[Congressional Record Volume 170, Number 79 (Tuesday, May 7, 2024)]
[Senate]
[Pages S3508-S3509]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2004. Mr. ROMNEY submitted an amendment intended to be proposed to
amendment SA 1911 proposed by Ms. Cantwell (for herself, Mr. Cruz, Ms.
Duckworth, and Mr. Moran) to the bill H.R. 3935, to amend title 49,
United States Code, to reauthorize and improve the Federal Aviation
Administration and other civil aviation programs, and for other
purposes; which was ordered to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. ___. ENFORCEMENT PROVISIONS WITH RESPECT TO COVID-
RELATED EMPLOYEE RETENTION CREDITS.
(a) Increase in Assessable Penalty on COVID-ERTC Promoters
for Aiding and Abetting Understatements of Tax Liability.--
(1) In general.--If any COVID-ERTC promoter is subject to
penalty under section 6701(a) of the Internal Revenue Code of
1986 with respect to any COVID-ERTC document, notwithstanding
paragraphs (1) and (2) of section 6701(b) of such Code, the
amount of the penalty imposed under such section 6701(a)
shall be the greater of--
(A) $200,000 ($10,000, in the case of a natural person), or
(B) 75 percent of the gross income derived (or to be
derived) by such promoter with respect to the aid,
assistance, or advice referred to in section 6701(a)(1) of
such Code with respect to such document.
(2) No inference.--Paragraph (1) shall not be construed to
create any inference with respect to the proper application
of the knowledge requirement of section 6701(a)(3) of the
Internal Revenue Code of 1986.
(b) Failure to Comply With Due Diligence Requirements
Treated as Knowledge for Purposes of Assessable Penalty for
Aiding and Abetting Understatement of Tax Liability.--In the
case of any COVID-ERTC promoter, the knowledge requirement of
section 6701(a)(3) of the Internal Revenue Code of 1986 shall
be treated as satisfied with respect to any COVID-ERTC
document with respect to which such promoter provided aid,
assistance, or advice, if such promoter fails to comply with
the due diligence requirements referred to in subsection
(c)(1).
(c) Assessable Penalty for Failure to Comply With Due
Diligence Requirements.--
(1) In general.--Any COVID-ERTC promoter which provides
aid, assistance, or advice with respect to any COVID-ERTC
document and which fails to comply with due diligence
requirements imposed by the Secretary with respect to
determining eligibility for, or the amount of, any COVID-
related employee retention tax credit, shall pay a penalty of
$1,000 for each such failure.
(2) Due diligence requirements.--Except as otherwise
provided by the Secretary, the due diligence requirements
referred to in paragraph (1) shall be similar to the due
diligence requirements imposed under section 6695(g).
(3) Restriction to documents used in connection with
returns or claims for refund.--Paragraph (1) shall not apply
with respect to any COVID-ERTC document unless such document
constitutes, or relates to, a return or claim for refund.
(4) Treatment as assessable penalty, etc.--For purposes of
the Internal Revenue Code of 1986, the penalty imposed under
paragraph (1) shall be treated in the same manner as a
penalty imposed under section 6695(g).
(5) Secretary.--For purposes of this subsection, the term
``Secretary'' means the Secretary of the Treasury or the
Secretary's delegate.
(d) Assessable Penalties for Failure to Disclose
Information, Maintain Client Lists, etc.--For purposes of
sections 6111, 6112, 6707 and 6708 of the Internal Revenue
Code of 1986--
(1) any COVID-related employee retention tax credit
(whether or not the taxpayer claims such COVID-related
employee retention tax credit) shall be treated as a listed
transaction (and as a reportable transaction) with respect to
any COVID-ERTC promoter if such promoter provides any aid,
assistance, or advice with respect to any COVID-ERTC document
relating to such COVID-related employee retention tax credit,
and
(2) such COVID-ERTC promoter shall be treated as a material
advisor with respect to such transaction.
(e) COVID-ERTC Promoter.--For purposes of this section--
(1) In general.--The term ``COVID-ERTC promoter'' means,
with respect to any COVID-ERTC document, any person which
provides aid, assistance, or advice with respect to such
document if--
(A) such person charges or receives a fee for such aid,
assistance, or advice which is based on the amount of the
refund or credit with respect to such document and, with
respect to such person's taxable year in which such person
provided such assistance or the preceding taxable year, the
aggregate gross receipts of such person for aid, assistance,
and advice with respect to all COVID-ERTC documents exceeds
20 percent of the gross receipts of such person for such
taxable year, or
(B) with respect to such person's taxable year in which
such person provided such assistance or the preceding taxable
year--
(i) the aggregate gross receipts of such person for aid,
assistance, and advice with respect to all COVID-ERTC
documents exceeds 50 percent of the gross receipts of such
person for such taxable year, or
(ii) both--
(I) such aggregate gross receipts exceeds 20 percent of the
gross receipts of such person for such taxable year, and
(II) the aggregate gross receipts of such person for aid,
assistance, and advice with respect to all COVID-ERTC
documents (determined after application of paragraph (3))
exceeds $500,000.
(2) Exception for certified professional employer
organizations.--The term ``COVID-ERTC promoter'' shall not
include a certified professional employer organization (as
defined in section 7705).
(3) Aggregation rule.--For purposes of paragraph
(1)(B)(ii)(II), all persons treated as a single employer
under subsection (a) or (b) of section 52 of the Internal
Revenue Code of 1986, or subsection (m) or (o) of section 414
of such Code, shall be treated as 1 person.
(4) Short taxable years.--In the case of any taxable year
of less than 12 months, paragraph (1) shall be applied with
respect to the calendar year in which such taxable year
begins (in addition to applying to such taxable year).
(f) COVID-ERTC Document.--For purposes of this section, the
term ``COVID-ERTC document'' means any return, affidavit,
claim, or other document related to any COVID-related
employee retention tax credit, including any document related
to eligibility for, or the calculation or determination of
any amount directly related to any COVID-related employee
retention tax credit.
(g) COVID-related Employee Retention Tax Credit.--For
purposes of this section, the term ``COVID-related employee
retention tax credit'' means--
(1) any credit, or advance payment, under section 3134 of
the Internal Revenue Code of 1986, and
(2) any credit, or advance payment, under section 2301 of
the CARES Act.
(h) Limitation on Credit and Refund of COVID-related
Employee Retention Tax Credits.--Notwithstanding section 6511
of the Internal Revenue Code of 1986 or any other provision
of law, no credit or refund of any COVID-related employee
retention tax credit shall be allowed or made after January
31, 2024, unless a claim for such credit or refund is filed
by the taxpayer on or before such date.
(i) Amendments to Extend Limitation on Assessment.--
(1) In general.--Section 3134(l) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(l) Extension of Limitation on Assessment.--
``(1) In general.--Notwithstanding section 6501, the
limitation on the time period for
[[Page S3509]]
the assessment of any amount attributable to a credit claimed
under this section shall not expire before the date that is 6
years after the latest of--
``(A) the date on which the original return which includes
the calendar quarter with respect to which such credit is
determined is filed,
``(B) the date on which such return is treated as filed
under section 6501(b)(2), or
``(C) the date on which the claim for credit or refund with
respect to such credit is made.
``(2) Deduction for wages taken into account in determining
improperly claimed credit.--
``(A) In general.--Notwithstanding section 6511, in the
case of an assessment attributable to a credit claimed under
this section, the limitation on the time period for credit or
refund of any amount attributable to a deduction for
improperly claimed ERTC wages shall not expire before the
time period for such assessment expires under paragraph (1).
``(B) Improperly claimed ertc wages.--For purposes of this
paragraph, the term `improperly claimed ERTC wages' means,
with respect to an assessment attributable to a credit
claimed under this section, the wages with respect to which a
deduction would not have been allowed if the portion of the
credit to which such assessment relates had been properly
claimed.''.
(2) Application to cares act credit.--Section 2301 of the
CARES Act is amended by adding at the end the following new
subsection:
``(o) Extension of Limitation on Assessment.--
``(1) In general.--Notwithstanding section 6501 of the
Internal Revenue Code of 1986, the limitation on the time
period for the assessment of any amount attributable to a
credit claimed under this section shall not expire before the
date that is 6 years after the latest of--
``(A) the date on which the original return which includes
the calendar quarter with respect to which such credit is
determined is filed,
``(B) the date on which such return is treated as filed
under section 6501(b)(2) of such Code, or
``(C) the date on which the claim for credit or refund with
respect to such credit is made.
``(2) Deduction for wages taken into account in determining
improperly claimed credit.--
``(A) In general.--Notwithstanding section 6511 of such
Code, in the case of an assessment attributable to a credit
claimed under this section, the limitation on the time period
for credit or refund of any amount attributable to a
deduction for improperly claimed ERTC wages shall not expire
before the time period for such assessment expires under
paragraph (1).
``(B) Improperly claimed ertc wages.--For purposes of this
paragraph, the term `improperly claimed ERTC wages' means,
with respect to an assessment attributable to a credit
claimed under this section, the wages with respect to which a
deduction would not have been allowed if the portion of the
credit to which such assessment relates had been properly
claimed.''.
(j) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the provisions of this section shall apply to
aid, assistance, and advice provided after March 12, 2020.
(2) Due diligence requirements.--Subsections (b) and (c)
shall apply to aid, assistance, and advice provided after the
date of the enactment of this Act.
(3) Limitation on credit and refund of covid-related
employee retention tax credits.--Subsection (h) shall apply
to credits and refunds allowed or made after January 31,
2024.
(4) Amendments to extend limitation on assessment.--The
amendments made by subsection (i) shall apply to assessments
made after the date of the enactment of this Act.
(k) Transition Rule With Respect to Requirements to
Disclose Information, Maintain Client Lists, etc.--Any return
under section 6111 of the Internal Revenue Code of 1986, or
list under section 6112 of such Code, required by reason of
subsection (d) of this section to be filed or maintained,
respectively, with respect to any aid, assistance, or advice
provided by a COVID-ERTC promoter with respect to a COVID-
ERTC document before the date of the enactment of this Act,
shall not be required to be so filed or maintained (with
respect to such aid, assistance or advice) before the date
which is 90 days after such date.
(l) Provisions Not to Be Construed to Create Negative
Inferences.--
(1) No inference with respect to application of knowledge
requirement to pre-enactment conduct of covid-ertc promoters,
etc.--Subsection (b) shall not be construed to create any
inference with respect to the proper application of section
6701(a)(3) of the Internal Revenue Code of 1986 with respect
to any aid, assistance, or advice provided by any COVID-ERTC
promoter on or before the date of the enactment of this Act
(or with respect to any other aid, assistance, or advice to
which such subsection does not apply).
(2) Requirements to disclose information, maintain client
lists, etc.--Subsections (d) and (k) shall not be construed
to create any inference with respect to whether any COVID-
related employee retention tax credit is (without regard to
subsection (d)) a listed transaction (or reportable
transaction) with respect to any COVID-ERTC promoter; and,
for purposes of subsection (j), a return or list shall not be
treated as required (with respect to such aid, assistance, or
advice) by reason of subsection (d) if such return or list
would be so required without regard to subsection (d).
(m) Regulations.--The Secretary (as defined in subsection
(c)(5)) shall issue such regulations or other guidance as may
be necessary or appropriate to carry out the purposes of this
section (and the amendments made by this section).
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