[Congressional Record Volume 156, Number 20 (Tuesday, February 9, 2010)]
[Senate]
[Pages S541-S542]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              SMALL BUSINESS PENALTY FAIRNESS ACT OF 2009

  Mr. REID. Mr. President, I ask unanimous consent that the Senate 
Finance Committee be discharged from further consideration of S. 2917 
and that the Senate then proceed to its consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the bill by title. The legislative clerk read as follows:

       A bill (S. 2917) to amend the Internal Revenue Code of 1986 
     to modify the penalty for failure to disclose certain 
     reportable transactions and the penalty for submitting a bad 
     check to the Internal Revenue Service, to modify certain 
     rules relating to Federal vendors, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. REID. I ask unanimous consent that the bill be read three times, 
passed, the motion to reconsider be laid upon the table, and that any 
statements relating to this matter be printed in the Record.

[[Page S542]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 2917) was ordered to be engrossed for a third reading, 
was read the third time, and passed, as follows:

                                S. 2917

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

     SECTION 1. SHORT TITLE.

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

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

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

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

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

     SEC. 4. APPLICATION OF BAD CHECKS PENALTY TO ELECTRONIC 
                   PAYMENTS.

       (a) In General.--Section 6657 of the Internal Revenue Code 
     of 1986 is amended--
       (1) by striking ``If any check or money order in payment of 
     any amount'' and inserting ``If any instrument in payment, by 
     any commercially acceptable means, of any amount'', and
       (2) by striking ``such check'' each place it appears and 
     inserting ``such instrument''.
       (b) Effective Dates.--The amendments made by this section 
     shall apply to instruments tendered after the date of the 
     enactment of this Act.

     SEC. 5. APPLICATION OF LEVY TO PAYMENTS TO FEDERAL VENDORS 
                   RELATING TO PROPERTY.

       (a) In General.--Section 6331(h)(3) of the Internal Revenue 
     Code of 1986 is amended by striking ``goods or services'' and 
     inserting ``property, goods, or services''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to levies approved after the date of the 
     enactment of this Act.

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