[Congressional Record Volume 158, Number 59 (Tuesday, April 24, 2012)]
[Senate]
[Pages S2657-S2658]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. REID:
S. 2343. A bill to amend the Higher Education act of 1965 to extend
the reduced interest rate for Federal Direct Stafford Loans, and for
other purposes; placed on the calendar.
Mr. REID. Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record as follows:
S. 2343
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 ``Stop the Student Loan
Interest Rate Hike Act of 2012''.
SEC. 2. INTEREST RATE EXTENSION.
Section 455(b)(7)(D) of the Higher Education Act of 1965
(20 U.S.C. 1087e(b)(7)(D)) is amended--
(1) in the matter preceding clause (i), by striking ``and
before July 1, 2012,'' and inserting ``and before July 1,
2013,''; and
(2) in clause (v), by striking ``and before July 1, 2012,''
and inserting ``and before July 1, 2013,''.
SEC. 3. EMPLOYMENT TAX TREATMENT OF PROFESSIONAL SERVICE
BUSINESSES.
(a) In General.--Section 1402 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(m) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to specified s
corporations.--
``(A) In general.--In the case of an applicable shareholder
who provides substantial services with respect to a
professional service business referred to in subparagraph (C)
of a specified S corporation--
``(i) such shareholder shall be treated as engaged in the
trade or business of such professional service business with
respect to items of income or loss described in section 1366
which are attributable to such business, and
``(ii) such shareholder's net earnings from self-employment
shall include such shareholder's pro rata share of such items
of income or loss, except that in computing such pro rata
share of such items the exceptions provided in subsection (a)
shall apply.
``(B) Treatment of family members.--Except as otherwise
provided by the Secretary, the applicable shareholder's pro
rata share of items referred to in subparagraph (A) shall be
increased by the pro rata share of such items of each member
of such applicable shareholder's family (within the meaning
of section 318(a)(1)) who does not provide substantial
services with respect to such professional service business.
``(C) Specified s corporation.--For purposes of this
subsection, the term `specified S corporation' means--
``(i) any S corporation which is a partner in a partnership
which is engaged in a professional service business if
substantially all of the activities of such S corporation are
performed in connection with such partnership, and
``(ii) any other S corporation which is engaged in a
professional service business if 75 percent or more of the
gross income of such business is attributable to service of 3
or fewer shareholders of such corporation.
``(D) Applicable shareholder.--For purposes of this
paragraph, the term `applicable shareholder' means any
shareholder whose modified adjusted gross income for the
taxable year exceeds--
``(i) in the case of a shareholder making a joint return
under section 6013 or a surviving spouse (as defined in
section 2(a)), $250,000,
``(ii) in the case of a married shareholder (as defined in
section 7703) filing a separate return, half of the dollar
amount determined under clause (i), and
``(iii) in any other case, $200,000.
``(2) Partners.--
``(A) In general.--In the case of any partnership which is
engaged in a professional service business, subsection
(a)(13) shall not apply to any applicable partner who
provides substantial services with respect to such
professional service business.
``(B) Applicable partner.--For purposes of this paragraph,
the term `applicable partner' means any partner whose
modified adjusted gross income for the taxable year exceeds--
``(i) in the case of a partner making a joint return under
section 6013 or a surviving spouse (as defined in section
2(a)), $250,000,
``(ii) in the case of a married partner (as defined in
section 7703) filing a separate return, half of the dollar
amount determined under clause (i), and
``(iii) in any other case, $200,000.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means
any trade or business (or portion thereof) providing services
in the fields of health, law, lobbying, engineering,
architecture, accounting, actuarial science, performing arts,
consulting, athletics, investment advice or management, or
brokerage services.
``(4) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' means
adjusted gross income--
``(A) determined without regard to any deduction allowed
under section 164(f), and
``(B) increased by the amount excluded from gross income
under section 911(a)(1).
``(5) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection, including regulations which
prevent the avoidance of the purposes of this subsection
through tiered entities or otherwise.
``(6) Cross reference.--For employment tax treatment of
wages paid to shareholders of S corporations, see subtitle
C.''.
(b) Conforming Amendment.--Section 211 of the Social
Security Act is amended by adding at the end the following
new subsection:
``(l) Special Rules for Professional Service Businesses.--
``(1) Shareholders providing services to specified s
corporations.--
``(A) In general.--In the case of an applicable shareholder
who provides substantial services with respect to a
professional service business referred to in subparagraph (C)
of a specified S corporation--
``(i) such shareholder shall be treated as engaged in the
trade or business of such professional service business with
respect to items of income or loss described in section 1366
of the Internal Revenue Code of 1986 which are attributable
to such business, and
[[Page S2658]]
``(ii) such shareholder's net earnings from self-employment
shall include such shareholder's pro rata share of such items
of income or loss, except that in computing such pro rata
share of such items the exceptions provided in subsection (a)
shall apply.
``(B) Treatment of family members.--Except as otherwise
provided by the Secretary of the Treasury, the applicable
shareholder's pro rata share of items referred to in
subparagraph (A) shall be increased by the pro rata share of
such items of each member of such applicable shareholder's
family (within the meaning of section 318(a)(1) of the
Internal Revenue Code of 1986) who does not provide
substantial services with respect to such professional
service business.
``(C) Specified s corporation.--For purposes of this
subsection, the term `specified S corporation' means--
``(i) any S corporation (as defined in section 1361(a) of
the Internal Revenue Code of 1986) which is a partner in a
partnership which is engaged in a professional service
business if substantially all of the activities of such S
corporation are performed in connection with such
partnership, and
``(ii) any other S corporation (as so defined) which is
engaged in a professional service business if 75 percent or
more of the gross income of such business is attributable to
service of 3 or fewer shareholders of such corporation.
``(D) Applicable shareholder.--For purposes of this
paragraph, the term `applicable shareholder' means any
shareholder whose modified adjusted gross income for the
taxable year exceeds--
``(i) in the case of a shareholder making a joint return
under section 6013 of the Internal Revenue Code of 1986 or a
surviving spouse (as defined in section 2(a) of such Code),
$250,000,
``(ii) in the case of a married shareholder (as defined in
section 7703 of such Code) filing a separate return, half of
the dollar amount determined under clause (i), and
``(iii) in any other case, $200,000.
``(2) Partners.--
``(A) In general.--In the case of any partnership which is
engaged in a professional service business, subsection
(a)(12) shall not apply to any applicable partner who
provides substantial services with respect to such
professional service business.
``(B) Applicable partner.--For purposes of this paragraph,
the term `applicable partner' means any partner whose
modified adjusted gross income for the taxable year exceeds--
``(i) in the case of a partner making a joint return under
section 6013 of the Internal Revenue Code of 1986 or a
surviving spouse (as defined in section 2(a) of such Code),
$250,000,
``(ii) in the case of a married partner (as defined in
section 7703 of such Code) filing a separate return, half of
the dollar amount determined under clause (i), and
``(iii) in any other case, $200,000.
``(3) Professional service business.--For purposes of this
subsection, the term `professional service business' means
any trade or business (or portion thereof) providing services
in the fields of health, law, lobbying, engineering,
architecture, accounting, actuarial science, performing arts,
consulting, athletics, investment advice or management, or
brokerage services.
``(4) Modified adjusted gross income.--For purposes of this
subsection, the term `modified adjusted gross income' means
adjusted gross income as determined under section 62 of the
Internal Revenue Code of 1986--
``(A) determined without regard to any deduction allowed
under section 164(f) of such Code, and
``(B) increased by the amount excluded from gross income
under section 911(a)(1) of such Code.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2012.
SEC. 4. COMPLIANCE PROVISION.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go-Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the Senate Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
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