
       ``(7) Unrelated business taxable income.--For purposes of 
     determining the tax imposed by section 511, subsection 
     (a)(1)(B) shall be applied by substituting `unrelated 
     business taxable income' for `taxable income'.''.
       (13) Subsection (d) of section 199, as amended by the 
     preceding paragraphs of this subsection, is further amended 
     by redesignating paragraph (8) as paragraph (9) and by 
     inserting after paragraph (7) the following new paragraph:
       ``(8) Coordination with carryover of net operating loss.--
     The deduction allowable under this section shall not be taken 
     into account for purposes of computing taxable income under 
     section 172(b)(2).''.
       (14) Paragraph (9) of section 199(d), as redesignated by 
     the preceding paragraphs of this subsection, is amended by 
     inserting ``, including regulations which prevent more than 1 
     taxpayer from being allowed a deduction under this section 
     with respect to any activity described in subsection 
     (c)(4)(A)(i)'' before the period at the end.
       (15) Clause (i) of section 163(j)(6)(A) is amended by 
     striking ``and'' at the end of subclause (II), by 
     redesignating subclause (III) as subclause (IV), and by 
     inserting after subclause (II) the following new subclause:

       ``(III) any deduction allowable under section 199, and''.

       (16) Paragraph (2) of section 170(b) is amended by 
     redesignating subparagraphs (C) and (D) as subparagraphs (D) 
     and (E), respectively, and by inserting after subparagraph 
     (B) the following new subparagraph:
       ``(C) section 199,''.
       (17) Paragraph (1) of section 613A(d) is amended by 
     redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively, and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) any deduction allowable under section 199,''.
       (18) Subsection (e) of section 102 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(e) Effective Date.--
       ``(1) In general.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.
       ``(2) Application to pass-thru entities, etc.--In 
     determining the deduction under section 199 of the Internal 
     Revenue Code of 1986 (as added by this section), items 
     arising from a taxable year of a partnership, S corporation, 
     estate, or trust beginning before January 1, 2005, shall not 
     be taken into account for purposes of subsection (d)(1) of 
     such section.''.
       (b) Amendments Related to Section 231 of the Act.--
       (1) Clause (ii) of section 1361(c)(1)(A) is amended by 
     inserting ``(and their estates)'' after ``all members of the 
     family''.
       (2) Subparagraph (C) of section 1361(c)(1) is amended to 
     read as follows:
       ``(C) Effect of adoption, etc.--For purposes of this 
     paragraph, any legally adopted child of an individual, any 
     child who is lawfully placed with an individual for legal 
     adoption by the individual, and any eligible foster child of 
     an individual (within the meaning of section 152(f)(1)(C)), 
     shall be treated as a child of such individual by blood.''.
       (c) Amendment Related to Section 235 of the Act.--
     Subsection (b) of section 235 of the American Jobs Creation 
     Act of 2004 is amended by striking ``taxable years 
     beginning'' and inserting ``transfers''.
       (d) Amendments Related to Section 243 of the Act.--
       (1) Paragraph (7) of section 856(c) is amended to read as 
     follows:
       ``(7) Rules of application for failure to satisfy paragraph 
     (4).--
       ``(A) In general.--A corporation, trust, or association 
     that fails to meet the requirements of paragraph (4) (other 
     than a failure to meet the requirements of paragraph 
     (4)(B)(iii) which is described in subparagraph (B)(i) of this 
     paragraph) for a particular quarter shall nevertheless be 
     considered to have satisfied the requirements of such 
     paragraph for such quarter if--
       ``(i) following the corporation, trust, or association's 
     identification of the failure to satisfy the requirements of 
     such paragraph for a particular quarter, a description of 
     each asset that causes the corporation, trust, or association 
     to fail to satisfy the requirements of such paragraph at the 
     close of such quarter of any taxable year is set forth in a 
     schedule for such quarter filed in accordance with 
     regulations prescribed by the Secretary,
       ``(ii) the failure to meet the requirements of such 
     paragraph for a particular quarter is due to reasonable cause 
     and not due to willful neglect, and

[[Page S8674]]

       ``(iii)(I) the corporation, trust, or association disposes 
     of the assets set forth on the schedule specified in clause 
     (i) within 6 months after the last day of the quarter in 
     which the corporation, trust or association's identification 
     of the failure to satisfy the requirements of such paragraph 
     occurred or such other time period prescribed by the 
     Secretary and in the manner prescribed by the Secretary, or
       ``(II) the requirements of such paragraph are otherwise met 
     within the time period specified in subclause (I).
       ``(B) Rule for certain de minimis failures.--A corporation, 
     trust, or association that fails to meet the requirements of 
     paragraph (4)(B)(iii) for a particular quarter shall 
     nevertheless be considered to have satisfied the requirements 
     of such paragraph for such quarter if--
       ``(i) such failure is due to the ownership of assets the 
     total value of which does not exceed the lesser of--

       ``(I) 1 percent of the total value of the trust's assets at 
     the end of the quarter for which such measurement is done, 
     and
       ``(II) $10,000,000, and

       ``(ii)(I) the corporation, trust, or association, following 
     the identification of such failure, disposes of assets in 
     order to meet the requirements of such paragraph within 6 
     months after the last day of the quarter in which the 
     corporation, trust or association's identification of the 
     failure to satisfy the requirements of such paragraph 
     occurred or such other time period prescribed by the 
     Secretary and in the manner prescribed by the Secretary, or
       ``(II) the requirements of such paragraph are otherwise met 
     within the time period specified in subclause (I).
       ``(C) Tax.--
       ``(i) Tax imposed.--If subparagraph (A) applies to a 
     corporation, trust, or association for any taxable year, 
     there is hereby imposed on such corporation, trust, or 
     association a tax in an amount equal to the greater of--

       ``(I) $50,000, or
       ``(II) the amount determined (pursuant to regulations 
     promulgated by the Secretary) by multiplying the net income 
     generated by the assets described in the schedule specified 
     in subparagraph (A)(i) for the period specified in clause 
     (ii) by the highest rate of tax specified in section 11.

       ``(ii) Period.--For purposes of clause (i)(II), the period 
     described in this clause is the period beginning on the first 
     date that the failure to satisfy the requirements of such 
     paragraph (4) occurs as a result of the ownership of such 
     assets and ending on the earlier of the date on which the 
     trust disposes of such assets or the end of the first quarter 
     when there is no longer a failure to satisfy such paragraph 
     (4).
       ``(iii) Administrative provisions.--For purposes of 
     subtitle F, the taxes imposed by this subparagraph shall be 
     treated as excise taxes with respect to which the deficiency 
     procedures of such subtitle apply.''.
       (2) Subsection (m) of section 856 is amended by adding at 
     the end the following new paragraph:
       ``(6) Transition rule.--
       ``(A) In general.--Notwithstanding paragraph (2)(C), 
     securities held by a trust shall not be considered securities 
     held by the trust for purposes of subsection 
     (c)(4)(B)(iii)(III) if such securities--
       ``(i) were held by such trust on October 22, 2004, and 
     continuously thereafter, and
       ``(ii) would not be taken into account for purposes of such 
     subsection by reason of paragraph (7)(C) of subsection (c) 
     (as in effect on October 22, 2004) if the amendments made by 
     section 243 of the American Jobs Creation Act of 2004 had 
     never been enacted.
       ``(B) Rule not to apply to securities held after maturity 
     date.--Subparagraph (A) shall not apply with respect to any 
     security after the latest maturity date under the contract 
     (as in effect on October 22, 2004) taking into account any 
     renewal or extension permitted under the contract if such 
     renewal or extension does not significantly modify any other 
     terms of the contract.
       ``(C) Successors.--If the successor of a trust to which 
     this paragraph applies acquires securities in a transaction 
     to which section 381 applies, such trusts shall be treated as 
     a single entity for purposes of determining the holding 
     period of such securities under subparagraph (A)(i).''.
       (3) Subparagraph (E) of section 857(b)(2) is amended by 
     striking ``section 856(c)(7)(B)(iii), and section 
     856(g)(1).'' and inserting ``section 856(c)(7)(C), and 
     section 856(g)(5)''.
       (4) Subsection (g) of section 243 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(g) Effective Dates.--
       ``(1) Subsections (a) and (b).--The amendments made by 
     subsections (a) and (b) shall apply to taxable years 
     beginning after December 31, 2000.
       ``(2) Subsections (c) and (e).--The amendments made by 
     subsections (c) and (e) shall apply to taxable years 
     beginning after the date of the enactment of this Act.
       ``(3) Subsection (d).--The amendment made by subsection (d) 
     shall apply to transactions entered into after December 31, 
     2004.
       ``(4) Subsection (f).--
       ``(A) The amendment made by paragraph (1) of subsection (f) 
     shall apply to failures with respect to which the 
     requirements of subparagraph (A) or (B) of section 856(c)(7) 
     of the Internal Revenue Code of 1986 (as added by such 
     paragraph) are satisfied after the date of the enactment of 
     this Act.
       ``(B) The amendment made by paragraph (2) of subsection (f) 
     shall apply to failures with respect to which the 
     requirements of paragraph (6) of section 856(c) of the 
     Internal Revenue Code of 1986 (as amended by such paragraph) 
     are satisfied after the date of the enactment of this Act.
       ``(C) The amendments made by paragraph (3) of subsection 
     (f) shall apply to failures with respect to which the 
     requirements of paragraph (5) of section 856(g) of the 
     Internal Revenue Code of 1986 (as added by such paragraph) 
     are satisfied after the date of the enactment of this Act.
       ``(D) The amendment made by paragraph (4) of subsection (f) 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
       ``(E) The amendments made by paragraph (5) of subsection 
     (f) shall apply to statements filed after the date of the 
     enactment of this Act.''.
       (e) Amendments Related to Section 244 of the Act.--
       (1) Paragraph (2) of section 181(d) is amended by striking 
     the last sentence in subparagraph (A), by redesignating 
     subparagraph (B) as subparagraph (C), and by inserting after 
     subparagraph (A) the following new subparagraph:
       ``(B) Special rules for television series.--In the case of 
     a television series--
       ``(i) each episode of such series shall be treated as a 
     separate production, and
       ``(ii) only the first 44 episodes of such series shall be 
     taken into account.''.
       (2) Subparagraph (C) of section 1245(a)(2) is amended by 
     inserting ``181,'' after ``179B,''.
       (f) Amendment Related to Section 245 of the Act.--
     Subsection (b) of section 45G is amended to read as follows:
       ``(b) Limitation.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the product of--
       ``(1) $3,500, and
       ``(2) the sum of--
       ``(A) the number of miles of railroad track owned or leased 
     by the eligible taxpayer as of the close of the taxable year, 
     and
       ``(B) the number of miles of railroad track assigned for 
     purposes of this subsection to the eligible taxpayer by a 
     Class II or Class III railroad which owns or leases such 
     railroad track as of the close of the taxable year.
     Any mile which is assigned by a taxpayer under paragraph 
     (2)(B) may not be taken into account by such taxpayer under 
     paragraph (2)(A).''.
       (g) Amendments Related to Section 248 of the Act.--
       (1) Subsection (c) of section 1356 is amended--
       (A) by striking paragraph (3), and
       (B) by adding at the end of paragraph (2) the following new 
     flush sentence:
       ``Such term shall not include any core qualifying 
     activities.''.
       (2) The last sentence of section 1354(b) is amended by 
     inserting ``on or'' after ``only if made''.
       (h) Amendment Related to Section 301 of the Act.--Section 
     6427 is amended by striking subsection (f).
       (i) Amendment Related to Section 314 of the Act.--Paragraph 
     (2) of section 55(c) is amended by striking ``regular tax'' 
     and inserting ``regular tax liability''.
       (j) Amendments Related to Section 322 of the Act.--
       (1) Subparagraph (C) of section 49(a)(1) is amended by 
     inserting ``and'' at the end of clause (i), by striking 
     ``and'' at the end of clause (ii), and by striking clause 
     (iii).
       (2)(A) Subparagraph (B) of section 194(b)(1) is amended to 
     read as follows:
       ``(B) Dollar limitation.--The aggregate amount of 
     reforestation expenditures which may be taken into account 
     under subparagraph (A) with respect to each qualified timber 
     property for any taxable year shall not exceed--
       ``(i) except as provided in clause (ii) or (iii), $10,000,
       ``(ii) in the case of a separate return by a married 
     individual (as defined in section 7703), $5,000, and
       ``(iii) in the case of a trust, zero.''.
       (B) Paragraph (4) of section 194(c) is amended to read as 
     follows:
       ``(4) Treatment of trusts and estates.--The aggregate 
     amount of reforestation expenditures incurred by any trust or 
     estate shall be apportioned between the income beneficiaries 
     and the fiduciary under regulations prescribed by the 
     Secretary. Any amount so apportioned to a beneficiary shall 
     be taken into account as expenditures incurred by such 
     beneficiary in applying this section to such beneficiary.''.
       (3) Subparagraph (C) of section 1245(a)(2) is amended by 
     striking ``or 193'' and inserting ``193, or 194''.
       (k) Amendments Related to Section 336 of the Act.--
       (1) Clause (iv) of section 168(k)(2)(A) is amended by 
     striking ``subparagraphs (B) and (C)'' and inserting 
     ``subparagraph (B) or (C)''.
       (2) Clause (iii) of section 168(k)(4)(B) is amended by 
     striking ``and paragraph (2)(C)'' and inserting ``or 
     paragraph (2)(C) (as so modified)''.
       (l) Amendment Related to Section 402 of the Act.--Paragraph 
     (2) of section 904(g) is amended to read as follows:
       ``(2) Overall domestic loss.--For purposes of this 
     subsection--
       ``(A) In general.--The term `overall domestic loss' means--
       ``(i) with respect to any qualified taxable year, the 
     domestic loss for such taxable year to the extent such loss 
     offsets taxable income from sources without the United

[[Page S8675]]

     States for the taxable year or for any preceding qualified 
     taxable year by reason of a carryback, and
       ``(ii) with respect to any other taxable year, the domestic 
     loss for such taxable year to the extent such loss offsets 
     taxable income from sources without the United States for any 
     preceding qualified taxable year by reason of a carryback.
       ``(B) Domestic loss.--For purposes of subparagraph (A), the 
     term `domestic loss' means the amount by which the gross 
     income for the taxable year from sources within the United 
     States is exceeded by the sum of the deductions properly 
     apportioned or allocated thereto (determined without regard 
     to any carryback from a subsequent taxable year).
       ``(C) Qualified taxable year.--For purposes of subparagraph 
     (A), the term `qualified taxable year' means any taxable year 
     for which the taxpayer chose the benefits of this subpart.''.
       (m) Amendment Related to Section 403 of the Act.--Section 
     403 of the American Jobs Creation Act of 2004 is amended by 
     adding at the end the following new subsection:
       ``(d) Transition Rule.--If the taxpayer elects (at such 
     time and in such form and manner as the Secretary of the 
     Treasury may prescribe) to have the rules of this subsection 
     apply--
       ``(1) the amendments made by this section shall not apply 
     to taxable years beginning after December 31, 2002, and 
     before January 1, 2005, and
       ``(2) in the case of taxable years beginning after December 
     31, 2004, clause (iv) of section 904(d)(4)(C) of the Internal 
     Revenue Code of 1986 (as amended by this section) shall be 
     applied by substituting `January 1, 2005' for `January 1, 
     2003' both places it appears.''.
       (n) Amendments Related to Section 413 of the Act.--
       (1) Subsection (b) of section 532 is amended by striking 
     paragraph (2) and redesignating paragraphs (3) and (4) as 
     paragraphs (2) and (3), respectively.
       (2) Subsection (b) of section 535 is amended by adding at 
     the end the following new paragraph:
       ``(10) Controlled foreign corporations.--There shall be 
     allowed as a deduction the amount of the corporation's income 
     for the taxable year which is included in the gross income of 
     a United States shareholder under section 951(a). In the case 
     of any corporation the accumulated taxable income of which 
     would (but for this sentence) be determined without allowance 
     of any deductions, the deduction under this paragraph shall 
     be allowed and shall be appropriately adjusted to take into 
     account any deductions which reduced such inclusion.''.
       (o) Amendment Related to Section 415 of the Act.--
     Subparagraph (D) of section 904(d)(2) is amended by inserting 
     ``as in effect before its repeal'' after ``section 954(f)''.
       (p) Amendments Related to Section 418 of the Act.--
       (1) The second sentence of section 897(h)(1) is amended--
       (A) by striking ``any distribution'' and all that follows 
     through ``any class of stock'' and inserting ``any 
     distribution by a real estate investment trust with respect 
     to any class of stock'', and
       (B) by striking ``the taxable year'' and inserting ``the 1-
     year period ending on the date of the distribution''.
       (2) Subsection (c) of section 418 of the American Jobs 
     Creation Act of 2004 is amended by striking ``taxable years 
     beginning after the date of the enactment of this Act'' and 
     inserting ``any distribution by a real estate investment 
     trust which is treated as a deduction for a taxable year of 
     such trust beginning after the date of the enactment of this 
     Act''.
       (q) Amendments Related to Section 422 of the Act.--
       (1) Subparagraph (B) of section 965(a)(2) is amended by 
     inserting ``from another controlled foreign corporation in 
     such chain of ownership'' before ``, but only to the 
     extent''.
       (2) Subparagraph (A) of section 965(b)(2) is amended by 
     inserting ``cash'' before ``dividends''.
       (3) Paragraph (3) of section 965(b) is amended by adding at 
     the end the following: ``The Secretary may prescribe such 
     regulations as may be necessary or appropriate to prevent the 
     avoidance of the purposes of this paragraph, including 
     regulations which provide that cash dividends shall not be 
     taken into account under subsection (a) to the extent such 
     dividends are attributable to the direct or indirect transfer 
     (including through the use of intervening entities or capital 
     contributions) of cash or other property from a related 
     person (as so defined) to a controlled foreign 
     corporation.''.
       (4) Paragraph (1) of section 965(c) is amended to read as 
     follows:
       ``(1) Applicable financial statement.--The term `applicable 
     financial statement' means--
       ``(A) with respect to a United States shareholder which is 
     required to file a financial statement with the Securities 
     and Exchange Commission (or which is included in such a 
     statement so filed by another person), the most recent 
     audited annual financial statement (including the notes which 
     form an integral part of such statement) of such shareholder 
     (or which includes such shareholder)--
       ``(i) which was so filed on or before June 30, 2003, and
       ``(ii) which was certified on or before June 30, 2003, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(B) with respect to any other United States shareholder, 
     the most recent audited financial statement (including the 
     notes which form an integral part of such statement) of such 
     shareholder (or which includes such shareholder)--
       ``(i) which was certified on or before June 30, 2003, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(ii) which is used for the purposes of a statement or 
     report--

       ``(I) to creditors,
       ``(II) to shareholders, or
       ``(III) for any other substantial nontax purpose.''.

       (5) Paragraph (2) of section 965(d) is amended by striking 
     ``properly allocated and apportioned'' and inserting 
     ``directly allocable''.
       (6) Subsection (d) of section 965 is amended by adding at 
     the end the following new paragraph:
       ``(4) Coordination with section 78.--Section 78 shall not 
     apply to any tax which is not allowable as a credit under 
     section 901 by reason of this subsection.''.
       (7) The last sentence of section 965(e)(1) is amended by 
     inserting ``which are imposed by foreign countries and 
     possessions of the United States and are'' after ``taxes''.
       (8) Subsection (f) of section 965 is amended by inserting 
     ``on or'' before ``before the due date''.
       (r) Amendments Related to Section 501 of the Act.--
       (1) Subparagraph (A) of section 164(b)(5) is amended to 
     read as follows:
       ``(A) Election to deduct state and local sales taxes in 
     lieu of state and local income taxes.--At the election of the 
     taxpayer for the taxable year, subsection (a) shall be 
     applied--
       ``(i) without regard to the reference to State and local 
     income taxes, and
       ``(ii) as if State and local general sales taxes were 
     referred to in a paragraph thereof.''.
       (2) Clause (ii) of section 56(b)(1)(A) is amended by 
     inserting ``or clause (ii) of section 164(b)(5)(A)'' before 
     the period at the end.
       (s) Amendments Related to Section 708 of the Act.--Section 
     708 of the American Jobs Creation Act of 2004 is amended--
       (1) in subsection (a), by striking ``contract commencement 
     date'' and inserting ``construction commencement date'', and
       (2) by redesignating subsection (d) as subsection (e) and 
     inserting after subsection (c) the following new subsection:
       ``(d) Certain Adjustments Not to Apply.--Section 481 of the 
     Internal Revenue Code of 1986 shall not apply with respect to 
     any change in the method of accounting which is required by 
     this section.''.
       (t) Amendments Related to Section 710 of the Act.--
       (1) Clause (ii) of section 45(b)(4)(B) is amended by 
     striking ``the date of the enactment of this Act'' and 
     inserting ``January 1, 2005,''.
       (2) Clause (ii) of section 45(c)(3)(A) is amended by 
     inserting ``or any nonhazardous lignin waste material'' after 
     ``cellulosic waste material''.
       (3) Subsection (e) of section 45 is amended by striking 
     paragraph (6).
       (4)(A) Paragraph (9) of section 45(e) is amended to read as 
     follows:
       ``(9) Coordination with credit for producing fuel from a 
     nonconventional source.--
       ``(A) In general.--The term `qualified facility' shall not 
     include any facility which produces electricity from gas 
     derived from the biodegradation of municipal solid waste if 
     such biodegradation occurred in a facility (within the 
     meaning of section 29) the production from which is allowed 
     as a credit under section 29 for the taxable year or any 
     prior taxable year.
       ``(B) Refined coal facilities.--The term `refined coal 
     production facility' shall not include any facility the 
     production from which is allowed as a credit under section 29 
     for the taxable year or any prior taxable year.''.
       (B) Subparagraph (C) of section 45(e)(8) is amended by 
     striking ``and (9)''.
       (5) Subclause (I) of section 168(e)(3)(B)(vi) is amended to 
     read as follows:

       ``(I) is described in subparagraph (A) of section 48(a)(3) 
     (or would be so described if `solar and wind' were 
     substituted for `solar' in clause (i) thereof and the last 
     sentence of such section did not apply to such 
     subparagraph),''.

       (6) Paragraph (4) of section 710(g) of the American Jobs 
     Creation Act of 2004 is amended by striking ``January 1, 
     2004'' and inserting ``January 1, 2005''.
       (u) Amendment Related to Section 801 of the Act.--Paragraph 
     (3) of section 7874(a) is amended to read as follows:
       ``(3) Coordination with subsection (b).--A corporation 
     which is treated as a domestic corporation under subsection 
     (b) shall not be treated as a surrogate foreign corporation 
     for purposes of paragraph (2)(A).''.
       (v) Amendments Related to Section 804 of the Act.--
       (1) Subparagraph (C) of section 877(g)(2) is amended by 
     striking ``section 7701(b)(3)(D)(ii)'' and inserting 
     ``section 7701(b)(3)(D)''.
       (2) Subsection (n) of section 7701 is amended to read as 
     follows:
       ``(n) Special Rules for Determining When an Individual Is 
     No Longer a United States Citizen or Long-term Resident.--For 
     purposes of this chapter--

[[Page S8676]]

       ``(1) United states citizens.--An individual who would (but 
     for this paragraph) cease to be treated as a citizen of the 
     United States shall continue to be treated as a citizen of 
     the United States until such individual--
       ``(A) gives notice of an expatriating act (with the 
     requisite intent to relinquish citizenship) to the Secretary 
     of State, and
       ``(B) provides a statement in accordance with section 6039G 
     (if such a statement is otherwise required).
       ``(2) Long-term residents.--A long-term resident (as 
     defined in section 877(e)(2)) who would (but for this 
     paragraph) be described in section 877(e)(1) shall be treated 
     as a lawful permanent resident of the United States and as 
     not described in section 877(e)(1) until such individual--
       ``(A) gives notice of termination of residency (with the 
     requisite intent to terminate residency) to the Secretary of 
     Homeland Security, and
       ``(B) provides a statement in accordance with section 6039G 
     (if such a statement is otherwise required).''.
       (w) Amendment Related to Section 811 of the Act.--
     Subsection (c) of section 811 of the American Jobs Creation 
     Act of 2004 is amended by inserting ``and which were not 
     filed before such date'' before the period at the end.
       (x) Amendments Related to Section 812 of the Act.--
       (1) Subsection (b) of section 6662 is amended by adding at 
     the end the following new sentence: ``Except as provided in 
     paragraph (1) or (2)(B) of section 6662A(e), this section 
     shall not apply to the portion of any underpayment which is 
     attributable to a reportable transaction understatement on 
     which a penalty is imposed under section 6662A.''
       (2) Paragraph (2) of section 6662A(e) is amended to read as 
     follows:
       ``(2) Coordination with other penalties.--
       ``(A) Coordination with fraud penalty.--This section shall 
     not apply to any portion of an understatement on which a 
     penalty is imposed under section 6663.
       ``(B) Coordination with gross valuation misstatement 
     penalty.--This section shall not apply to any portion of an 
     understatement on which a penalty is imposed under section 
     6662 if the rate of the penalty is determined under section 
     6662(h).''.
       (3) Subsection (f) of section 812 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(f) Effective Dates.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     ending after the date of the enactment of this Act.
       ``(2) Disqualified opinions.--Section 6664(d)(3)(B) of the 
     Internal Revenue Code of 1986 (as added by subsection (c)) 
     shall not apply to the opinion of a tax advisor if--
       ``(A) the opinion was provided to the taxpayer before the 
     date of the enactment of this Act,
       ``(B) the opinion relates to one or more transactions all 
     of which were entered into before such date, and
       ``(C) the tax treatment of items relating to each such 
     transaction was included on a return or statement filed by 
     the taxpayer before such date.''.
       (y) Amendment Related to Section 814 of the Act.--
     Subparagraph (B) of section 6501(a)(10) is amended by 
     striking ``(as defined in section 6111)''.
       (z) Amendment Related to Section 815 of the Act.--Paragraph 
     (1) of section 6112(b) is amended ``(or was required to 
     maintain a list under subsection (a) as in effect before the 
     enactment of the American Jobs Creation Act of 2004)'' after 
     ``a list under subsection (a)''.
       (aa) Amendments Related to Section 832 of the Act.--
       (1) Subsection (e) of section 853 is amended to read as 
     follows:
       ``(e) Treatment of Certain Taxes Not Allowed as a Credit 
     Under Section 901.--This section shall not apply to any tax 
     with respect to which the regulated investment company is not 
     allowed a credit under section 901 by reason of subsection 
     (k) or (l) of such section.''.
       (2) Clause (i) of section 901(l)(2)(C) is amended by 
     striking ``if such security were stock''.
       (bb) Amendments Related to Section 833 of the Act.--
       (1) Subsection (a) of section 734 is amended by inserting 
     ``with respect to such distribution'' before the period at 
     the end.
       (2) So much of subsection (b) of section 734 as precedes 
     paragraph (1) is amended to read as follows:
       ``(b) Method of Adjustment.--In the case of a distribution 
     of property to a partner by a partnership with respect to 
     which the election provided in section 754 is in effect or 
     with respect to which there is a substantial basis reduction, 
     the partnership shall--''.
       (cc) Amendment Related to Section 835 of the Act.--
     Paragraph (3) of section 860G(a) is amended--
       (1) in subparagraph (A)(iii)(I), by striking ``the 
     obligation'' and inserting ``a reverse mortgage loan or other 
     obligation'', and
       (2) by striking all that follows subparagraph (C) and 
     inserting the following:
     ``For purposes of subparagraph (A), any obligation secured by 
     stock held by a person as a tenant-stockholder (as defined in 
     section 216) in a cooperative housing corporation (as so 
     defined) shall be treated as secured by an interest in real 
     property. For purposes of subparagraph (A), any obligation 
     originated by the United States or any State (or any 
     political subdivision, agency, or instrumentality of the 
     United States or any State) shall be treated as principally 
     secured by an interest in real property if more than 50 
     percent of such obligations which are transferred to, or 
     purchased by, the REMIC are principally secured by an 
     interest in real property (determined without regard to this 
     sentence).''.
       (dd) Amendments Related to Section 836 of the Act.--
       (1) Paragraph (1) of section 334(b) is amended by striking 
     ``except that'' and all that follows and inserting ``except 
     that, in the hands of such distributee--
       ``(A) the basis of such property shall be the fair market 
     value of the property at the time of the distribution in any 
     case in which gain or loss is recognized by the liquidating 
     corporation with respect to such property, and
       ``(B) the basis of any property described in section 
     362(e)(1)(B) shall be the fair market value of the property 
     at the time of the distribution in any case in which such 
     distributee's aggregate adjusted basis of such property would 
     (but for this subparagraph) exceed the fair market value of 
     such property immediately after such liquidation.''.
       (2) Clause (ii) of section 362(e)(2)(C) is amended to read 
     as follows:
       ``(ii) Election.--Any election under clause (i) shall be 
     made at such time and in such form and manner as the 
     Secretary may prescribe, and, once made, shall be 
     irrevocable.''.
       (ee) Amendment Related to Section 840 of the Act.--
     Subsection (d) of section 121 is amended--
       (1) by redesignating the paragraph (10) relating to 
     property acquired from a decedent as paragraph (11) and by 
     moving such paragraph to the end of such subsection, and
       (2) by amending the paragraph (10) relating to property 
     acquired in like-kind exchange to read as follows:
       ``(10) Property acquired in like-kind exchange.--If a 
     taxpayer acquires property in an exchange with respect to 
     which gain is not recognized (in whole or in part) to the 
     taxpayer under subsection (a) or (b) of section 1031, 
     subsection (a) shall not apply to the sale or exchange of 
     such property by such taxpayer (or by any person whose basis 
     in such property is determined, in whole or in part, by 
     reference to the basis in the hands of such taxpayer) during 
     the 5-year period beginning with the date of such 
     acquisition.''.
       (ff) Amendment Related to Section 849 of the Act.--
     Subsection (a) of section 849 of the American Jobs Creation 
     Act of 2004 is amended by inserting ``, and in the case of 
     property treated as tax-exempt use property other than by 
     reason of a lease, to property acquired after March 12, 
     2004'' before the period at the end.
       (gg) Amendments Related to Section 853 of the Act.--
       (1) Subparagraph (C) of section 4081(a)(2) is amended by 
     striking ``for use in commercial aviation'' and inserting 
     ``for use in commercial aviation by a person registered for 
     such use under section 4101''.
       (2) So much of paragraph (2) of section 4081(d) as precedes 
     subparagraph (A) is amended to read as follows:
       ``(2) Aviation fuels.--The rates of tax specified in 
     clauses (ii) and (iv) of subsection (a)(2)(A) shall be 4.3 
     cents per gallon--''.
       (hh) Amendment Related to Section 884 of the Act.--
     Subparagraph (B) of section 170(f)(12) is amended by adding 
     at the end the following new clauses:
       ``(v) Whether the donee organization provided any goods or 
     services in consideration, in whole or in part, for the 
     qualified vehicle.
       ``(vi) A description and good faith estimate of the value 
     of any goods or services referred to in clause (v) or, if 
     such goods or services consist solely of intangible religious 
     benefits (as defined in paragraph (8)(B)), a statement to 
     that effect.''.
       (ii) Amendments Related to Section 885 of the Act.--
       (1) Paragraph (2) of section 26(b) is amended by striking 
     ``and'' at the end of subparagraph (R), by striking the 
     period at the end of subparagraph (S) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(T) subsections (a)(1)(B)(i) and (b)(4)(A) of section 
     409A (relating to interest and additional tax with respect to 
     certain deferred compensation).''.
       (2) Clause (ii) of section 409A(a)(4)(C) is amended by 
     striking ``first''.
       (3)(A) Notwithstanding section 885(d)(1) of the American 
     Jobs Creation Act of 2004, subsection (b) of section 409A of 
     the Internal Revenue Code of 1986 shall take effect on 
     January 1, 2005.
       (B) Not later than 90 days after the date of the enactment 
     of this Act, the Secretary of the Treasury shall issue 
     guidance under which a nonqualified deferred compensation 
     plan which is in violation of the requirements of section 
     409A(b) of such Code shall be treated as not having violated 
     such requirements if such plan comes into conformance with 
     such requirements during such limited period as the Secretary 
     may specify in such guidance.
       (4) Subsection (f) of section 885 of the American Jobs 
     Creation Act of 2004 is amended by striking ``December 31, 
     2004'' the first place it appears and inserting ``January 1, 
     2005''.
       (jj) Amendments Related to Section 898 of the Act.--
       (1) Paragraph (3) of section 361(b) is amended by inserting 
     ``(reduced by the amount of the liabilities assumed (within 
     the meaning

[[Page S8677]]

     of section 357(c)))'' before the period at the end.
       (2) Paragraph (1) of section 357(d) is amended by inserting 
     ``section 361(b)(3),'' after ``section 358(h),''.
       (kk) Amendment Related to Section 899 of the Act.--
     Subparagraph (A) of section 351(g)(3) is amended by adding at 
     the end the following: ``If there is not a real and 
     meaningful likelihood that dividends beyond any limitation or 
     preference will actually be paid, the possibility of such 
     payments will be disregarded in determining whether stock is 
     limited and preferred as to dividends.''.
       (ll) Amendment Related to Section 902 of the Act.--
     Paragraph (1) of section 709(b) is amended by striking 
     ``taxpayer'' both places it appears and inserting 
     ``partnership''.
       (mm) Amendment Related to Section 909 of the Act.--Clause 
     (ii) of section 451(i)(4)(B) is amended by striking ``the 
     close of the period applicable under subsection (a)(2)(B) as 
     extended under paragraph (2)'' and inserting ``December 31, 
     2006''.
       (nn) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which they relate.

     SEC. 3. AMENDMENTS RELATED TO THE WORKING FAMILIES TAX RELIEF 
                   ACT OF 2004.

       (a) Amendment Related to Section 201 of the Act.--Paragraph 
     (2) of section 152(e) is amended to read as follows:
       ``(2) Requirements.--For purposes of paragraph (1), the 
     requirements described in this paragraph are met if--
       ``(A) a decree of divorce or separate maintenance or 
     written separation agreement between the parents applicable 
     to the taxable year beginning in such calendar year provides 
     that the noncustodial parent shall be entitled to any 
     deduction allowable under section 151 for such child, and in 
     the case of such a decree or agreement executed before 
     January 1, 1985, the noncustodial parent provides at least 
     $600 for the support of such child during such calendar year, 
     or
       ``(B) the custodial parent signs a written declaration (in 
     such manner and form as the Secretary may prescribe) that 
     such parent will not claim such child as a dependent for such 
     taxable year.
     For purposes of subparagraph (A), amounts expended for the 
     support of a child or children shall be treated as received 
     from the noncustodial parent to the extent that such parent 
     provided amounts for such support.''.
       (b) Amendment Related to Section 203 of the Act.--
     Subparagraph (B) of section 21(b)(1) is amended by inserting 
     ``(as defined in section 152, determined without regard to 
     subsections (b)(1), (b)(2), and (d)(1)(B))'' after 
     ``dependent of the taxpayer''.
       (c) Amendment Related to Section 207 of the Act.--
     Subparagraph (A) of section 223(d)(2) is amended by inserting 
     ``, determined without regard to subsections (b)(1), (b)(2), 
     and (d)(1)(B) thereof'' after ``section 152''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Working Families Tax Relief Act of 2004 to which they relate.

     SEC. 4. AMENDMENTS RELATED TO THE JOBS AND GROWTH TAX RELIEF 
                   RECONCILIATION ACT OF 2003.

       (a) Amendments Related to Section 201 of the Act.--
       (1) Clause (ii) of section 168(k)(4)(B) is amended to read 
     as follows:
       ``(ii) which is--

       ``(I) acquired by the taxpayer after May 5, 2003, and 
     before January 1, 2005, but only if no written binding 
     contract for the acquisition was in effect before May 6, 
     2003, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after May 5, 2003, 
     and before January 1, 2005, and''.

       (2) Subparagraph (D) of section 1400L(b)(2) is amended by 
     striking ``September 11, 2004'' and inserting ``January 1, 
     2005''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 201 of the Jobs 
     and Growth Tax Relief and Reconciliation Act of 2003.

     SEC. 5. AMENDMENT RELATED TO THE VICTIMS OF TERRORISM TAX 
                   RELIEF ACT OF 2001.

       (a) Amendment Related to Section 201 of the Act.--Paragraph 
     (17) of section 6103(l) is amended by striking ``subsection 
     (f), (i)(7), or (p)'' and inserting ``subsection (f), (i)(8), 
     or (p)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 201 of the 
     Victims of Terrorism Tax Relief Act of 2001.

     SEC. 6. AMENDMENT RELATED TO THE TRANSPORTATION EQUITY ACT 
                   FOR THE 21ST CENTURY.

       (a) Amendment Related to Section 9005 of the Act.--The last 
     sentence of paragraph (2) of section 9504(b) is amended by 
     striking ``subparagraph (B)'' and inserting ``subparagraph 
     (C)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 9005 of the 
     Transportation Equity Act for the 21st Century.

     SEC. 7. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF 
                   1997.

       (a) Amendments Related to Section 1055 of the Act.--
       (1) The last sentence of section 6411(a) is amended by 
     striking ``6611(f)(3)(B)'' and inserting ``6611(f)(4)(B)''.
       (2) Paragraph (4) of section 6601(d) is amended by striking 
     ``6611(f)(3)(A)'' and inserting ``6611(f)(4)(A)''.
       (b) Amendment Related to Section 1144 of the Act.--
     Subparagraph (B) of section 6038B(a)(1) is amended by 
     inserting ``or'' at the end.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Taxpayer Relief Act of 1997 to which they relate.

     SEC. 8. CLERICAL CORRECTIONS.

       (a) Subparagraph (C) of section 2(b)(2) is amended by 
     striking ``subparagraph (C)'' and inserting ``subparagraph 
     (B)''.
       (b) Subparagraph (E) of section 26(b)(2) is amended by 
     striking ``section 530(d)(3)'' and inserting ``section 
     530(d)(4)''.
       (c)(1) Subclause (II) of section 38(c)(2)(A)(ii) is amended 
     by striking ``or the New York Liberty Zone business employee 
     credit or the specified credits'' and inserting ``, the New 
     York Liberty Zone business employee credit, and the specified 
     credits''.
       (2) Subclause (II) of section 38(c)(3)(A)(ii) is amended by 
     striking ``or the specified credits'' and inserting ``and the 
     specified credits''.
       (3) Subparagraph (B) of section 38(c)(4) is amended--
       (A) by striking ``includes'' and inserting ``means'', and
       (B) by inserting ``and'' at the end of clause (i).
       (d)(1) Subparagraph (A) of section 39(a)(1) is amended by 
     striking ``each of the 1 taxable years'' and by inserting 
     ``the taxable year''.
       (2) Subparagraph (B) of section 39(a)(3) is amended to read 
     as follows:
       ``(B) paragraph (1) shall be applied by substituting `each 
     of the 5 taxable years' for `the taxable year' in 
     subparagraph (A) thereof, and''.
       (e) Paragraph (5) of section 43(c) is amended to read as 
     follows:
       ``(5) Alaska natural gas.--For purposes of paragraph 
     (1)(D)--
       ``(A) In general.--The term `Alaska natural gas' means 
     natural gas entering the Alaska natural gas pipeline (as 
     defined in section 168(i)(16) (determined without regard to 
     subparagraph (B) thereof)) which is produced from a well--
       ``(i) located in the area of the State of Alaska lying 
     north of 64 degrees North latitude, determined by excluding 
     the area of the Alaska National Wildlife Refuge (including 
     the continental shelf thereof within the meaning of section 
     638(1)), and
       ``(ii) pursuant to the applicable State and Federal 
     pollution prevention, control, and permit requirements from 
     such area (including the continental shelf thereof within the 
     meaning of section 638(1)).
       ``(B) Natural gas.--The term `natural gas' has the meaning 
     given such term by section 613A(e)(2).''.
       (f) Paragraph (2) of section 45I(a) is amended by striking 
     ``qualified credit oil production'' and inserting ``qualified 
     crude oil production''.
       (g) Subparagraph (E) of section 50(a)(2) is amended by 
     striking ``section 48(a)(5)'' and inserting ``section 
     48(b)''.
       (h)(1) Subsection (a) of section 62 is amended--
       (A) by redesignating paragraph (19) (relating to costs 
     involving discrimination suits, etc.), as added by section 
     703 of the American Jobs Creation Act of 2004, as paragraph 
     (20), and
       (B) by moving such paragraph after paragraph (19) (relating 
     to health savings accounts).
       (2) Subsection (e) of section 62 is amended by striking 
     ``subsection (a)(19)'' and inserting ``subsection (a)(20)''.
       (i) Paragraph (3) of section 167(f) is amended by striking 
     ``section 197(e)(7)'' and inserting ``section 197(e)(6)''.
       (j) Subparagraph (D) of section 168(i)(15) is amended by 
     striking ``This paragraph shall not apply to'' and inserting 
     ``Such term shall not include''.
       (k) Paragraph (2) of section 221(d) is amended by striking 
     ``this Act'' and inserting ``the Taxpayer Relief Act of 
     1997''.
       (l) Paragraph (8) of section 318(b) is amended by striking 
     ``section 6038(d)(2)'' and inserting ``section 6038(e)(2)''.
       (m) Subparagraph (B) of section 332(d)(1) is amended by 
     striking ``distribution to which section 301 applies'' and 
     inserting ``distribution of property to which section 301 
     applies''.
       (n) Paragraph (1) of section 415(l) is amended by striking 
     ``individual medical account'' and inserting ``individual 
     medical benefit account''.
       (o) The matter following clause (iv) of section 
     415(n)(3)(C) is amended by striking ``clauses'' and inserting 
     ``clause''.
       (p) Paragraph (12) of section 501(c) is amended--
       (1) by striking ``subparagraph (C)(iii)'' in subparagraph 
     (F) and inserting ``subparagraph (C)(iv)'', and
       (2) by striking ``subparagraph (C)(iv)'' in subparagraph 
     (G) and inserting ``subparagraph (C)(v)''.
       (q) Clause (ii) of section 501(c)(22)(B) is amended by 
     striking ``clause (ii) of paragraph (21)(B)'' and inserting 
     ``clause (ii) of paragraph (21)(D)''.
       (r) Paragraph (1) of section 512(b) is amended by striking 
     ``section 512(a)(5)'' and inserting ``subsection (a)(5)''.
       (s)(1) Subsection (b) of section 512 is amended--
       (A) by redesignating paragraph (18) (relating to the 
     treatment of gain or loss on sale or exchange of certain 
     brownfield sites), as added by section 702 of the American 
     Jobs Creation Act of 2004, as paragraph (19), and

[[Page S8678]]

       (B) by moving such paragraph to the end of such subsection.
       (2) Subparagraph (E) of section 514(b)(1) is amended by 
     striking ``section 512(b)(18)'' and inserting ``section 
     512(b)(19)''.
       (t)(1) Subsection (b) of section 530 is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (2) Clause (ii) of section 530(b)(2)(A) is amended by 
     striking ``paragraph (4)'' and inserting ``paragraph (3)''.
       (u) Section 881(e)(1)(C) is amended by inserting 
     ``interest-related dividend received by a controlled foreign 
     corporation'' after ``shall apply to any''.
       (v) Clause (i) of section 954(c)(1)(C) is amended by 
     striking ``paragraph (4)(A)'' and inserting ``paragraph 
     (5)(A)''.
       (w) Subparagraph (F) of section 954(c)(1) is amended by 
     striking ``Net income from notional principal contracts.'' 
     after ``Income from notional principal contracts.--''.
       (x) Paragraph (23) of section 1016(a) is amended by 
     striking ``1045(b)(4)'' and inserting ``1045(b)(3)''.
       (y) Paragraph (1) of section 1256(f) is amended by striking 
     ``subsection (e)(2)(C)'' and inserting ``subsection (e)(2)''.
       (z) The matter preceding clause (i) of section 
     1031(h)(2)(B) is amended by striking ``subparagraph'' and 
     inserting ``subparagraphs''.
       (aa) Paragraphs (1) and (2) of section 1375(d) are each 
     amended by striking ``subchapter C'' and inserting 
     ``accumulated''.
       (bb) Each of the following provisions are amended by 
     striking ``General Accounting Office'' each place it appears 
     therein and inserting ``Government Accountability Office'':
       (1) Clause (ii) of section 1400E(c)(4)(A).
       (2) Paragraph (1) of section 6050M(b).
       (3) Subparagraphs (A), (B)(i), and (B)(ii) of section 
     6103(i)(8).
       (4) Paragraphs (3)(C)(i), (4), (5), and (6)(B) of section 
     6103(p).
       (5) Subsection (e) of section 8021.
       (cc)(1) Clause (ii) of section 1400L(b)(2)(C) is amended by 
     striking ``section 168(k)(2)(C)(i)'' and inserting ``section 
     168(k)(2)(D)(i)''.
       (2) Clause (iv) of section 1400L(b)(2)(C) is amended by 
     striking ``section 168(k)(2)(C)(iii)'' and inserting 
     ``section 168(k)(2)(D)(iii)''.
       (3) Subparagraph (D) of section 1400L(b)(2) is amended by 
     striking ``section 168(k)(2)(D)'' and inserting ``section 
     168(k)(2)(E)''.
       (4) Subparagraph (E) of section 1400L(b)(2) is amended by 
     striking ``section 168(k)(2)(F)'' and inserting ``section 
     168(k)(2)(G)''.
       (5) Paragraph (5) of section 1400L(c) is amended by 
     striking ``section 168(k)(2)(C)(iii)'' and inserting 
     ``section 168(k)(2)(D)(iii)''.
       (dd) Section 3401 is amended by redesignating subsection 
     (h) as subsection (g).
       (ee) Paragraph (2) of section 4161(a) is amended to read as 
     follows:
       ``(2) 3 percent rate of tax for electric outboard motors.--
     In the case of an electric outboard motor, paragraph (1) 
     shall be applied by substituting `3 percent' for `10 
     percent'.''.
       (ff) Subparagraph (C) of section 4261(e)(4) is amended by 
     striking ``imposed subsection (b)'' and inserting ``imposed 
     by subsection (b)''.
       (gg) Subsection (a) of section 4980D is amended by striking 
     ``plans'' and inserting ``plan''.
       (hh) The matter following clause (iii) of section 
     6045(e)(5)(A) is amended by striking ``for `$250,000'.'' and 
     all that follows through ``to the Treasury.'' and inserting 
     ``for `$250,000'. The Secretary may by regulation increase 
     the dollar amounts under this subparagraph if the Secretary 
     determines that such an increase will not materially reduce 
     revenues to the Treasury.''.
       (ii) Subsection (p) of section 6103 is amended--
       (1) by striking so much of paragraph (4) as precedes 
     subparagraph (A) and inserting the following:
       ``(4) Safeguards.--Any Federal agency described in 
     subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or (7), 
     (j)(1), (2), or (5), (k)(8), (l)(1), (2), (3), (5), (10), 
     (11), (13), (14), or (17) or (o)(1), the Government 
     Accountability Office, the Congressional Budget Office, or 
     any agency, body, or commission described in subsection (d), 
     (i)(3)(B)(i) or 7(A)(ii), or (l)(6), (7), (8), (9), (12), 
     (15), or (16) or any other person described in subsection 
     (l)(16), (18), (19), or (20) shall, as a condition for 
     receiving returns or return information--'',
       (2) by amending paragraph (4)(F)(i) to read as follows:
       ``(i) in the case of an agency, body, or commission 
     described in subsection (d), (i)(3)(B)(i), or (l)(6), (7), 
     (8), (9), or (16), or any other person described in 
     subsection (l)(16), (18), (19), or (20) return to the 
     Secretary such returns or return information (along with any 
     copies made therefrom) or make such returns or return 
     information undisclosable in any manner and furnish a written 
     report to the Secretary describing such manner,'', and
       (3) by striking the first full sentence in the matter 
     following subparagraph (F) of paragraph (4) and inserting the 
     following: ``If the Secretary determines that any such 
     agency, body, or commission, including an agency or any other 
     person described in subsection (l)(16), (18), (19), or (20), 
     or the Government Accountability Office or the Congressional 
     Budget Office, has failed to, or does not, meet the 
     requirements of this paragraph, he may, after any proceedings 
     for review established under paragraph (7), take such actions 
     as are necessary to ensure such requirements are met, 
     including refusing to disclose returns or return information 
     to such agency, body, or commission, including an agency or 
     any other person described in subsection (l)(16), (18), (19), 
     or (20), or the Government Accountability Office or the 
     Congressional Budget Office, until he determines that such 
     requirements have been or will be met.''.
       (jj) Clause (ii) of section 6111(b)(1)(A) is amended by 
     striking ``advice or assistance'' and inserting ``aid, 
     assistance, or advice''.
       (kk) Section 6427 is amended by striking subsection (o) and 
     by redesignating subsection (p) as subsection (o).
       (ll) Paragraph (3) of section 6662(d) is amended by 
     striking ``the'' before ``1 or more''.

     SEC. 9. OTHER CORRECTIONS RELATED TO THE AMERICAN JOBS 
                   CREATION ACT OF 2004.

       (a) Amendments Related to Section 233 of the Act.--
       (1) Clause (vi) of section 1361(c)(2)(A) is amended--
       (A) by inserting ``or a depository institution holding 
     company (as defined in section 3(w)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813(w)(1))'' after ``a bank (as 
     defined in section 581)'', and
       (B) by inserting ``or company'' after ``such bank''.
       (2) Paragraph (16) of section 4975(d) is amended--
       (A) in subparagraph (A), by inserting ``or a depository 
     institution holding company (as defined in section 3(w)(1) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))'' 
     after ``a bank (as defined in section 581)'', and
       (B) in subparagraph (C), by inserting ``or company'' after 
     ``such bank''.
       (b) Amendment Related to Section 237 of the Act.--
     Subparagraph (F) of section 1362(d)(3) is amended by striking 
     ``a bank holding company'' and all that follows through 
     ``section 2(p) of such Act)'' and inserting ``a depository 
     institution holding company (as defined in section 3(w)(1) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))''.
       (c) Amendments Related to Section 239 of the Act.--
     Paragraph (3) of section 1361(b) is amended--
       (1) in subparagraph (A), by striking ``and in the case of 
     information returns required under part III of subchapter A 
     of chapter 61'', and
       (2) by adding at the end the following new subparagraph:
       ``(E) Information returns.--Except to the extent provided 
     by the Secretary, this paragraph shall not apply to 
     information returns made by a qualified subchapter S 
     subsidiary under part III of subchapter A of chapter 61.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which they relate.
                                 ______