[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).
                                 ______