[Congressional Record Volume 170, Number 80 (Wednesday, May 8, 2024)]
[Senate]
[Pages S3607-S3615]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2052. Mr. WYDEN submitted an amendment intended to be proposed by
him 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:
DIVISION B--TAX RELIEF
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; ETC.
(a) Short Title.--This division may be cited as the ``Tax
Relief for American Families and Workers Act of 2024''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this division 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 of this
division is as follows:
Sec. 1. Short title; table of contents; etc.
TITLE I--TAX RELIEF FOR WORKING FAMILIES
Sec. 101. Per-child calculation of refundable portion of child tax
credit.
Sec. 102. Increase in refundable portion.
Sec. 103. Inflation of credit amount.
Sec. 104. Rule for determination of earned income.
Sec. 105. Special rule for certain early-filed 2023 returns.
TITLE II--AMERICAN INNOVATION AND GROWTH
Sec. 201. Deduction for domestic research and experimental
expenditures.
Sec. 202. Extension of allowance for depreciation, amortization, or
depletion in determining the limitation on business
interest.
Sec. 203. Extension of 100 percent bonus depreciation.
Sec. 204. Increase in limitations on expensing of depreciable business
assets.
TITLE III--INCREASING GLOBAL COMPETITIVENESS
Subtitle A--United States-Taiwan Expedited Double-Tax Relief Act
Sec. 301. Short title.
Sec. 302. Special rules for taxation of certain residents of Taiwan.
Subtitle B--United States-Taiwan Tax Agreement Authorization Act
Sec. 311. Short title.
Sec. 312. Definitions.
Sec. 313. Authorization to negotiate and enter into agreement.
Sec. 314. Consultations with Congress.
Sec. 315. Approval and implementation of agreement.
Sec. 316. Submission to Congress of agreement and implementation
policy.
Sec. 317. Consideration of approval legislation and implementing
legislation.
Sec. 318. Relationship of agreement to Internal Revenue Code of 1986.
Sec. 319. Authorization of subsequent tax agreements relative to
Taiwan.
Sec. 320. United States treatment of double taxation matters with
respect to Taiwan.
TITLE IV--ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES
Sec. 401. Short title.
Sec. 402. Extension of rules for treatment of certain disaster-related
personal casualty losses.
Sec. 403. Exclusion from gross income for compensation for losses or
damages resulting from certain wildfires.
Sec. 404. East Palestine disaster relief payments.
TITLE V--MORE AFFORDABLE HOUSING
Sec. 501. State housing credit ceiling increase for low-income housing
credit.
Sec. 502. Tax-exempt bond financing requirement.
TITLE VI--TAX ADMINISTRATION AND ELIMINATING FRAUD
Sec. 601. Increase in threshold for requiring information reporting
with respect to certain payees.
Sec. 602. Enforcement provisions with respect to COVID-related employee
retention credits.
TITLE I--TAX RELIEF FOR WORKING FAMILIES
SEC. 101. PER-CHILD CALCULATION OF REFUNDABLE PORTION OF
CHILD TAX CREDIT.
(a) In General.--Subparagraph (A) of section 24(h)(5) is
amended to read as follows:
``(A) In general.--In applying subsection (d)--
``(i) the amount determined under paragraph (1)(A) of such
subsection with respect to any qualifying child shall not
exceed $1,400, and such paragraph shall be applied without
regard to paragraph (4) of this subsection, and
``(ii) paragraph (1)(B) of such subsection shall be applied
by multiplying each of--
``(I) the amount determined under clause (i) thereof, and
``(II) the excess determined under clause (ii) thereof,
by the number of qualifying children of the taxpayer.''.
(b) Conforming Amendment.--The heading of paragraph (5) of
section 24(h) is amended by striking ``Maximum amount of''
and inserting ``Special rules for''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 102. INCREASE IN REFUNDABLE PORTION.
(a) In General.--Paragraph (5) of section 24(h) is amended
by redesignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new
subparagraph:
``(B) Amounts for 2023, 2024, and 2025.--In the case of a
taxable year beginning after 2022, subparagraph (A) shall be
applied by substituting for `$1,400'--
``(i) in the case of taxable year 2023, `$1,800',
``(ii) in the case of taxable year 2024, `$1,900', and
``(iii) in the case of taxable year 2025, `$2,000'.''.
(b) Conforming Amendment.--Subparagraph (C) of section
24(h)(5), as redesignated by subsection (a), is amended by
inserting ``and before 2023'' after ``2018''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 103. INFLATION OF CREDIT AMOUNT.
(a) In General.--Paragraph (2) of section 24(h) is
amended--
(1) by striking ``amount.--Subsection'' and inserting
``amount.--
``(A) In general.--Subsection'', and
(2) by adding at the end the following new subparagraph:
``(B) Adjustment for inflation.--In the case of a taxable
year beginning after 2023, the $2,000 amounts in subparagraph
(A) and paragraph (5)(B)(iii) shall each be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `2022' for `2016' in
subparagraph (A)(ii) thereof.
If any increase under this subparagraph is not a multiple of
$100, such increase shall be rounded to the next lowest
multiple of $100.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2023.
SEC. 104. RULE FOR DETERMINATION OF EARNED INCOME.
(a) In General.--Paragraph (6) of section 24(h) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``credit.--Subsection'' and inserting
``credit.--
``(A) In general.--Subsection'', and
(2) by adding at the end the following new subparagraphs
``(B) Rule for determination of earned income.--
``(i) In general.--In the case of a taxable year beginning
after 2023, if the earned income of the taxpayer for such
taxable year is less than the earned income of the taxpayer
for the preceding taxable year, subsection (d)(1)(B)(i) may,
at the election of the taxpayer, be applied by substituting--
``(I) the earned income for such preceding taxable year,
for
``(II) the earned income for the current taxable year.
``(ii) Application to joint returns.--For purposes of
clause (i), in the case of a joint return, the earned income
of the taxpayer for the preceding taxable year shall be the
sum of the earned income of each spouse for such preceding
taxable year.''.
(b) Errors Treated as Mathematical Errors.--Paragraph (2)
of section 6213(g) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of subparagraph (U),
by striking the period at the end of subparagraph (V) and
inserting ``, and'', and by inserting after subparagraph (V)
the following new subparagraph:
``(W) in the case of a taxpayer electing the application of
section 24(h)(6)(B) for any taxable year, an entry on a
return of earned income pursuant to such section which is
inconsistent with the amount of such earned income determined
by the Secretary for the preceding taxable year.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2023.
[[Page S3608]]
SEC. 105. SPECIAL RULE FOR CERTAIN EARLY-FILED 2023 RETURNS.
In the case of an individual who claims, on the taxpayer's
return of tax for the first taxable year beginning after
December 31, 2022, a credit under section 24 of the Internal
Revenue Code of 1986 which is determined without regard to
the amendments made by sections 101 and 102 of this division,
the Secretary of the Treasury (or the Secretary's delegate)
shall, to the maximum extent practicable--
(1) redetermine the amount of such credit (after taking
into account such amendments) on the basis of the information
provided by the taxpayer on such return, and
(2) to the extent that such redetermination results in an
overpayment of tax, credit or refund such overpayment as
expeditiously as possible.
TITLE II--AMERICAN INNOVATION AND GROWTH
SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EXPERIMENTAL
EXPENDITURES.
(a) Delay of Amortization of Domestic Research and
Experimental Expenditures.--Section 174 is amended by adding
at the end the following new subsection:
``(e) Suspension of Application of Section to Domestic
Research and Experimental Expenditures.--In the case of any
domestic research or experimental expenditures (as defined in
section 174A(b)), this section--
``(1) shall apply to such expenditures paid or incurred in
taxable years beginning after December 31, 2025, and
``(2) shall not apply to such expenditures paid or incurred
in taxable years beginning on or before such date.''.
(b) Reinstatement of Expensing for Domestic Research and
Experimental Expenditures.--Part VI of subchapter B of
chapter 1 is amended by inserting after section 174 the
following new section:
``SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH AND
EXPERIMENTAL EXPENDITURES.
``(a) Treatment as Expenses.--Notwithstanding section 263,
there shall be allowed as a deduction any domestic research
or experimental expenditures which are paid or incurred by
the taxpayer during the taxable year.
``(b) Domestic Research or Experimental Expenditures.--For
purposes of this section, the term `domestic research or
experimental expenditures' means research or experimental
expenditures paid or incurred by the taxpayer in connection
with the taxpayer's trade or business other than such
expenditures which are attributable to foreign research
(within the meaning of section 41(d)(4)(F)).
``(c) Amortization of Certain Domestic Research and
Experimental Expenditures.--
``(1) In general.--At the election of the taxpayer, made in
accordance with regulations or other guidance provided by the
Secretary, in the case of domestic research or experimental
expenditures which would (but for subsection (a)) be
chargeable to capital account but not chargeable to property
of a character which is subject to the allowance under
section 167 (relating to allowance for depreciation, etc.) or
section 611 (relating to allowance for depletion), subsection
(a) shall not apply and the taxpayer shall--
``(A) charge such expenditures to capital account, and
``(B) be allowed an amortization deduction of such
expenditures ratably over such period of not less than 60
months as may be selected by the taxpayer (beginning with the
month in which the taxpayer first realizes benefits from such
expenditures).
``(2) Time for and scope of election.--The election
provided by paragraph (1) may be made for any taxable year,
but only if made not later than the time prescribed by law
for filing the return for such taxable year (including
extensions thereof). The method so elected, and the period
selected by the taxpayer, shall be adhered to in computing
taxable income for the taxable year for which the election is
made and for all subsequent taxable years unless, with the
approval of the Secretary, a change to a different method (or
to a different period) is authorized with respect to part or
all of such expenditures. The election shall not apply to any
expenditure paid or incurred during any taxable year before
the taxable year for which the taxpayer makes the election.
``(d) Election to Capitalize Expenses.--In the case of a
taxpayer which elects (at such time and in such manner as the
Secretary may provide) the application of this subsection,
subsections (a) and (c) shall not apply and domestic research
or experimental expenditures shall be chargeable to capital
account. Such election shall not apply to any expenditure
paid or incurred during any taxable year before the taxable
year for which the taxpayer makes the election and may be
made with respect to part of the expenditures paid or
incurred during any taxable year only with the approval of
the Secretary.
``(e) Special Rules.--
``(1) Land and other property.--This section shall not
apply to any expenditure for the acquisition or improvement
of land, or for the acquisition or improvement of property to
be used in connection with the research or experimentation
and of a character which is subject to the allowance under
section 167 (relating to allowance for depreciation, etc.) or
section 611 (relating to allowance for depletion); but for
purposes of this section allowances under section 167, and
allowances under section 611, shall be considered as
expenditures.
``(2) Exploration expenditures.--This section shall not
apply to any expenditure paid or incurred for the purpose of
ascertaining the existence, location, extent, or quality of
any deposit of ore or other mineral (including oil and gas).
``(3) Software development.--For purposes of this section,
any amount paid or incurred in connection with the
development of any software shall be treated as a research or
experimental expenditure.
``(f) Termination.--
``(1) In general.--This section shall not apply to amounts
paid or incurred in taxable years beginning after December
31, 2025.
``(2) Change in method of accounting.--In the case of a
taxpayer's first taxable year beginning after December 31,
2025, paragraph (1) (and the corresponding application of
section 174) shall be treated as a change in method of
accounting for purposes of section 481 and--
``(A) such change shall be treated as initiated by the
taxpayer,
``(B) such change shall be treated as made with the consent
of the Secretary, and
``(C) such change shall be applied only on a cut-off basis
for any domestic research or experimental expenditures paid
or incurred in taxable years beginning after December 31,
2025, and no adjustment under section 481(a) shall be
made.''.
(c) Coordination With Certain Other Provisions.--
(1) Research credit.--
(A) Section 41(d)(1)(A) is amended by inserting ``or
domestic research or experimental expenditures under section
174A'' after ``section 174''.
(B) Section 280C(c)(1) is amended to read as follows:
``(1) In general.--The domestic research or experimental
expenditures otherwise taken into account under section 174
or 174A (as the case may be) shall be reduced by the amount
of the credit allowed under section 41(a).''.
(2) AMT adjustment.--Section 56(b)(2) is amended by
striking ``174(a)'' each place it appears and inserting
``174A(a)''.
(3) Optional 10-year writeoff.--Section 59(e)(2)(B) is
amended by striking ``section 174(a) (relating to research
and experimental expenditures)'' and inserting ``section
174A(a) (relating to temporary rules for domestic research
and experimental expenditures)''.
(4) Qualified small issue bonds.--Section 144(a)(4)(C)(iv)
is amended by striking ``174(a)'' and inserting ``174A(a)''.
(5) Start-up expenditures.--Section 195(c)(1) is amended by
striking ``or 174'' in the last sentence and inserting ``174,
or 174A''.
(6) Capital expenditures.--
(A) Section 263(a)(1)(B) is amended by inserting `` or
174A'' after ``174''.
(B) Section 263A(c)(2) is amended by inserting ``or 174A''
after ``174''.
(7) Active business computer software royalties.--Section
543(d)(4)(A)(i) is amended by inserting ``174A,'' after
``174,''.
(8) Source rules.--Section 864(g)(2) is amended in the last
sentence--
(A) by striking ``treated as deferred expenses under
subsection (b) of section 174'' and inserting ``allowed as an
amortization deduction under section 174(a) or section
174A(c),'', and
(B) by striking ``such subsection'' and inserting ``such
section (as the case may be)''.
(9) Basis adjustment.--Section 1016(a)(14) is amended by
striking ``deductions as deferred expenses under section
174(b)(1) (relating to research and experimental
expenditures)'' and inserting ``deductions under section 174
or 174A''.
(10) Small business stock.--Section 1202(e)(2)(B) is
amended by striking ``research and experimental expenditures
under section 174'' and inserting ``specified research or
experimental expenditures under section 174 or domestic
research or experimental expenditures under section 174A''.
(d) Conforming Amendments.--
(1) Section 13206 of Public Law 115-97 is amended by
striking subsection (b) (relating to change in method of
accounting).
(2) The table of sections for part VI of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 174 the following new item:
``Sec. 174A. Temporary rules for domestic research and experimental
expenditures.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to amounts paid or incurred in taxable years beginning after
December 31, 2021.
(2) Coordination with research credit.--The amendment made
by subsection (c)(1)(B) shall apply to taxable years
beginning after December 31, 2022.
(3) Repeal of superceded change in method of accounting
rules.--The amendment made by subsection (d)(1) shall take
effect as if included in Public Law 115-97.
(4) No inference with respect to coordination with research
credit for prior periods.--The amendment made by subsection
(c)(1)(B) shall not be construed to create any inference with
respect to the proper application of section 280C(c) of the
Internal Revenue Code of 1986 with respect to taxable years
beginning before January 1, 2023.
(f) Transition Rules.--
(1) In general.--Except as otherwise provided by the
Secretary, an election made
[[Page S3609]]
under subsection (c) or (d) of section 174A of the Internal
Revenue Code of 1986 (as added by this section) for the
taxpayer's first taxable year beginning after December 31,
2021, shall not fail to be treated as timely made (or as made
on the return) if made during the 1-year period beginning on
the date of the enactment of this Act on an amended return
for the taxpayer's first taxable year beginning after
December 31, 2021, or in such other manner as the Secretary
may provide.
(2) Election regarding treatment as change in method of
accounting.--In the case of any taxpayer which (as of the
date of the enactment of this Act) had adopted a method of
accounting provided by section 174 of the Internal Revenue
Code of 1986 (as in effect prior to the amendments made by
this section) for the taxpayer's first taxable year beginning
after December 31, 2021, and elects the application of this
paragraph--
(A) the amendments made by this section shall be treated as
a change in method of accounting for purposes of section 481
of such Code,
(B) such change shall be treated as initiated by the
taxpayer for the taxpayer's immediately succeeding taxable
year,
(C) such change shall be treated as made with the consent
of the Secretary,
(D) such change shall be applied on a modified cut-off
basis, taking into account for purposes of section 481(a) of
such Code only the domestic research or experimental
expenditures (as defined in section 174A(b) of such Code (as
added by this section) and determined by applying the rules
of section 174A(e) of such Code) paid or incurred in the
taxpayer's first taxable year beginning after December 31,
2021, and not allowed as a deduction in such taxable year,
and
(E) in the case of a taxpayer which elects the application
of this subparagraph, the amount of such change (as
determined under subparagraph (D)) shall be taken into
account ratably over the 2-taxable-year period beginning with
the taxable year referred to in subparagraph (B).
(3) Election regarding 10-year writeoff.--
(A) In general.--Except as otherwise provided by the
Secretary, an eligible taxpayer which files, during the 1-
year period beginning on the date of the enactment of this
Act, an amended income tax return for the taxable year
described in subparagraph (B)(ii) may elect the application
of section 59(e) of the Internal Revenue Code of 1986 with
respect to qualified expenditures described in section
59(e)(2)(B) of such Code (as amended by subsection (c)(3))
with respect to such taxable year. Such election shall be
filed with such amended income tax return and shall be
effective only to the extent that such election would have
been effective if filed with the original income tax return
for such taxable year (determined after taking into account
the amendment made by subsection (c)(3)).
(B) Eligible taxpayer.--For purposes of subparagraph (A),
the term ``eligible taxpayer'' means any taxpayer which--
(i) does not elect the application of paragraph (2), and
(ii) filed an income tax return for such taxpayer's first
taxable year beginning after December 31, 2021, before the
earlier of--
(I) the due date for such return, and
(II) the date of the enactment of this Act.
(4) Election regarding coordination with research credit.--
Except as otherwise provided by the Secretary, an eligible
taxpayer (as defined in paragraph (3)(B) without regard to
clause (i) thereof) which files, during the 1-year period
beginning on the date of the enactment of this Act, an
amended income tax return for the taxpayer's first taxable
year beginning after December 31, 2021, may, notwithstanding
subparagraph (C) of section 280C(c)(2) of the Internal
Revenue Code of 1986 make, or revoke, on such amended return
the election under such section for such taxable year.
SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION,
AMORTIZATION, OR DEPLETION IN DETERMINING THE
LIMITATION ON BUSINESS INTEREST.
(a) In General.--Section 163(j)(8)(A)(v) is amended by
striking ``January 1, 2022'' and inserting ``January 1,
2026''.
(b) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendment made by this section shall apply to
taxable years beginning after December 31, 2023.
(2) Election to apply extension retroactively.--In the case
of a taxpayer which elects (at such time and in such manner
as the Secretary may provide) the application of this
paragraph, paragraph (1) shall be applied by substituting
``December 31, 2021'' for ``December 31, 2023''.
SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIATION.
(a) In General.--Section 168(k)(6)(A) is amended--
(1) in clause (i)--
(A) by striking ``2023'' and inserting ``2026'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(b) Property With Longer Production Periods.--Section
168(k)(6)(B) is amended--
(1) in clause (i)--
(A) by striking ``2024'' and inserting ``2027'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(c) Plants Bearing Fruits and Nuts.--Section 168(k)(6)(C)
is amended--
(1) in clause (i)--
(A) by striking ``2023'' and inserting ``2026'', and
(B) by adding ``and'' at the end, and
(2) by striking clauses (ii), (iii), and (iv), and
redesignating clause (v) as clause (ii).
(d) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to property placed in service after December 31, 2022.
(2) Plants bearing fruits and nuts.--The amendments made by
subsection (c) shall apply to specified plants planted or
grafted after December 31, 2022.
SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DEPRECIABLE
BUSINESS ASSETS.
(a) In General.--Section 179(b) is amended--
(1) by striking ``$1,000,000'' in paragraph (1) and
inserting ``$1,290,000'', and
(2) by striking ``$2,500,000'' in paragraph (2) and
inserting ``$3,220,000''.
(b) Inflation Adjustment.--Section 179(b)(6) is amended--
(1) by striking ``2018'' and inserting ``2024 (2018 in the
case of the dollar amount in paragraph (5)(A))'', and
(2) by striking `` `calendar year 2017'' and inserting ``
`calendar year 2024' (`calendar year 2017' in the case of the
dollar amount in paragraph (5)(A))''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service in taxable years
beginning after December 31, 2023.
TITLE III--INCREASING GLOBAL COMPETITIVENESS
Subtitle A--United States-Taiwan Expedited Double-Tax Relief Act
SEC. 301. SHORT TITLE.
This subtitle may be cited as the ``United States-Taiwan
Expedited Double-Tax Relief Act''.
SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN RESIDENTS OF
TAIWAN.
(a) In General.--Subpart D of part II of subchapter N of
chapter 1 is amended by inserting after section 894 the
following new section:
``SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF TAIWAN.
``(a) Certain Income From United States Sources.--
``(1) Interest, dividends, and royalties, etc.--
``(A) In general.--In the case of interest (other than
original issue discount), dividends, royalties, amounts
described in section 871(a)(1)(C), and gains described in
section 871(a)(1)(D) received by or paid to a qualified
resident of Taiwan--
``(i) sections 871(a), 881(a), 1441(a), 1441(c)(5), and
1442(a) shall each be applied by substituting `the applicable
percentage (as defined in section 894A(a)(1)(C))' for `30
percent' each place it appears, and
``(ii) sections 871(a), 881(a), and 1441(c)(1) shall each
be applied by substituting `a United States permanent
establishment of a qualified resident of Taiwan' for `a trade
or business within the United States' each place it appears.
``(B) Exceptions.--
``(i) In general.--Subparagraph (A) shall not apply to--
``(I) any dividend received from or paid by a real estate
investment trust which is not a qualified REIT dividend,
``(II) any amount subject to section 897,
``(III) any amount received from or paid by an expatriated
entity (as defined in section 7874(a)(2)) to a foreign
related person (as defined in section 7874(d)(3)), and
``(IV) any amount which is included in income under section
860C to the extent that such amount does not exceed an excess
inclusion with respect to a REMIC.
``(ii) Qualified reit dividend.--For purposes of clause
(i)(I), the term `qualified REIT dividend' means any dividend
received from or paid by a real estate investment trust if
such dividend is paid with respect to a class of shares that
is publicly traded and the recipient of the dividend is a
person who holds an interest in any class of shares of the
real estate investment trust of not more than 5 percent.
``(C) Applicable percentage.--For purposes of applying
subparagraph (A)(i)--
``(i) In general.--Except as provided in clause (ii), the
term `applicable percentage' means 10 percent.
``(ii) Special rules for dividends.-- In the case of any
dividend in respect of stock received by or paid to a
qualified resident of Taiwan, the applicable percentage shall
be 15 percent (10 percent in the case of a dividend which
meets the requirements of subparagraph (D) and is received by
or paid to an entity taxed as a corporation in Taiwan).
``(D) Requirements for lower dividend rate.--
``(i) In general.--The requirements of this subparagraph
are met with respect to any dividend in respect of stock in a
corporation if, at all times during the 12-month period
ending on the date such stock becomes ex-dividend with
respect to such dividend--
``(I) the dividend is derived by a qualified resident of
Taiwan, and
``(II) such qualified resident of Taiwan has held directly
at least 10 percent (by vote and
[[Page S3610]]
value) of the total outstanding shares of stock in such
corporation.
For purposes of subclause (II), a person shall be treated as
directly holding a share of stock during any period described
in the preceding sentence if the share was held by a
corporation from which such person later acquired that share
and such corporation was, at the time the share was acquired,
both a connected person to such person and a qualified
resident of Taiwan.
``(ii) Exception for rics and reits.--Notwithstanding
clause (i), the requirements of this subparagraph shall not
be treated as met with respect to any dividend paid by a
regulated investment company or a real estate investment
trust.
``(2) Qualified wages.--
``(A) In general.--No tax shall be imposed under this
chapter (and no amount shall be withheld under section
1441(a) or chapter 24) with respect to qualified wages paid
to a qualified resident of Taiwan who--
``(i) is not a resident of the United States (determined
without regard to subsection (c)(3)(E)), or
``(ii) is employed as a member of the regular component of
a ship or aircraft operated in international traffic.
``(B) Qualified wages.--
``(i) In general.--The term `qualified wages' means wages,
salaries, or similar remunerations with respect to employment
involving the performance of personal services within the
United States which--
``(I) are paid by (or on behalf of) any employer other than
a United States person, and
``(II) are not borne by a United States permanent
establishment of any person other than a United States
person.
``(ii) Exceptions.--Such term shall not include directors'
fees, income derived as an entertainer or athlete, income
derived as a student or trainee, pensions, amounts paid with
respect to employment with the United States, any State (or
political subdivision thereof), or any possession of the
United States (or any political subdivision thereof), or
other amounts specified in regulations or guidance under
subsection (f)(1)(F).
``(3) Income derived from entertainment or athletic
activities.--
``(A) In general.--No tax shall be imposed under this
chapter (and no amount shall be withheld under section
1441(a) or chapter 24) with respect to income derived by an
entertainer or athlete who is a qualified resident of Taiwan
from personal activities as such performed in the United
States if the aggregate amount of gross receipts from such
activities for the taxable year do not exceed $30,000.
``(B) Exception.--Subparagraph (A) shall not apply with
respect to--
``(i) income which is qualified wages (as defined in
paragraph (2)(B), determined without regard to clause (ii)
thereof), or
``(ii) income which is effectively connected with a United
States permanent establishment.
``(b) Income Connected With a United States Permanent
Establishment of a Qualified Resident of Taiwan.--
``(1) In general.--
``(A) In general.--In lieu of applying sections 871(b) and
882, a qualified resident of Taiwan that carries on a trade
or business within the United States through a United States
permanent establishment shall be taxable as provided in
section 1, 11, 55, or 59A, on its taxable income which is
effectively connected with such permanent establishment.
``(B) Determination of taxable income.--In determining
taxable income for purposes of paragraph (1), gross income
includes only gross income which is effectively connected
with the permanent establishment.
``(2) Treatment of dispositions of united states real
property.--In the case of a qualified resident of Taiwan,
section 897(a) shall be applied--
``(A) by substituting `carried on a trade or business
within the United States through a United States permanent
establishment' for `were engaged in a trade or business
within the United States', and
``(B) by substituting `such United States permanent
establishment' for `such trade or business'.
``(3) Treatment of branch profits taxes.--In the case of
any corporation which is a qualified resident of Taiwan,
section 884 shall be applied--
``(A) by substituting `10 percent' for `30 percent ' in
subsection (a) thereof, and
``(B) by substituting `a United States permanent
establishment of a qualified resident of Taiwan' for `the
conduct of a trade or business within the United States' in
subsection (d)(1) thereof.
``(4) Special rule with respect to income derived from
certain entertainment or athletic activities.--
``(A) In general.--Paragraph (1) shall not apply to the
extent that the income is derived--
``(i) in respect of entertainment or athletic activities
performed in the United States, and
``(ii) by a qualified resident of Taiwan who is not the
entertainer or athlete performing such activities.
``(B) Exception.--Subparagraph (A) shall not apply if the
person described in subparagraph (A)(ii) is contractually
authorized to designate the individual who is to perform such
activities.
``(5) Special rule with respect to certain amounts.--
Paragraph (1) shall not apply to any income which is wages,
salaries, or similar remuneration with respect to employment
or with respect to any amount which is described in
subsection (a)(2)(B)(ii).
``(c) Qualified Resident of Taiwan.--For purposes of this
section--
``(1) In general.--The term `qualified resident of Taiwan'
means any person who--
``(A) is liable to tax under the laws of Taiwan by reason
of such person's domicile, residence, place of management,
place of incorporation, or any similar criterion,
``(B) is not a United States person (determined without
regard to paragraph (3)(E)), and
``(C) in the case of an entity taxed as a corporation in
Taiwan, meets the requirements of paragraph (2).
``(2) Limitation on benefits for corporate entities of
taiwan.--
``(A) In general.--Subject to subparagraphs (E) and (F), an
entity meets the requirements of this paragraph only if it--
``(i) meets the ownership and income requirements of
subparagraph (B),
``(ii) meets the publicly traded requirements of
subparagraph (C), or
``(iii) meets the qualified subsidiary requirements of
subparagraph (D).
``(B) Ownership and income requirements.--The requirements
of this subparagraph are met for an entity if--
``(i) at least 50 percent (by vote and value) of the total
outstanding shares of stock in such entity are owned directly
or indirectly by qualified residents of Taiwan, and
``(ii) less than 50 percent of such entity's gross income
(and in the case of an entity that is a member of a tested
group, less than 50 percent of the tested group's gross
income) is paid or accrued, directly or indirectly, in the
form of payments that are deductible for purposes of the
income taxes imposed by Taiwan, to persons who are not--
``(I) qualified residents of Taiwan, or
``(II) United States persons who meet such requirements
with respect to the United States as determined by the
Secretary to be equivalent to the requirements of this
subsection (determined without regard to paragraph (1)(B))
with respect to residents of Taiwan.
``(C) Publicly traded requirements.--An entity meets the
requirements of this subparagraph if--
``(i) the principal class of its shares (and any
disproportionate class of shares) of such entity are
primarily and regularly traded on an established securities
market in Taiwan, or
``(ii) the primary place of management and control of the
entity is in Taiwan and all classes of its outstanding shares
described in clause (i) are regularly traded on an
established securities market in Taiwan.
``(D) Qualified subsidiary requirements.--An entity meets
the requirement of this subparagraph if--
``(i) at least 50 percent (by vote and value) of the total
outstanding shares of the stock of such entity are owned
directly or indirectly by 5 or fewer entities--
``(I) which meet the requirements of subparagraph (C), or
``(II) which are United States persons the principal class
of the shares (and any disproportionate class of shares) of
which are primarily and regularly traded on an established
securities market in the United States, and
``(ii) the entity meets the requirements of clause (ii) of
subparagraph (B).
``(E) Only indirect ownership through qualifying
intermediaries counted.--
``(i) In general.--Stock in an entity owned by a person
indirectly through 1 or more other persons shall not be
treated as owned by such person in determining whether the
person meets the requirements of subparagraph (B)(i) or
(D)(i) unless all such other persons are qualifying
intermediate owners.
``(ii) Qualifying intermediate owners.--The term
`qualifying intermediate owner' means a person that is--
``(I) a qualified resident of Taiwan, or
``(II) a resident of any other foreign country (other than
a foreign country that is a foreign country of concern) that
has in effect a comprehensive convention with the United
States for the avoidance of double taxation.
``(iii) Special rule for qualified subsidiaries.--For
purposes of applying subparagraph (D)(i), the term
`qualifying intermediate owner' shall include any person who
is a United States person who meets such requirements with
respect to the United States as determined by the Secretary
to be equivalent to the requirements of this subsection
(determined without regard to paragraph (1)(B)) with respect
to residents of Taiwan.
``(F) Certain payments not included.--In determining
whether the requirements of subparagraph (B)(ii) or (D)(ii)
are met with respect to an entity, the following payments
shall not be taken into account:
``(i) Arm's-length payments by the entity in the ordinary
course of business for services or tangible property.
``(ii) In the case of a tested group, intra-group
transactions.
``(3) Dual residents.--
``(A) Rules for determination of status.--
``(i) In general.--An individual who is an applicable dual
resident and who is described in subparagraph (B), (C), or
(D) shall be treated as a qualified resident of Taiwan.
``(ii) Applicable dual resident.--For purposes of this
paragraph, the term `applicable dual resident' means an
individual who--
``(I) is not a United States citizen,
[[Page S3611]]
``(II) is a resident of the United States (determined
without regard to subparagraph (E)), and
``(III) would be a qualified resident of Taiwan but for
paragraph (1)(B).
``(B) Permanent home.--An individual is described in this
subparagraph if such individual--
``(i) has a permanent home available to such individual in
Taiwan, and
``(ii) does not have a permanent home available to such
individual in the United States.
``(C) Center of vital interests.--An individual is
described in this subparagraph if--
``(i) such individual has a permanent home available to
such individual in both Taiwan and the United States, and
``(ii) such individual's personal and economic relations
(center of vital interests) are closer to Taiwan than to the
United States.
``(D) Habitual abode.--An individual is described in this
subparagraph if--
``(i) such individual--
``(I) does not have a permanent home available to such
individual in either Taiwan or the United States, or
``(II) has a permanent home available to such individual in
both Taiwan and the United States but such individual's
center of vital interests under subparagraph (C)(ii) cannot
be determined, and
``(ii) such individual has a habitual abode in Taiwan and
not the United States.
``(E) United states tax treatment of qualified resident of
taiwan.--Notwithstanding section 7701, an individual who is
treated as a qualified resident of Taiwan by reason of this
paragraph for all or any portion of a taxable year shall not
be treated as a resident of the United States for purposes of
computing such individual's United States income tax
liability for such taxable year or portion thereof.
``(4) Rules of special application.--
``(A) Dividends.--For purposes of applying this section to
any dividend, paragraph (2)(D) shall be applied without
regard to clause (ii) thereof.
``(B) Items of income emanating from an active trade or
business in taiwan.--For purposes of this section--
``(i) In general.--Notwithstanding the preceding paragraphs
of this subsection, if an entity taxed as a corporation in
Taiwan is not a qualified resident of Taiwan but meets the
requirements of subparagraphs (A) and (B) of paragraph (1),
any qualified item of income such entity derived from the
United States shall be treated as income of a qualified
resident of Taiwan.
``(ii) Qualified items of income.--
``(I) In general.--The term `qualified item of income'
means any item of income which emanates from, or is
incidental to, the conduct of an active trade or business in
Taiwan (other than operating as a holding company, providing
overall supervision or administration of a group of
companies, providing group financing, or making or managing
investments (unless such making or managing investments is
carried on by a bank, insurance company, or registered
securities dealer in the ordinary course of its business as
such)).
``(II) Substantial activity requirement.--An item of income
which is derived from a trade or business conducted in the
United States or from a connected person shall be a qualified
item of income only if the trade or business activity
conducted in Taiwan to which the item is related is
substantial in relation to the same or a complementary trade
or business activity carried on in the United States. For
purposes of applying this subclause, activities conducted by
persons that are connected to the entity described in clause
(i) shall be deemed to be conducted by such entity.
``(iii) Exception.--This subparagraph shall not apply to
any item of income derived by an entity if at least 50
percent (by vote or value) of such entity is owned (directly
or indirectly) or controlled by residents of a foreign
country of concern.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) United states permanent establishment.--
``(A) In general.--The term `United States permanent
establishment' means, with respect to a qualified resident of
Taiwan, a permanent establishment of such resident which is
within the United States.
``(B) Special rule.--The determination of whether there is
a permanent establishment of a qualified resident of Taiwan
within the United States shall be made without regard to
whether an entity which is taxed as a corporation in Taiwan
and which is a qualified resident of Taiwan controls or is
controlled by--
``(i) a domestic corporation, or
``(ii) any other person that carries on business in the
United States (whether through a permanent establishment or
otherwise).
``(2) Permanent establishment.--
``(A) In general.--The term `permanent establishment' means
a fixed place of business through which a trade or business
is wholly or partly carried on. Such term shall include--
``(i) a place of management,
``(ii) a branch,
``(iii) an office,
``(iv) a factory,
``(v) a workshop, and
``(vi) a mine, an oil or gas well, a quarry, or any other
place of extraction of natural resources.
``(B) Special rules for certain temporary projects.--
``(i) In general.--A building site or construction or
installation project, or an installation or drilling rig or
ship used for the exploration or exploitation of the sea bed
and its subsoil and their natural resources, constitutes a
permanent establishment only if it lasts, or the activities
of the rig or ship lasts, for more than 12 months.
``(ii) Determination of 12-month period.--For purposes of
clause (i), the period over which a building site or
construction or installation project of a person lasts shall
include any period of more than 30 days during which such
person does not carry on activities at such building site or
construction or installation project but connected activities
are carried on at such building site or construction or
installation project by one or more connected persons.
``(C) Habitual exercise of contract authority treated as
permanent establishment.--Notwithstanding subparagraphs (A)
and (B), where a person (other than an agent of an
independent status to whom subparagraph (D)(ii) applies) is
acting on behalf of a trade or business of a qualified
resident of Taiwan and has and habitually exercises an
authority to conclude contracts that are binding on the trade
or business, that trade or business shall be deemed to have a
permanent establishment in the country in which such
authority is exercised in respect of any activities that the
person undertakes for the trade or business, unless the
activities of such person are limited to those described in
subparagraph (D)(i) that, if exercised through a fixed place
of business, would not make this fixed place of business a
permanent establishment under the provisions of that
subparagraph.
``(D) Exclusions.--
``(i) In general.--Notwithstanding subparagraphs (A) and
(B), the term `permanent establishment' shall not include--
``(I) the use of facilities solely for the purpose of
storage, display, or delivery of goods or merchandise
belonging to the trade or business,
``(II) the maintenance of a stock of goods or merchandise
belonging to the trade or business solely for the purpose of
storage, display, or delivery,
``(III) the maintenance of a stock of goods or merchandise
belonging to the trade or business solely for the purpose of
processing by another trade or business,
``(IV) the maintenance of a fixed place of business solely
for the purpose of purchasing goods or merchandise, or of
collecting information, for the trade or business,
``(V) the maintenance of a fixed place of business solely
for the purpose of carrying on, for the trade or business,
any other activity of a preparatory or auxiliary character,
or
``(VI) the maintenance of a fixed place of business solely
for any combination of the activities mentioned in subclauses
(I) through (V), provided that the overall activity of the
fixed place of business resulting from this combination is of
a preparatory or auxiliary character.
``(ii) Brokers and other independent agents.--A trade or
business shall not be considered to have a permanent
establishment in a country merely because it carries on
business in such country through a broker, general commission
agent, or any other agent of an independent status, provided
that such persons are acting in the ordinary course of their
business as independent agents.
``(3) Tested group.--The term `tested group' includes, with
respect to any entity taxed as a corporation in Taiwan, such
entity and any other entity taxed as a corporation in Taiwan
that--
``(A) participates as a member with such entity in a tax
consolidation, fiscal unity, or similar regime that requires
members of the group to share profits or losses, or
``(B) shares losses with such entity pursuant to a group
relief or other loss sharing regime.
``(4) Connected person.--Two persons shall be `connected
persons' if one owns, directly or indirectly, at least 50
percent of the interests in the other (or, in the case of a
corporation, at least 50 percent of the aggregate vote and
value of the corporation's shares) or another person owns,
directly or indirectly, at least 50 percent of the interests
(or, in the case of a corporation, at least 50 percent of the
aggregate vote and value of the corporation's shares) in each
person. In any case, a person shall be connected to another
if, based on all the relevant facts and circumstances, one
has control of the other or both are under the control of the
same person or persons.
``(5) Foreign country of concern.--The term `foreign
country of concern' has the meaning given such term under
paragraph (7) of section 9901 of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (15 U.S.C. 4651(7)), as added by section 103(a)(4) of
the CHIPS Act of 2022).
``(6) Partnerships; beneficiaries of estates and trusts.--
For purposes of this section--
``(A) a qualified resident of Taiwan which is a partner of
a partnership which carries on a trade or business within the
United States through a United States permanent establishment
shall be treated as carrying on such trade or business
through such permanent establishment, and
[[Page S3612]]
``(B) a qualified resident of Taiwan which is a beneficiary
of an estate or trust which carries on a trade or business
within the United States through a United States permanent
establishment shall be treated as carrying on such trade or
business through such permanent establishment.
``(7) Denial of benefits for certain payments through
hybrid entities.--For purposes of this section, rules similar
to the rules of section 894(c) shall apply.
``(e) Application.--
``(1) In general.--This section shall not apply to any
period unless the Secretary has determined that Taiwan has
provided benefits to United States persons for such period
that are reciprocal to the benefits provided to qualified
residents of Taiwan under this section.
``(2) Provision of reciprocity.--The President or his
designee is authorized to exchange letters, enter into an
agreement, or take other necessary and appropriate steps
relative to Taiwan for the reciprocal provision of the
benefits described in this section.
``(f) Regulations or Other Guidance.--
``(1) In general.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out the provisions of this section,
including such regulations or guidance for--
``(A) determining--
``(i) what constitutes a United States permanent
establishment of a qualified resident of Taiwan, and
``(ii) income that is effectively connected with such a
permanent establishment,
``(B) preventing the abuse of the provisions of this
section by persons who are not (or who should not be treated
as) qualified residents of Taiwan,
``(C) requirements for record keeping and reporting,
``(D) rules to assist withholding agents or employers in
determining whether a foreign person is a qualified resident
of Taiwan for purposes of determining whether withholding or
reporting is required for a payment (and, if withholding is
required, whether it should be applied at a reduced rate),
``(E) the application of subsection (a)(1)(D)(i) to stock
held by predecessor owners,
``(F) determining what amounts are to be treated as
qualified wages for purposes of subsection (a)(2),
``(G) determining the amounts to which subsection (a)(3)
applies,
``(H) defining established securities market for purposes
of subsection (c),
``(I) the application of the rules of subsection (c)(4)(B),
``(J) the application of subsection (d)(6) and section
1446,
``(K) determining ownership interests held by residents of
a foreign country of concern, and
``(L) determining the starting and ending dates for periods
with respect to the application of this section under
subsection (e), which may be separate dates for taxes
withheld at the source and other taxes.
``(2) Regulations to be consistent with model treaty.--Any
regulations or other guidance issued under this section
shall, to the extent practical, be consistent with the
provisions of the United States model income tax convention
dated February 7, 2016.''.
(b) Conforming Amendment to Withholding Tax.--Subchapter A
of chapter 3 is amended by adding at the end the following
new section:
``SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF TAIWAN.
``For reduced rates of withholding for certain residents of
Taiwan, see section 894A.''.
(c) Clerical Amendments.--
(1) The table of sections for subpart D of part II of
subchapter N of chapter 1 is amended by inserting after the
item relating to section 894 the following new item:
``Sec. 894A. Special rules for qualified residents of Taiwan.''.
(2) The table of sections for subchapter A of chapter 3 is
amended by adding at the end the following new item:
``Sec. 1447. Withholding for qualified residents of Taiwan.''.
Subtitle B--United States-Taiwan Tax Agreement Authorization Act
SEC. 311. SHORT TITLE.
This subtitle may be cited as the ``United States-Taiwan
Tax Agreement Authorization Act''.
SEC. 312. DEFINITIONS.
In this subtitle:
(1) Agreement.--The term ``Agreement'' means the tax
agreement authorized by section 313(a).
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Relations and the Committee on
Finance of the Senate; and
(B) the Committee on Ways and Means of the House of
Representatives.
(3) Approval legislation.--The term ``approval
legislation'' means legislation that approves the Agreement.
(4) Implementing legislation.--The term ``implementing
legislation'' means legislation that makes any changes to the
Internal Revenue Code of 1986 necessary to implement the
Agreement.
SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER INTO
AGREEMENT.
(a) In General.--Subsequent to a determination under
section 894A(e)(1) of the Internal Revenue Code of 1986 (as
added by the United States-Taiwan Expedited Double-Tax Relief
Act), the President is authorized to negotiate and enter into
a tax agreement relative to Taiwan.
(b) Elements of Agreement.--
(1) Conformity with bilateral income tax conventions.--The
President shall ensure that--
(A) any provisions included in the Agreement conform with
provisions customarily contained in United States bilateral
income tax conventions, as exemplified by the 2016 United
States Model Income Tax Convention; and
(B) the Agreement does not include elements outside the
scope of the 2016 United States Model Income Tax Convention.
(2) Incorporation of tax agreements and laws.--
Notwithstanding paragraph (1), the Agreement may incorporate
and restate provisions of any agreement, or existing United
States law, addressing double taxation for residents of the
United States and Taiwan.
(3) Authority.--The Agreement shall include the following
statement: ``The Agreement is entered into pursuant to the
United States-Taiwan Tax Agreement Authorization Act.''
(4) Entry into force.--The Agreement shall include a
provision conditioning entry into force upon--
(A) enactment of approval legislation and implementing
legislation pursuant to section 317; and
(B) confirmation by the Secretary of the Treasury that the
relevant authority in Taiwan has approved and taken
appropriate steps required to implement the Agreement.
SEC. 314. CONSULTATIONS WITH CONGRESS.
(a) Notification Upon Commencement of Negotiations.--The
President shall provide written notification to the
appropriate congressional committees of the commencement of
negotiations between the United States and Taiwan on the
Agreement at least 15 calendar days before commencing such
negotiations.
(b) Consultations During Negotiations.--
(1) Briefings.--Not later than 90 days after commencement
of negotiations with respect to the Agreement, and every 180
days thereafter until the President enters into the
Agreement, the President shall provide a briefing to the
appropriate congressional committees on the status of the
negotiations, including a description of elements under
negotiation.
(2) Meetings and other consultations.--
(A) In general.--In the course of negotiations with respect
to the Agreement, the Secretary of the Treasury, in
coordination with the Secretary of State, shall--
(i) meet, upon request, with the chairman or ranking member
of any of the appropriate congressional committees regarding
negotiating objectives and the status of negotiations in
progress; and
(ii) consult closely and on a timely basis with, and keep
fully apprised of the negotiations, the appropriate
congressional committees.
(B) Elements of consultations.--The consultations described
in subparagraph (A) shall include consultations with respect
to--
(i) the nature of the contemplated Agreement;
(ii) how and to what extent the contemplated Agreement is
consistent with the elements set forth in section 313(b); and
(iii) the implementation of the contemplated Agreement,
including--
(I) the general effect of the contemplated Agreement on
existing laws;
(II) proposed changes to any existing laws to implement the
contemplated Agreement; and
(III) proposed administrative actions to implement the
contemplated Agreement.
SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREEMENT.
(a) In General.--The Agreement may not enter into force
unless--
(1) the President, at least 60 days before the day on which
the President enters into the Agreement, publishes the text
of the contemplated Agreement on a publicly available website
of the Department of the Treasury; and
(2) there is enacted into law, with respect to the
Agreement, approval legislation and implementing legislation
pursuant to section 317.
(b) Entry Into Force.--The President may provide for the
Agreement to enter into force upon--
(1) enactment of approval legislation and implementing
legislation pursuant to section 317; and
(2) confirmation by the Secretary of the Treasury that the
relevant authority in Taiwan has approved and taken
appropriate steps required to implement the Agreement.
SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND
IMPLEMENTATION POLICY.
(a) Submission of Agreement.--Not later than 270 days after
the President enters into the Agreement, the President or the
President's designee shall submit to Congress--
(1) the final text of the Agreement; and
(2) a technical explanation of the Agreement.
(b) Submission of Implementation Policy.--Not later than
270 days after the President enters into the Agreement, the
Secretary of the Treasury shall submit to Congress--
(1) a description of those changes to existing laws that
the President considers would be required in order to ensure
that the United States acts in a manner consistent with the
Agreement; and
[[Page S3613]]
(2) a statement of anticipated administrative action
proposed to implement the Agreement.
SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION AND
IMPLEMENTING LEGISLATION.
(a) In General.--The approval legislation with respect to
the Agreement shall include the following: ``Congress
approves the Agreement submitted to Congress pursuant to
section 316 of the United States-Taiwan Tax Agreement
Authorization Act on ____.'', with the blank space being
filled with the appropriate date.
(b) Approval Legislation Committee Referral.--The approval
legislation shall--
(1) in the Senate, be referred to the Committee on Foreign
Relations; and
(2) in the House of Representatives, be referred to the
Committee on Ways and Means.
(c) Implementing Legislation Committee Referral.--The
implementing legislation shall--
(1) in the Senate, be referred to the Committee on Finance;
and
(2) in the House of Representatives, be referred to the
Committee on Ways and Means.
SEC. 318. RELATIONSHIP OF AGREEMENT TO INTERNAL REVENUE CODE
OF 1986.
(a) Internal Revenue Code of 1986 to Control.--No provision
of the Agreement or approval legislation, nor the application
of any such provision to any person or circumstance, which is
inconsistent with any provision of the Internal Revenue Code
of 1986, shall have effect.
(b) Construction.--Nothing in this subtitle shall be
construed--
(1) to amend or modify any law of the United States; or
(2) to limit any authority conferred under any law of the
United States,
unless specifically provided for in this subtitle.
SEC. 319. AUTHORIZATION OF SUBSEQUENT TAX AGREEMENTS RELATIVE
TO TAIWAN.
(a) In General.--Subsequent to the enactment of approval
legislation and implementing legislation pursuant to section
317--
(1) the term ``tax agreement'' in section 313(a) shall be
treated as including any tax agreement relative to Taiwan
which supplements or supersedes the Agreement to which such
approval legislation and implementing legislation relates,
and
(2) the term ``Agreement'' shall be treated as including
such tax agreement.
(b) Requirements, etc., to Apply Separately.--The
provisions of this subtitle (including section 314) shall be
applied separately with respect to each tax agreement
referred to in subsection (a).
SEC. 320. UNITED STATES TREATMENT OF DOUBLE TAXATION MATTERS
WITH RESPECT TO TAIWAN.
(a) Findings.--Congress makes the following findings:
(1) The United States addresses issues with respect to
double taxation with foreign countries by entering into
bilateral income tax conventions (known as tax treaties) with
such countries, subject to the advice and consent of the
Senate to ratification pursuant to article II of the
Constitution.
(2) The United States has entered into more than sixty such
tax treaties, which facilitate economic activity, strengthen
bilateral cooperation, and benefit United States workers,
businesses, and other United States taxpayers.
(3) Due to Taiwan's unique status, the United States is
unable to enter into an article II tax treaty with Taiwan,
necessitating an agreement to address issues with respect to
double taxation.
(b) Statement of Policy.--It is the policy of the United
States to--
(1) provide for additional bilateral tax relief with
respect to Taiwan, beyond that provided for in section 894A
of the Internal Revenue Code of 1986 (as added by the United
States-Taiwan Expedited Double-Tax Relief Act), only after
entry into force of an Agreement, as provided for in section
315, and only in a manner consistent with such Agreement; and
(2) continue to provide for bilateral tax relief with
sovereign states to address double taxation and other related
matters through entering into bilateral income tax
conventions, subject to the Senate's advice and consent to
ratification pursuant to article II of the Constitution.
TITLE IV--ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES
SEC. 401. SHORT TITLE.
This title may be cited as the ``Federal Disaster Tax
Relief Act of 2024''.
SEC. 402. EXTENSION OF RULES FOR TREATMENT OF CERTAIN
DISASTER-RELATED PERSONAL CASUALTY LOSSES.
For purposes of applying section 304(b) of the Taxpayer
Certainty and Disaster Tax Relief Act of 2020, section 301 of
such Act shall be applied by substituting ``the Federal
Disaster Tax Relief Act of 2024'' for ``this Act'' each place
it appears.
SEC. 403. EXCLUSION FROM GROSS INCOME FOR COMPENSATION FOR
LOSSES OR DAMAGES RESULTING FROM CERTAIN
WILDFIRES.
(a) In General.--For purposes of the Internal Revenue Code
of 1986, gross income shall not include any amount received
by an individual as a qualified wildfire relief payment.
(b) Qualified Wildfire Relief Payment.--For purposes of
this section--
(1) In general.--The term ``qualified wildfire relief
payment'' means any amount received by or on behalf of an
individual as compensation for losses, expenses, or damages
(including compensation for additional living expenses, lost
wages (other than compensation for lost wages paid by the
employer which would have otherwise paid such wages),
personal injury, death, or emotional distress) incurred as a
result of a qualified wildfire disaster, but only to the
extent the losses, expenses, or damages compensated by such
payment are not compensated for by insurance or otherwise.
(2) Qualified wildfire disaster.--The term ``qualified
wildfire disaster'' means any federally declared disaster (as
defined in section 165(i)(5)(A) of the Internal Revenue Code
of 1986) declared, after December 31, 2014, as a result of
any forest or range fire.
(c) Denial of Double Benefit.--Notwithstanding any other
provision of the Internal Revenue Code of 1986--
(1) no deduction or credit shall be allowed (to the person
for whose benefit a qualified wildfire relief payment is
made) for, or by reason of, any expenditure to the extent of
the amount excluded under this section with respect to such
expenditure, and
(2) no increase in the basis or adjusted basis of any
property shall result from any amount excluded under this
subsection with respect to such property.
(d) Limitation on Application.--This section shall only
apply to qualified wildfire relief payments received by the
individual during taxable years beginning after December 31,
2019, and before January 1, 2026.
SEC. 404. EAST PALESTINE DISASTER RELIEF PAYMENTS.
(a) Disaster Relief Payments to Victims of East Palestine
Train Derailment.--East Palestine train derailment payments
shall be treated as qualified disaster relief payments for
purposes of section 139(b) of the Internal Revenue Code of
1986.
(b) East Palestine Train Derailment Payments.--For purposes
of this section, the term ``East Palestine train derailment
payment'' means any amount received by or on behalf of an
individual as compensation for loss, damages, expenses, loss
in real property value, closing costs with respect to real
property (including realtor commissions), or inconvenience
(including access to real property) resulting from the East
Palestine train derailment if such amount was provided by--
(1) a Federal, State, or local government agency,
(2) Norfolk Southern Railway, or
(3) any subsidiary, insurer, or agent of Norfolk Southern
Railway or any related person.
(c) Train Derailment.--For purposes of this section, the
term ``East Palestine train derailment'' means the derailment
of a train in East Palestine, Ohio, on February 3, 2023.
(d) Effective Date.--This section shall apply to amounts
received on or after February 3, 2023.
TITLE V--MORE AFFORDABLE HOUSING
SEC. 501. STATE HOUSING CREDIT CEILING INCREASE FOR LOW-
INCOME HOUSING CREDIT.
(a) In General.--Section 42(h)(3)(I) is amended--
(1) by striking ``and 2021,'' and inserting ``2021, 2023,
2024, and 2025,'', and
(2) by striking ``2018, 2019, 2020, and 2021'' in the
heading and inserting ``certain calendar years''.
(b) Effective Date.--The amendments made by this section
shall apply to calendar years after 2022.
SEC. 502. TAX-EXEMPT BOND FINANCING REQUIREMENT.
(a) In General.--Section 42(h)(4) is amended by striking
subparagraph (B) and inserting the following:
``(B) Special rule where minimum percent of buildings is
financed with tax-exempt bonds subject to volume cap.--For
purposes of subparagraph (A), paragraph (1) shall not apply
to any portion of the credit allowable under subsection (a)
with respect to a building if--
``(i) 50 percent or more of the aggregate basis of such
building and the land on which the building is located is
financed by 1 or more obligations described in subparagraph
(A), or
``(ii)(I) 30 percent or more of the aggregate basis of such
building and the land on which the building is located is
financed by 1 or more qualified obligations, and
``(II) 1 or more of such qualified obligations--
``(aa) are part of an issue the issue date of which is
after December 31, 2023, and
``(bb) provide the financing for not less than 5 percent of
the aggregate basis of such building and the land on which
the building is located.
``(C) Qualified obligation.--For purposes of subparagraph
(B)(ii), the term `qualified obligation' means an obligation
which is described in subparagraph (A) and which is part of
an issue the issue date of which is before January 1,
2026.''.
(b) Effective Date.--
(1) In general.--The amendment made by this section shall
apply to buildings placed in service in taxable years
beginning after December 31, 2023.
(2) Rehabilitation expenditures treated as separate new
building.--In the case of any building with respect to which
any expenditures are treated as a separate new building under
section 42(e) of the Internal Revenue Code of 1986, for
purposes of paragraph (1), both the existing building and the
separate new building shall be treated as having been placed
in service on the date such expenditures are treated as
placed in service under section 42(e)(4) of such Code.
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TITLE VI--TAX ADMINISTRATION AND ELIMINATING FRAUD
SEC. 601. INCREASE IN THRESHOLD FOR REQUIRING INFORMATION
REPORTING WITH RESPECT TO CERTAIN PAYEES.
(a) In General.--Sections 6041(a) is amended by striking
``$600'' and inserting ``$1,000''.
(b) Inflation Adjustment.--Section 6041 is amended by
adding at the end the following new subsection:
``(h) Inflation Adjustment.--In the case of any calendar
year after 2024, the dollar amount in subsection (a) shall be
increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year, determined by
substituting `calendar year 2023' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
If any increase under the preceding sentence is not a
multiple of $100, such increase shall be rounded to the
nearest multiple of $100.''.
(c) Application to Reporting on Remuneration for Services
and Direct Sales.--Section 6041A is amended--
(1) in subsection (a)(2), by striking ``is $600 or more''
and inserting ``equals or exceeds the dollar amount in effect
for such calendar year under section 6041(a)'', and
(2) in subsection (b)(1)(B), by striking ``is $5,000 or
more'' and inserting ``equals or exceeds the dollar amount in
effect for such calendar year under section 6041(a)''.
(d) Application to Backup Withholding.--Section 3406(b)(6)
is amended--
(1) by striking ``$600'' in subparagraph (A) and inserting
``the dollar amount in effect for such calendar year under
section 6041(a)'', and
(2) by striking ``only where aggregate for calendar year is
$600 or more'' in the heading and inserting ``only if in
excess of threshold''.
(e) Conforming Amendments.--
(1) The heading of section 6041(a) is amended by striking
``of $600 or More'' and inserting ``Exceeding Threshold''.
(2) Section 6041(a) is amended by striking ``taxable year''
and inserting ``calendar year''.
(f) Effective Date.--The amendments made by this section
shall apply with respect to payments made after December 31,
2023.
SEC. 602. 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 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
[[Page S3615]]
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).
______