[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[House]
[Pages 26947-26957]
[From the U.S. Government Publishing Office, www.gpo.gov]




PROVIDING FOR CONSIDERATION OF H.R. 3056, TAX COLLECTION RESPONSIBILITY 
                              ACT OF 2007

  Mr. CARDOZA. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 719 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 719

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the bill (H.R. 
     3056) to amend the Internal Revenue Code of 1986 to repeal 
     the authority of the Internal Revenue Service to use private 
     debt collection companies, to delay implementation of 
     withholding taxes on government contractors, to revise the 
     tax rules on expatriation, and for other purposes. All points 
     of order against consideration of the bill are waived except 
     those arising under clause 9 or 10 of rule XXI. The amendment 
     in the nature of a substitute recommended by the Committee on 
     Ways and Means now printed in the bill, modified by the 
     amendment printed in the report of the Committee on Rules 
     accompanying this resolution, shall be considered as adopted. 
     The bill, as amended, shall be considered as read. All points 
     of order against provisions of the bill, as amended, are 
     waived. The previous question shall be considered as ordered 
     on the bill, as amended, to final passage without intervening 
     motion except: (1) one hour of debate equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on Ways and Means; and (2) one motion to recommit 
     with or without instructions.
       Sec. 2. During consideration of H.R. 3056 pursuant to this 
     resolution, notwithstanding the operation of the previous 
     question, the Chair may postpone further consideration of the 
     bill to such time as may be designated by the Speaker.

  The SPEAKER pro tempore (Mr. Pastor). The gentleman from California 
is recognized for 1 hour.
  Mr. CARDOZA. Mr. Speaker, for the purposes of debate only I yield the 
customary 30 minutes to the gentleman from Texas (Mr. Sessions). All 
time yielded during consideration of the rule is for debate only.


                             General Leave

  Mr. CARDOZA. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
on House Resolution 719.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, House Resolution 719 provides for consideration of H.R. 
3056, the Tax Collection Responsibility Act of 2007 under the 
traditional closed rule. The rule provides 1 hour of general debate 
equally divided and controlled by the chairman and ranking member of 
the Committee on Ways and Means. The rule waives all points of order 
against consideration of the bill except for clause 9 and 10 of rule 
XXI. Finally, the rule provides one motion to recommit with or without 
instructions.
  Mr. Speaker, the bill before us today, H.R. 3056, implements several 
measures to protect the interest of taxpayers and the integrity of our 
tax system. First, it would once and for all repeal the

[[Page 26948]]

IRS's authority to contract with private debt collection companies. The 
collection of Federal income taxes is inherently a governmental 
function and at the crux of what governmental responsibilities should 
be. This was stated as early as 1819 by Chief Justice Marshall. It was 
reaffirmed by Congress in 1874, when the Ways and Means Committee said 
that ``any system of farming the collection of any portion of the 
revenue of the government is fundamentally wrong.''
  Tax farming, giving a private entity the right to collect taxes on a 
commission basis, has created modern-day bounty hunters who have no 
regard for the taxpayer, only regard for their company's bottom line.
  Taxpayers are heavily pressured to reveal their Social Security 
numbers, last known address, date of birth, and other confidential 
information over the telephone to private contractors working on 
commissions of up to 25 percent of their take.
  In this modern day and age where identity theft runs rampant, why 
would we want to turn over people's Social Security numbers and who 
knows what other confidential information to someone who is only out to 
protect their own bottom line? Noted Princeton economist Paul Krugman 
recently penned in the New York Times, ``Tax farming went out with the 
French Revolution; now the tax farmers are back.'' How right he is.
  The irony is that we tried this private tax collection scheme in 1996 
and promptly abandoned it. Why? Because the IRS's Inspector General 
found that private contractors regularly violated our own Fair Debt 
Collection Practices Act, threatened the confidentiality of taxpayers' 
personal information, and on top of all that, cost the government a net 
revenue loss of $17 million.
  Despite this past history, the Republican Congress renewed this 
authority in 2004. What has happened since that renewal? Well, the 
Federal Government has spent an additional $71 million of taxpayers' 
hard-earned money and they have collected a grand total of $20 million 
in tax revenue. That is right, Mr. Speaker; we have lost another $50 
million on an inefficient program that experts readily admit does not 
work. Even more absurd is that had the IRS been given that money, the 
$71 million, instead, it would have collected almost $1.5 billion.
  The House has long recognized that this program simply does not work. 
In fact, language to stop private debt collection has passed on a 
strong bipartisan basis twice but has not made it into law. But don't 
just take my word for it. The National Taxpayer Advocate, appointed by 
the Treasury Secretary, reported to Congress that ``the money spent on 
the IRS Private Debt Collection initiative is an inefficient use of 
government dollars.'' Even past and present IRS Commissioners have 
repeatedly admitted before Congress that IRS employees could perform 
this task at far less cost than the private agencies.
  I firmly believe that when the government actually does something 
better than the private sector, cheaper and more efficiently than the 
private sector, then the government should do that job. The reality, 
Mr. Speaker, is that IRS employees are better trained, better equipped 
and better prepared to handle these important responsibilities. They 
also protect American citizens' privacy.
  H.R. 3056 recognizes this reality and restores this fundamental 
responsibility to the Federal Government, as our Founding Fathers 
intended. Second, H.R. 3056 includes language based on legislation 
introduced by my friend and colleague from Florida (Mr. Meek), which 
provides tax relief to small businesses and administrative relief to 
local jurisdictions by delaying implementation of an onerous tax 
burden.
  Section 511 of the Tax Increase Prevention and Reconciliation Act of 
2005, passed by the then-Republican Congress to raise revenue, requires 
tax withholding of 3 percent on payments to vendors providing property 
or services to the government beginning in January of 2011. The 3 
percent withholding requirement presents a number of administrative and 
practical challenges for businesses, including reducing the cash flow 
they need to meet operating expenses, pay suppliers or subcontractors, 
or meet payroll. They also present several problems for governments, 
including how State and local governments will be able to comply with 
this law, much less how the IRS will be able to afford and administer 
such a requirement.
  H.R. 3056 takes a commonsense approach to this issue and delays the 
implementation of the 3 percent withholding requirement for 1 year. It 
further calls on the Department of the Treasury to study the compliance 
issues confronting businesses and government and report the findings to 
Congress. This measure is supported by State and local governments and 
a broad array of business organizations, including the United States 
Chamber of Commerce, the Financial Services Roundtable, the American 
Bankers Association, the American Farm Bureau Federation, the National 
Association of Manufacturers, the National Federation of Independent 
Business, among others.
  H.R. 3056 also clarifies that U.S. citizens who claim to be bona fide 
residents of the U.S. Virgin Islands receive the same procedural and 
administrative rights afforded to other U.S. taxpayers.
  Finally, Mr. Speaker, H.R. 3056 strictly adheres to the House PAYGO 
rule. This bill is paid for primarily by eliminating a tax loophole 
that currently allows wealthy individuals to avoid paying U.S. taxes 
simply by renouncing their citizenship or terminating their U.S. 
residency. Despite what you may hear today, let me be clear, closing 
this loophole has broad, bipartisan support and has been supported by 
my Republican colleagues.
  I would like to thank Chairman Rangel, Mr. Van Hollen, Mr. Meek, and 
the Ways and Means Committee members for their hard work in bringing 
this legislation to the floor today.
  Mr. Speaker, this commonsense bill protects taxpayers, preserves the 
integrity of our tax system, and makes our tax system fairer for all. 
It deserves strong support of all the Members of this House floor 
today.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1045

  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am not sure that there is anything even left to say 
about the depths to which the House has sunk under the ``broken 
promise'' Democrat majority. Today, once again, the American people are 
being forced to endure the results of yet another evening spent in the 
``broken promise'' Democrat Rules Committee, with nothing to show for 
it except for yet another closed rule, which was referred to today as a 
``traditionally closed rule'' on the floor of the United States House 
of Representatives.
  Mr. Speaker, I rise today in strong opposition to this completely 
closed rule, which denies the minority even with a basic substitute 
amendment in this process, and to the fiscally irresponsible underlying 
legislation.
  I also rise with great regret to report to the American people that, 
once again, as I have been forced to report on multiple occasions over 
the course of this year, the Democrat leadership is bringing 
legislation to the House floor which stacks the deck in favor of big 
labor bosses at someone else's expense. Today, that expense is on the 
American taxpayer, who is being targeted on behalf of big public sector 
union bosses to the tune of $2.2 billion, to be exact.
  I would like to take a few minutes to discuss a number of the myths 
that will be discussed surrounding this legislation and provide my 
colleagues and the American people who are tuning in on C-SPAN with 
some of the facts about the real effect of this special interest 
legislation and what it would mean to the taxpayer.
  In 2004, Congress gave the IRS the ability to utilize the best 
practices and advantages created by the private sector to address its 
growing backlog of unpaid debt. Today, it is estimated that $345 
billion of these unpaid taxes exist. That means that every year the 
average taxpayer who plays by the

[[Page 26949]]

rules must pay an extra $2,700 to cover taxes not being paid by those 
who should legally be paying their taxes.
  This new program, which began as a small pilot program that grows as 
it continues to succeed, is estimated to bring in about $2.2 billion in 
its first 10 years. And under this agreement, the IRS would get the 
first 25 cents of every single new dollar to hire new collections 
professionals, a provision that would have a positive, compound effect 
by helping to bring in even greater amounts of this uncollected revenue 
for the government into the future.
  The program, even in its beginning stages and despite numerous 
attempts by the Democrat majority to kill it before it could succeed, 
has been hugely successful, bringing in over $30 million worth of 
unpaid taxes. It has received a 98 percent rating from the IRS for 
regulatory and procurement accuracy, as well a 100 percent rating for 
professionalism. Additionally, less than 1 percent of the taxpayers 
contacted by these private agencies have filed complaints with the IRS, 
none which have ever been validated.
  Despite this program's track record of success on behalf of taxpayers 
who do play by the rules and pay their designated share, not to mention 
the increased revenue that it brings in to fund the Democrats' other 
new, big-spending legislation, there are many opponents on the other 
side of the aisle that want to prevent it from continuing to work, 
supposedly to protect the dues of the big government union bosses.
  They have claimed, despite the fact that 40 out of the 50 States in 
America already use these same contract services, that this is 
something that only the government can do. You don't have to take my 
word for it that this is untrue. Even the nonpartisan Government 
Accountability Office, the GAO, has found that ``the IRS may benefit 
from using private collectors, and it is reasonable to assume that the 
IRS could learn from their best practices as it works to resolve long-
standing problems with its debt collection activities.''
  Opponents have also incorrectly claimed that private debt collectors 
do not follow the same rules as IRS collectors. Well, this one is 
partially true, because these private collection agencies are subject 
to both Federal and State laws that are collectively more restrictive 
than the laws that Federal employees must follow. Private collectors 
follow the same privacy protections, undergo the same background checks 
and are subject to the same penalties if they violate any of these 
laws.
  Opponents have also claimed that allowing for private debt collection 
would cost untold union jobs, a statement which is also based in an 
alternate reality. The private collection agencies working in this 
program did not and do not replace a single IRS worker.
  As of this past July, over 51,667 ``cold cases'' that the IRS was 
incapable of collecting were given to private agencies, resulting in 
over 5,300 full repayments to the Treasury and almost 2,000 agreements 
to repay these debts incrementally. This means that the government 
received over $24 million of gross revenue that it would not have 
received otherwise, of which only about one in eight went to pay for 
these otherwise nonexistent services. In fact, the IRS has publicly 
stated that no government employee will lose his or her job as a result 
of this highly effective private contracting. Instead, they will 
benefit from the opportunity to focus their talent, expertise and 
resources on high priority, more complex cases.
  Mr. Speaker, I encourage all of my colleagues to understand all of 
the facts regarding this legislation before they are influenced by the 
scare tactics of a few Members who are determined to kill this highly-
effective program that has already proven to be cost-effective in 
closing the ``tax gap'' of unpaid, hard-to collect taxes.
  I wish I could say they would have plenty of time to learn all the 
facts surrounding this legislation that is being rushed to the floor 
today under a completely closed process. Unfortunately, last night in 
the ``Graveyard of Good Ideas in the House of Representatives,'' the 
majority Rules Committee Democrats voted 3 times along party lines to 
prevent any amendment authored by a Republican from being considered 
today. Despite numerous campaign promises by the highest ranking 
Democrats in the House to run the most ``transparent, open and honest'' 
House in history, this Democrat majority once again has provided the 
House with something which is a rule that is none of the above, which 
is the historical tradition. Instead, we have what is referred to as a 
closed rule. I wish I could say I am surprised by the Democrat 
leadership allowing politics to triumph over policy or fair procedure. 
Unfortunately, this is precisely what we have come to expect from the 
new ``broken promise'' Democrat majority.
  Mr. Speaker, I oppose this ill-conceived and costly legislation, and 
I encourage all my colleagues on both sides of the aisle to stand up 
for taxpayers by voting against this rule and the underlying 
legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as we said in our opening statement, tax bills are 
traditionally closed due to their complexity. Under Democrats, before 
1994, they were closed. Under Mr. Dreier's administration in the House 
Rules Committee under the Republican leadership, they were 
traditionally closed. Now we continue to maintain that practice. 
Because tax laws are so complex, late amendments that have not been 
fully vetted and analyzed are simply too complex to insert into the Tax 
Code without knowing their full ramifications.
  Secondly, Mr. Speaker, Mr. Sessions, my colleague from Texas, 
mentioned that the McCrery substitute was not made in order. He is 
correct about that. It was not made in order because it violates the 
PAYGO provisions of our House rules. I have a copy of it right here. It 
simply does not meet the PAYGO statutory requirements of the House 
rules.
  Finally, the Republican privatization bill that had passed in a prior 
Congress, when it was implemented it spent $71 million to collect $20 
million. That is a loss of $50 million. Even with the creative 
accounting of the Republican ``voodoo math,'' I cannot believe that 
they are advocating continuation of this program that has lost money.
  Further, the use of private contractors to collect Federal taxes 
violates a confidential and fundamental relationship between American 
taxpayers and the Federal Government. IRS employees have access to a 
taxpayer's complete tax history, including personal information that is 
ready identifiable. That should be restricted only to IRS employees. By 
prohibiting the IRS from hiring private debt collectors, this bill will 
ensure that the privacy rights of Americans and other confidential 
information of taxpayers is protected from bounty hunters working on 
commissions of up to 25 percent.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we continue to hear arguments from my good friends about 
how this just won't work. But for 10 years it has worked very well, 
with a 99 percent accuracy, in providing billions of dollars to the 
taxpayer.
  The bottom line is that Treasury simply focuses their activities on 
major accounts, and the others on smaller accounts, which is who have 
been handling these accounts and been very good at it, which is what we 
are asking to continue today. What is happening is that we found out 
the unions simply don't like that. They don't like somebody else 
perhaps getting something that they in fact never wanted to work on 
themselves.
  So we are trying to say to the American people today, don't take away 
this stream of revenue. Don't take away this opportunity. Because the 
private sector is working on these accounts. They are not given any 
advantage. The people who really end up winning is not only the 
Treasury Department, but, more specifically, the taxpayer.

[[Page 26950]]

  Mr. Speaker, I yield such time as he may consume to the gentleman 
from San Dimas, California (Mr. Dreier), the ranking member of the 
Rules Committee.
  Mr. DREIER. Mr. Speaker, I thank my friend from Dallas for yielding, 
and I want to buttress his argument, which is a very clear one. 
Obviously, we want to ensure that every American pays their fair share 
of taxes.
  We have had a dramatic increase in collection success by virtue of 
this program, and here we are gutting it because a very small group of 
people seems to oppose it. It happens to be union opposition.
  As a taxpayer, I pay my fair share of taxes. I want to make sure that 
every other American pays their fair share of taxes, and that is 
exactly what this 10-year-old program has done, and has done with 
success.
  Mr. Speaker, I really am very, very puzzled as we begin today with 
the debate on two rules that will lead to legislation being considered 
here on the House floor. The reason I am perplexed is we are dealing 
with two very important issues.
  The majority leadership clearly has its right and its responsibility 
to move their agenda. They want to do what they are planning to do now 
on this issue of private sector collection of taxes, and they want to 
dramatically expand housing programs. Those are the two things that the 
majority is planning to move to the floor today. But I just don't 
understand, Mr. Speaker. I just don't understand why it is that we are 
doing what we are doing.
  My friend from California, Mr. Cardoza, just described how the Rules 
Committee was run when I had the privilege of serving as chairman of 
the committee. He said we have what is a customary closed rule, I think 
is the term that he used. Is that the term? I would be happy to yield 
to my friend.
  Mr. CARDOZA. I called it traditional.
  Mr. DREIER. I thank my friend for clarifying that. He described it as 
a traditional closed rule.
  I will say that it is true that on tax bills both parties recognize 
that the notion of completely opening up a Tax Code measure in the Ways 
and Means Committee is not the wisest thing to do, so neither party has 
done that.
  But I will tell you this, Mr. Speaker: We, when we were in the 
majority, regularly ensured that the ranking minority member, Mr. 
Rangel, had a substitute that he could offer. In fact, on numerous 
occasions we offered Mr. Rangel the chance to propose a sight-unseen 
substitute to measures that were coming forward, and I will admit, I 
will admit that on occasion, but a very rare occasion, we did not 
provide that substitute to Mr. Rangel.
  Mr. Speaker, I will say when that happened, Mr. Rangel clearly let us 
know how unhappy he was that he did not have a substitute.
  We all know that at the beginning of this Congress we had this 
document put forward by the new majority called ``a New Direction for 
America.'' In this document, the item titled ``Regular Order For 
Legislation'' under ``A Congress Working For All Americans,'' paragraph 
2 reads as follows, Mr. Speaker. It says, ``Bills should generally come 
to the floor under a procedure that allows open, full and fair debate, 
consisting of a full amendment process that grants the minority the 
rights to offer its alternatives, including a substitute.'' This is the 
commitment that was made to the American people under ``A New Direction 
for America.''
  Mr. Speaker, I recognize that having a completely open rule on a 
measure that emerges from the Ways and Means Committee is not the 
wisest thing for us to do. But, Mr. Speaker, what we are doing here 
today on this rule is absolutely outrageous and a complete violation of 
this commitment that was made at the beginning of this Congress for a 
new era of openness, transparency and accountability.

                              {time}  1100

  Mr. Speaker, in fact, as I said last night in the Rules Committee, we 
have now almost completed the first session of the 110th Congress. Our 
target adjournment date is October 26, just a couple of weeks away. On 
not one occasion in this entire session of Congress has the 
distinguished ranking minority member of the Ways and Means Committee, 
the gentleman from Louisiana (Mr. McCrery), been offered the chance to 
propose a substitute to any measure that has emerged from the Ways and 
Means Committee.
  I will say, Mr. Speaker, as we regularly get criticized for when we 
were in the majority, we never did anything close to that.
  Now, I am saddened greatly by the fact that we are not only doing 
this on this rule, Mr. Speaker, but on the next measure that we are 
about to bring up. It is going to be another item that will have come 
from the Committee on Financial Services. It's a plan to dramatically 
increase housing.
  Last week we had a measure that came from the Committee on Financial 
Services and it was a flood insurance bill. Not a terribly partisan 
issue, a measure that has impacted Democrats and Republicans on the 
gulf coast, Florida, along the eastern seaboard and other parts of our 
country. Democrats and Republicans.
  As we all know, last week in the measure that emerged from the 
Committee on Financial Services, the Rules Committee had a wide range 
of amendments that were proposed by both Democrats and Republicans. In 
fact, the chairman of the Committee on Financial Services talked about 
a commitment that had been made to allow a number of Republican 
amendments to be considered, so those Members withdrew their amendments 
when they were debating this in the Committee on Financial Services on 
flood insurance.
  The day before the committee reported that out, we happened to have 
unveiled, as Members of the minority, our report providing an 
assessment of basically the first 9 months of the Pelosi Speakership 
and the way the Speaker's Rules Committee has been run. This report, 
very brief, lots of graphs in it, 10 pages long, I would commend it to 
my colleagues. They can get a copy by going to rules-
Republicans.house.gov. I would recommend that they look at this, Mr. 
Speaker, and the reason is, if you compare this performance, whether it 
is denying Members a chance to even submit amendments to the Rules 
Committee, which is something we would have never comprehended, to 
having double the number of closed rules as we did at this point in the 
109th Congress, you will see, Mr. Speaker, that this report shows that 
the performance of the first session of the 110th Congress has been 180 
degrees from what was promised the American people.
  So last week when we had this flood insurance measure that came 
forward, as I said, an agreement had been struck between the chairman 
of the Committee on Financial Services and a number of Republicans on 
that committee to have their amendments considered. And what happened? 
There were 13 amendments made in order, Mr. Speaker. Not one single 
Republican amendment was made in order. Not one single Republican 
amendment was made in order. This is not just a party thing; this is 
the American people who are not allowed to be heard because these 
representatives represent people along the eastern seaboard, the gulf 
coast, Florida, areas impacted by floods and hurricanes. We have 
flooding in California and all across the country.
  Here is what happened. The American people whose representatives had 
thoughtful proposals, and the chairman of the committee thought those 
proposals should be heard, were denied by this Rules Committee, and it 
just happened the day after this report which we hoped would lead the 
new majority to help keep the promises made in a new direction for 
America. And what happened? They did even worse.
  And so where do we stand today, Mr. Speaker. Well, Mr. Sessions has 
just pointed out what has happened in this rule. Again, not one chance 
in this entire Congress for the ranking minority member of the Ways and 
Means Committee to offer a proposal.
  And in the next bill we will have before us, unfortunately, there is 
not a

[[Page 26951]]

single Republican amendment made in order. Yes, there is a substitute, 
the Neugebauer substitute; but not 1 Republican amendment made in 
order, and all seven of the amendments that the Democrats proposed have 
been made in order.
  Now, I had an exchange with the chairman of the Committee on 
Financial Services, and while he did not support most or any of these 
amendments that I know of, unfortunately what happened was, when the 
committee chairman said we ought to consider some of these, the 
committee chose to completely shut out Members of the minority from 
having an opportunity other than the Neugebauer substitute.
  Mr. Speaker, let me say I am puzzled and I am saddened, both, as I 
look at this performance. When we are promised a new direction for 
America and greater transparency, disclosure and accountability, and 
generally a full and open debate, including a substitute, which is the 
exact wording that Speaker Pelosi had in this new direction for 
America, and here we are doing the exact opposite.
  Now, on this measure itself, I hope very much we will defeat the 
previous question so the very thoughtful work Mr. English has done 
dealing with relief for the American people from the onerous burden of 
the alternative minimum tax can be addressed. Unfortunately, that is 
not allowed. But I do believe if we defeat the previous question, we 
can allow the American people to have a chance to have some kind of 
relief from the onerous alternative minimum tax.
  Mr. Speaker, I thank my friend for yielding me so much time, but I 
felt compelled to make these arguments on this bill and the next bill 
that will be coming forward. I hope, and I am very sincere about this, 
as an institutionalist, I hope and pray that we will do better for the 
American people when it comes to structuring and allowing full and fair 
and free debate on the House floor.
  Mr. CARDOZA. Mr. Speaker, my colleague from California is a very 
skilled orator, and I appreciate his speaking ability. I will tell you, 
however, one of the great tools that people use when they are as 
talented as Mr. Dreier is, when they don't want to talk about the bill 
at hand, they talk about everything else around it.
  The reality is that the bill at hand, the rule that we are trying to 
move forward to bring a bill to the House floor today, eliminates 
privatization of tax collection.
  Now, my Republican colleagues on the other side of the aisle love 
privatization. They love it in Iraq where it has not worked and our 
military is struggling under the burden of having privatization and 
contractors, war contractors not doing what they should be doing and 
charging four times what they should be charging to do it. We see all 
of the problems that have happened there.
  We have seen the same thing happen here in the United States where 
Federal contracts have been let. Mr. Waxman's committee has done 
incredible work rooting out waste, fraud and abuse in the private 
contractor system.
  And then they want to turn over the collection system of the IRS to 
private hands, putting at risk all Americans' private information and 
documents. They like privatization; they just don't like protecting 
your privacy.
  The gentleman from California talked about all kinds of issues but he 
didn't talk about the root problem that we are trying to address here, 
and that is stopping bounty hunters from harassing American taxpayers.
  Finally, Mr. Dreier talked at great length about the McCrery 
substitute and the fact that Mr. McCrery has not gotten a substitute 
this year.
  Mr. Speaker, this is the second time this year that I have managed a 
rule where the Republican substitute has violated the House rules. I am 
a member of the Blue Dog Coalition as well as being a member of the 
Rules Committee. I am very proud that for the whole time I have been 
here as a member of the Blue Dog Coalition, we advocated for 
advancement of the PAYGO rule. We believe in fiscal responsibility. We 
believe we need to pay our debts. So we got, when we took over the 
majority, inserted into the House rules a clause that says we have to 
pay as we go. We have to do it like every American taxpayer has to run 
their own home. We have to run this House in a fiscally responsible 
way. And so we mandated the PAYGO rules.
  The substitute put forward by the Republicans, for the second time 
that I have managed a rule anyway, has violated those PAYGO rules. When 
you don't follow the House rules, you can't expect your amendment to be 
made in order, Mr. Speaker. I encourage my colleagues to abide by those 
rules and honor the process.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I don't know if this is a blatant attempt 
to mislead Members or not, but the gentleman, Mr. English, his bill is 
compliant with PAYGO rules. And to suggest on this floor that the 
Republican Party presented the bill, the amendment----
  Mr. CARDOZA. Mr. Speaker, will the gentleman yield?
  Mr. SESSIONS. I yield to the gentleman from California.
  Mr. CARDOZA. I wasn't referring to Mr. English's bill.
  Mr. SESSIONS. Which one were you referencing, sir?
  Mr. CARDOZA. I was referring to Mr. McCrery's substitute.
  Mr. SESSIONS. Reclaiming my time, and I will continue this dialogue, 
you know that we asked to have made in order one that would be in 
compliance with the PAYGO rules, and you and your colleagues turned 
that down. You specifically stated: We want an amendment that would be 
in compliance with the PAYGO rules; will you please give it to us. And 
we were turned down by the Rules Committee. I would engage the 
gentleman on that issue.
  It was my amendment that I made, and I know how the gentleman voted, 
along with all of his colleagues. And to stand up on this floor and to 
say, Well, we would if they would abide by the rules, but they have to 
abide by the rules, is a blatant, blatant miscalculation and I think 
untrue and insincere. When we asked for that in the Rules Committee, we 
were turned down.
  When we said, Give us an amendment we will make sure that the 
Parliamentarian and others say is compliant, we were turned down.
  The gentleman, Mr. English, and I am getting ready to allow him to 
speak on this floor, he is in compliance with PAYGO rules. So there was 
not an opportunity that was given by the Rules Committee to allow us to 
do that. And then you stand up and say, Well, if Republicans played by 
the same rules as we do, then they would find them in order, that is 
not true.
  Mr. Speaker, at this time I yield 4 minutes to the co-chairman of the 
Zero AMT Caucus, the distinguished gentleman who has an amendment that 
would be compliant, the gentleman from Pennsylvania (Mr. English).
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for 
yielding to me and certifying in the process that I am PAYGO compliant, 
something that will come as a source of great relief to my wife, among 
others.
  Mr. Speaker, I rise in strong opposition to the rule before us today. 
Very simply, it puts protecting deadbeat taxpayers ahead of shielding 
unsuspecting citizens from additional taxes and penalties resulting 
from the majority's inaction on the AMT.
  Yesterday, I offered an amendment in the nature of a substitute to 
the underlying bill. My amendment would have addressed the severe 
consequences to middle-class taxpayers come next April as a result of 
the majority's inaction on the alternative minimum tax. As has been 
noted here, this amendment was fully compliant with PAYGO rules of the 
House, but it was dismissed out of hand by the majority. As a result, I 
am here today to strongly urge my colleagues to defeat the previous 
question on the rule so it can be amended to incorporate consideration 
of the English substitute.
  The fact remains that the clock is ticking, and without a minimum 
amount of effort by this majority in Congress, millions of taxpayers 
will not only be socked with an unsuspected

[[Page 26952]]

bill from the tax man in the form of the AMT, they will also be slapped 
with punitive penalties by the IRS for not withholding enough as AMT 
taxpayers.
  My amendment would have created a safe harbor for those taxpayers and 
not penalized them for something that they did not know they would be 
subjected to; and, frankly, something they never should have been 
subject to in the first place.

                              {time}  1115

  Let's put this in more concrete terms, Mr. Speaker. There are now 
less than 30 legislative days left in this Congress. So far a bill has 
yet to be introduced by the majority to spare 23 million American 
taxpayers from unintentionally being subject to the alternative minimum 
tax.
  Now, after having 10 months of the year to deal with this impending 
explosion of increased taxes on working families, the majority has done 
absolutely nothing.
  This is the longest period of time the AMT has been pushed aside, and 
it is incomprehensible that we're not addressing the fallout from this 
inaction today, even as forms are being prepared to send out to 
taxpayers.
  Working families should not have to pay the price for the majority's 
inaction on the AMT. In fact, Mr. Speaker, they can't afford to.
  I oppose this rule because it embraces the misplaced priorities of 
the majority to chase phantasms rather than deliver real and meaningful 
legislation to spare working families from a huge tax increase that was 
never intended for them.
  My substitute would strike the repeal of the private debt collection 
program and put in place a safe harbor for unsuspecting taxpayers about 
to be clobbered by the AMT and then again by penalties. Otherwise, my 
substitute would leave the bill unchanged.
  Mr. Speaker, we have to come to grips with the fact that we have to 
address the AMT. We must do it now. I urge my colleagues to defeat the 
previous question and bring a rule to the floor that addresses the 
immediate and pressing needs of working families in this country.
  Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume.
  I wish to commend my colleague Mr. English. He is a very thoughtful 
individual and a very good legislator, and I would just say that while 
his amendment was PAYGO compliant, we were not aware of that until this 
morning when the tax tables were submitted to the Ways and Means 
Committee. So last night when the Rules Committee was dealing with this 
issue, we had no way of knowing whether his substitute was, in fact, 
PAYGO compliant or not.
  With regard to Mr. McCrery's substitute, I have it here with me. The 
substitute that was submitted by Mr. McCrery was, in fact, not PAYGO 
compliant. Now, Mr. Sessions says that he made the motion to allow it 
to be PAYGO compliant, but the bill before us at that point in the 
Rules Committee was not.
  I would like to say, also, that Mr. English's substitute doesn't deal 
with the base bill, which is to stop the privatization of tax 
collection, and that is what the majority is trying to get at today.
  Now, certainly there are other issues that are worthy of 
consideration in this institution. AMT is certainly one of them. But in 
this provision today, the majority wants to bring forward a bill that 
would stop American taxpayers from being harassed by private bounty 
hunters. That's the issue before us today. And all the other issues 
that people are trying to discuss one way or another, they have nothing 
to do with this base bill and really don't apply to the debate we want 
to have in the next hour.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. I would like to inquire upon the time remaining on both 
sides, Mr. Speaker.
  The SPEAKER pro tempore. The gentleman from Texas has 4 minutes, and 
the gentleman from California has 15 minutes.
  Mr. SESSIONS. Mr. Speaker, let's go to the heart of this.
  $30 million worth of uncollected taxes that, by the IRS's own 
admission, never would have been collected because they were accounts 
they did not want to or were not working, which are the only accounts 
that ever go to private debt collectors, who as private collectors 
receive a 98 percent rating from the IRS for regulatory procedural 
accuracy, as well as a 100 percent rating for professionalism, and less 
than 1 percent of those accounts have any sort of complaints that are 
filed with the IRS, and none which have been validated. That's the 
substance of the case. That's why we oppose this bill and this rule. It 
makes no sense unless you're simply trying to do what union bosses ask 
you to do, which is evidently what this bill is doing.
  I would also like to point out that what's very interesting is that 
this bill is supported by the chairman of the Ways and Means Committee 
and has a whopping nine cosponsors, a whopping nine cosponsors, and 
we're bringing that to the floor of the House today. Utterly amazing.
  Mr. Speaker, I insert into the Record at this time the Statement of 
Administration Policy by the President, which this White House says 
that they will veto.

                   Statement of Administration Policy

  H.R. 3056--To amend the Internal Revenue Code of 1986 to repeal the 
     authority of the Internal Revenue Service to use private debt 
 collection companies, to delay implementation of withholding taxes on 
 government contractors, to revise the tax rules on expatriation, and 
                           for other purposes

       The Administration strongly opposes House passage of H.R. 
     3056. The bill is not consistent with the Administration's 
     commitment to a balanced approach toward improving taxpayer 
     compliance and collecting outstanding tax liabilities. If 
     H.R. 3056 were presented to the President, his senior 
     advisors would recommend that he veto the bill.
       The Administration strongly opposes the provisions of the 
     bill that would repeal the current statutory authorization 
     for the Internal Revenue Service, IRS, private debt 
     collection program. Terminating this program would result in 
     a loss of significant revenue over the next 10 years. These 
     are tax dollars that are legally owed to the Government and 
     that are otherwise not likely to be collected by the IRS. It 
     is a disservice to all taxpayers who properly pay their taxes 
     to terminate this program that is efficiently recovering a 
     portion of the extra burden they shoulder from the ``tax 
     gap'' caused by those who do not pay their taxes. Moreover, 
     the Government Accountability Office, GAO, recently reported 
     that the IRS has made ``major progress'' in addressing 
     critical success factors for the private debt collection 
     program, including ensuring that both taxpayer rights and the 
     security of taxpayer information are protected.
       The Administration also has concerns with the provision of 
     the bill that would impose additional tax rules on 
     individuals relinquishing U.S. citizenship or terminating 
     long-term residency. The Administration strongly supports 
     efforts to ensure that individuals renouncing their U.S. 
     citizenship pay their fair share of U.S. taxes. The bill's 
     ``mark-to-market'' approach to valuation of expatriates' 
     property for taxation purposes, however, overrides existing 
     tax treaties and raises concerns about tax complexity.

  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDOZA. I would like to inquire from my colleague if he has any 
remaining speakers.
  Mr. SESSIONS. I thank the gentleman for asking. In fact, I do not 
have additional speakers at this time.
  Mr. CARDOZA. Would the gentleman like to close?
  Mr. SESSIONS. I would be very pleased to do that. I would like to ask 
the question back, does the gentleman have any additional speakers?
  Mr. CARDOZA. I do not.
  Mr. SESSIONS. Mr. Speaker, we have had a good debate here on the 
floor. We talked about from the Republican perspective, we're trying to 
follow the rules, not only of the House, but also the statements that 
have been made by our new Speaker, the Honorable Nancy Pelosi, who said 
she would have the most honest, open and ethical House in history and 
that that would also extend to processes of amendments.
  We are here on the floor of the House saying today, that's not 
happening, has not happened all year, and I would predict to say today 
probably is not about

[[Page 26953]]

to happen. Still on the Web site for the Speaker it says this. The 
American people are waiting for this promise to be made.
  Today, we are debating a rule and a bill that would say to the 
American taxpayer that the IRS and their ability to collect taxes on 
behalf of the American people is going to be changed, changed from 
accounts that the IRS has no reasonable reason to believe that they 
will be chasing after or trying to collect. And that's why in the first 
place we said from doing audits, you've got all these accounts, please 
pass them to someone who will do it on behalf of the taxpayer. Because 
if you're not trying to collect these bills, it means that people will 
never pay.
  The result has been over $30 million worth of uncollected taxes that 
never would have been collected, not by the IRS, and they're done by 
someone, these private collection agencies, that receive a 98 percent 
rating by the IRS for regulatory and procedural accuracy, as well as a 
100 percent rating for professionalism and less than a 1 percent 
complaint rate of which not one has turned out to be validated.
  Mr. Speaker, this is an assault on not just the taxpayer. This is an 
assault on really good and effective and proper government, where the 
IRS utilizes best practice. They're utilized by over 40 State 
governments today to have help in collecting money that is owed not 
just to the government but to the taxpayers of this Nation. And today, 
despite the success, overwhelming success, that is occurring, the 
Democrat majority, with nine cosponsors plus the chairman, is 
interested in taking away this opportunity for the taxpayers, I will 
assume, because the taxpayer union of the Treasury Department does not 
like this happening.
  Mr. Speaker, we need to have best practices. The President is right. 
He will veto this bill. This is a valiant effort by this Democrat 
majority to pay back AFL-CIO and the labor unions for their support, 
but it is not in the best interests of not only the taxpayer but of 
good and proper government.
  The Republican Party is here on the floor of the House today saying 
that what has happened with best practices that is happening today 
should continue. We should have these private services that work in 
concert with the IRS. We should continue to give the IRS and those 
particular departments that do go after this money to receive directly 
more money that is collected that would help them hire more tax 
collectors, but we should not stop this process dead in its tracks 
because not only is it successful, but it is working as a best practice 
would for other people to see how important a public/private 
partnership is.
  Mr. Speaker, I ask unanimous consent to have the text of the 
amendment and extraneous material to appear in the Record just prior to 
the vote on the previous question.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time.
  Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume 
to close.
  Mr. Speaker, the bill before us today, the Tax Collection 
Responsibility Act of 2007, stops wasting taxpayer money on programs 
that cost too much, gives away confidential taxpayer information, and 
results in taxpayer harassment by bounty hunters and simply never has 
and never will work. It didn't work in the early 1800s, it didn't work 
in the late 1800s, and it doesn't work in the year 2007.
  Mr. Sessions mentioned that there are these Republican best practices 
that would enhance our collection methods. Well, let's talk about that.
  The Republican bill spent $71 million to collect $20 million, 
resulting in a $51 million loss. If Mr. Sessions wants to claim those 
as Republican best practices, he can do that. However, if the Federal 
Government employees, the traditional men and women who have served our 
country honorably, if they had had the ability to use that same $71 
million, they would have collected $1.5 billion in taxes owed to this 
Treasury, $1.5 billion that could be used to, well, maybe fund SCHIP so 
that our poor young children could get the health care they deserve.
  Mr. Sessions talks about that this bill only has 11 cosponsors. Well, 
this bill is a compilation of bills that was put together in the last 
few weeks, and, in fact, the base bills that this bill is based upon, 
Mr. Van Hollen's bill has 156 coauthors and Mr. Meek of Florida's bill 
has over 100. So there is wide support for this bill. The public should 
not believe that there are just a few folks thinking this is a good 
idea. This has wide support. It has had a number of hearings in the 
Ways and Means Committee, and there has been great testimony with 
regard to the fact that the current program put in by the Republicans 
in the last few years has not and will not work and should not continue 
to be allowed as the law of the land.
  H.R. 3056 does something very fundamental. It protects taxpayers and 
ensures their privacy. It addresses withholding concerns raised by 
business and local government. It cracks down on yet another tax 
loophole for the wealthy that has been left open under the prior 
Congresses for far too long, and, most importantly, it continues to 
make our taxes fair for all.
  Mr. Speaker, this is a good bill. It deserves this House's strong 
support. I urge a ``yes'' vote on the rule and on the previous 
question.
  Mr. HERGER Mr. Speaker, I rise in opposition to the Rule on H.R. 
3056, the Tax Collection Responsibility Act. This rule, on legislation 
to halt collection of previously uncollected tax debts, wrongly 
prohibits any Republican amendments. An Amendment in the Nature of a 
Substitute by Ways and Means Ranking Member Jim McCrery, would have 
allowed for consideration of full repeal of the 3 percent withholding 
burden, which is so important to thousands of U.S. businesses. This was 
rejected by the Rules Committee on Tuesday evening. This rule stifles 
debate and is counter-productive to the bipartisanship we've worked for 
this year on the 3 percent withholding repeal. I urge my colleagues to 
reject the rule.
  Mr. WELCH of Vermont. Mr. Speaker, I want to thank the gentleman from 
New York, Mr. Rangel, for his work in bringing H.R. 3056 to the House 
floor. I have received feedback from Vermont citizens and members of 
the National Treasury Employees Union (NTEU), both in Vermont and 
nationwide, strongly urging the repeal of the IRS authority to use 
private debt collectors. There has been much concern for this practice 
of using ``private bounty hunters.'' National NTEU employees expressed 
deep concern for outsourcing of inherently governmental jobs.
  In January, 2007, the National Taxpayer Advocate, who is appointed by 
the Treasury Secretary, sent a strong message to Congress urging repeal 
of this authority as a burden and cost to taxpayers. Taxpayers have 
faced overzealous intimidation and abuse by private collectors as well 
as the loss of privacy and confidential information. The Taxpayer 
Advocate reported to Congress that ``the money spent on the IRS Private 
Debt Collection initiative is an inefficient use of government 
dollars.'' The National Taxpayer Advocate Service has testified that 
IRS employees bring in $20 for every dollar IRS spends, whereas private 
debt collectors bring in only 4.
  This bill will reverse these inefficiencies and abuses on the 
American taxpayer.
  I have also heard from other Vermont organizations, including many 
Builders Associations and other federal, state, and local government 
contractors, voicing strong support for the delay in implementation of 
certain tax withholding provisions provided in this bill. H.R. 3056 
postpones for one year, until December 31, 2011, the application of a 
three-percent withholding requirement on the payments of goods and 
services made by the U.S. Government, States, and local governments. 
This delay allows the Treasury Secretary the time to study issues 
associated with the 3-percent withholding, including the burdens to 
small businesses as well as the application of the tax to small 
expenditures for goods and services by governments.
  I strongly urge my colleagues to support passage of this rule and the 
underlying bill.
  The material previously referred to by Mr. Sessions is as follows:

       Amendment to H. Res. 719 Offered by Mr. Sessions of Texas

       Strike all after the resolved clause and insert the 
     following: That upon the adoption of this resolution it shall 
     be in order to consider in the House the bill (H.R. 3056) to 
     amend the Internal Revenue Code of 1986 to

[[Page 26954]]

     repeal the authority of the Internal Revenue Service to use 
     private debt collection companies, to delay implementation of 
     withholding taxes on government contractors, to revise the 
     tax rules on expatriation, and for other purposes. All points 
     of order against consideration of the bill are waived except 
     those arising under clause 9 or 10 of rule XXI. The amendment 
     in the nature of a substitute recommended by the Committee on 
     Ways and Means now printed in the bill, modified by the 
     amendment printed in the report of the Committee on Rules 
     accompanying this resolution, shall be considered as adopted. 
     The bill, as amended, shall be considered as read. All points 
     of order against provisions of the bill, as amended, are 
     waived. The previous question shall be considered as ordered 
     on the bill, as amended, to final passage without intervening 
     motion except: (1) one hour of debate equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on Ways and Means; (2) the further amendment 
     printed in section 3 of this resolution, if offered by 
     Representative English of Pennsylvania or his designee, which 
     shall be in order without intervention of any point of order 
     except those arising under clause 10 of rule XXI, shall be 
     considered as read, and shall be separately debatable for one 
     hour equally divided and controlled by the proponent and an 
     opponent; and (3) one motion to recommit with or without 
     instructions.
       Sec. 2. During consideration of H.R. 3056 pursuant to this 
     resolution; notwithstanding the operation of the previous 
     question, the Chair may postpone further consideration of the 
     bill to such time as may be designated by the Speaker.
       Sec. 3. The further amendment referred to in section 1 of 
     this resolution, to be offered by Representative English of 
     Pennsylvania or his designee, is as follows:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Collection Responsibility Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act 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 Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Estimated tax safe harbor for increase in 2007 alternative 
              minimum tax liability.
Sec. 3. Delay of application of withholding requirement on certain 
              governmental payments for goods and services.
Sec. 4. Clarification of entitlement of Virgin Islands residents to 
              protections of limitations on assessment and collection 
              of tax.
Sec. 5. Revision of tax rules on expatriation.
Sec. 6. Repeal of suspension of certain penalties and interest.
Sec. 7. Increase in information return penalties.
Sec. 8. Time for payment of corporate estimated taxes.

     SEC. 2. ESTIMATED TAX SAFE HARBOR FOR INCREASE IN 2007 
                   ALTERNATIVE MINIMUM TAX LIABILITY.

       (a) In General.--Section 6654 is amended by redesignating 
     subsection (m) as subsection (n) and by inserting after 
     subsection (l) the following new subsection:
       ``(m) 2007 AMT Liability Increase.--
       ``(1) In general.--In the case of any taxable year 
     beginning in 2007--
       ``(A) any required payment under subsection (d)(1),
       ``(B) any annualized income installment under subsection 
     (d)(2), and
       ``(C) any tax under subsection (e)(1),
     shall be determined without regard to any 2007 AMT liability 
     increase.
       ``(2) 2007 amt liability increase.--For purposes of 
     paragraph (1), the term `2007 AMT liability increase' means 
     the excess (if any) of--
       ``(A) the tax imposed by section 55 for the first taxable 
     year beginning in 2007, over
       ``(B) the tax imposed by section 55 for the first taxable 
     year beginning in 2006.
       ``(3) Limitation.--Under guidance prescribed by the 
     Secretary, the excess determined under paragraph (2) shall be 
     reduced (but not below zero) by an amount determined by the 
     Secretary to result, when added to all other revenue amounts 
     forgone by reason of paragraph (1), in the total amount 
     forgone under paragraph (1) being equal to $1,000,000,000.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 3. DELAY OF APPLICATION OF WITHHOLDING REQUIREMENT ON 
                   CERTAIN GOVERNMENTAL PAYMENTS FOR GOODS AND 
                   SERVICES.

       (a) In General.--Subsection (b) of section 511 of the Tax 
     Increase Prevention and Reconciliation Act of 2005 is amended 
     by striking ``December 31, 2010'' and inserting ``December 
     31, 2011''.
       (b) Report to Congress.--Not later than 6 months after the 
     date of the enactment of this Act, the Secretary of the 
     Treasury shall submit to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate a report with respect to the withholding 
     requirements of section 3402(t) of the Internal Revenue Code 
     of 1986, including a detailed analysis of--
       (1) the problems, if any, which are anticipated in 
     administering and complying with such requirements,
       (2) the burdens, if any, that such requirements will place 
     on governments and businesses (taking into account such 
     mechanisms as may be necessary to administer such 
     requirements), and
       (3) the application of such requirements to small 
     expenditures for services and goods by governments.

     SEC. 4. CLARIFICATION OF ENTITLEMENT OF VIRGIN ISLANDS 
                   RESIDENTS TO PROTECTIONS OF LIMITATIONS ON 
                   ASSESSMENT AND COLLECTION OF TAX.

       (a) In General.--Subsection (c) of section 932 (relating to 
     treatment of Virgin Islands residents) is amended by adding 
     at the end the following new paragraph:
       ``(5) Treatment of income tax return filed with virgin 
     islands.--An income tax return filed with the Virgin Islands 
     by an individual claiming to be described in paragraph (1) 
     for the taxable year shall be treated for purposes of 
     subtitle F in the same manner as if such return were an 
     income tax return filed with the United States for such 
     taxable year. The preceding sentence shall not apply where 
     such return is false or fraudulent with the intent to avoid 
     tax or otherwise is a willful attempt in any manner to defeat 
     or evade tax.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after 1986.

     SEC. 5. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--All property of a covered expatriate 
     shall be treated as sold on the day before the expatriation 
     date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence, determined without 
     regard to paragraph (3).
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be includible in the gross income of any 
     individual by reason of paragraph (1) shall be reduced (but 
     not below zero) by $600,000.
       ``(B) Adjustment for inflation.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2008, the dollar amount in 
     subparagraph (A) shall 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, by substituting `calendar year 2007' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the nearest multiple of $1,000.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the time for payment of the 
     additional tax attributable to such property shall be 
     extended until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of extension.--The due date for payment 
     of tax may not be extended under this subsection later than 
     the due date for the return of tax imposed by this chapter 
     for the taxable year which includes the date

[[Page 26955]]

     of death of the expatriate (or, if earlier, the time that the 
     security provided with respect to the property fails to meet 
     the requirements of paragraph (4), unless the taxpayer 
     corrects such failure within the time specified by the 
     Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond which is furnished to, and accepted by, 
     the Secretary, which is conditioned on the payment of tax 
     (and interest thereon), and which meets the requirements of 
     section 6325, or
       ``(ii) it is another form of security for such payment 
     (including letters of credit) that meets such requirements as 
     the Secretary may prescribe.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer makes an irrevocable 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable.
       ``(7) Interest.--For purposes of section 6601, the last 
     date for the payment of tax shall be determined without 
     regard to the election under this subsection.
       ``(c) Exception for Certain Property.--Subsection (a) shall 
     not apply to--
       ``(1) any deferred compensation item (as defined in 
     subsection (d)(4)),
       ``(2) any specified tax deferred account (as defined in 
     subsection (e)(2)), and
       ``(3) any interest in a nongrantor trust (as defined in 
     subsection (f)(3)).
       ``(d) Treatment of Deferred Compensation Items.--
       ``(1) Withholding on eligible deferred compensation 
     items.--
       ``(A) In general.--In the case of any eligible deferred 
     compensation item, the payor shall deduct and withhold from 
     any taxable payment to a covered expatriate with respect to 
     such item a tax equal to 30 percent thereof.
       ``(B) Taxable payment.--For purposes of subparagraph (A), 
     the term `taxable payment' means with respect to a covered 
     expatriate any payment to the extent it would be includible 
     in the gross income of the covered expatriate if such 
     expatriate continued to be subject to tax as a citizen or 
     resident of the United States. A deferred compensation item 
     shall be taken into account as a payment under the preceding 
     sentence when such item would be so includible.
       ``(2) Other deferred compensation items.--In the case of 
     any deferred compensation item which is not an eligible 
     deferred compensation item--
       ``(A)(i) with respect to any deferred compensation item to 
     which clause (ii) does not apply, an amount equal to the 
     present value of the covered expatriate's accrued benefit 
     shall be treated as having been received by such individual 
     on the day before the expatriation date as a distribution 
     under the plan, and
       ``(ii) with respect to any deferred compensation item 
     referred to in paragraph (4)(D), the rights of the covered 
     expatriate to such item shall be treated as becoming 
     transferable and not subject to a substantial risk of 
     forfeiture on the day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the plan to reflect such treatment.
       ``(3) Eligible deferred compensation items.--For purposes 
     of this subsection, the term `eligible deferred compensation 
     item' means any deferred compensation item with respect to 
     which--
       ``(A) the payor of such item is--
       ``(i) a United States person, or
       ``(ii) a person who is not a United States person but who 
     elects to be treated as a United States person for purposes 
     of paragraph (1) and meets such requirements as the Secretary 
     may provide to ensure that the payor will meet the 
     requirements of paragraph (1), and
       ``(B) the covered expatriate--
       ``(i) notifies the payor of his status as a covered 
     expatriate, and
       ``(ii) makes an irrevocable waiver of any right to claim 
     any reduction under any treaty with the United States in 
     withholding on such item.
       ``(4) Deferred compensation item.--For purposes of this 
     subsection, the term `deferred compensation item' means--
       ``(A) any interest in a plan or arrangement described in 
     section 219(g)(5),
       ``(B) any interest in a foreign pension plan or similar 
     retirement arrangement or program,
       ``(C) any item of deferred compensation, and
       ``(D) any property, or right to property, which the 
     individual is entitled to receive in connection with the 
     performance of services to the extent not previously taken 
     into account under section 83 or in accordance with section 
     83.
       ``(5) Exception.--Paragraphs (1) and (2) shall not apply to 
     any deferred compensation item which is attributable to 
     services performed outside the United States while the 
     covered expatriate was not a citizen or resident of the 
     United States.
       ``(6) Special rules.--
       ``(A) Application of withholding rules.--Rules similar to 
     the rules of subchapter B of chapter 3 shall apply for 
     purposes of this subsection.
       ``(B) Application of tax.--Any item subject to the 
     withholding tax imposed under paragraph (1) shall be subject 
     to tax under section 871.
       ``(C) Coordination with other withholding requirements.--
     Any item subject to withholding under paragraph (1) shall not 
     be subject to withholding under section 1441 or chapter 24.
       ``(e) Treatment of Specified Tax Deferred Accounts.--
       ``(1) Account treated as distributed.--In the case of any 
     interest in a specified tax deferred account held by a 
     covered expatriate on the day before the expatriation date--
       ``(A) the covered expatriate shall be treated as receiving 
     a distribution of his entire interest in such account on the 
     day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the account to reflect such treatment.
       ``(2) Specified tax deferred account.--For purposes of 
     paragraph (1), the term `specified tax deferred account' 
     means an individual retirement plan (as defined in section 
     7701(a)(37)) other than any arrangement described in 
     subsection (k) or (p) of section 408, a qualified tuition 
     program (as defined in section 529), a Coverdell education 
     savings account (as defined in section 530), a health savings 
     account (as defined in section 223), and an Archer MSA (as 
     defined in section 220).
       ``(f) Special Rules for Nongrantor Trusts.--
       ``(1) In general.--In the case of a distribution (directly 
     or indirectly) of any property from a nongrantor trust to a 
     covered expatriate--
       ``(A) the trustee shall deduct and withhold from such 
     distribution an amount equal to 30 percent of the taxable 
     portion of the distribution, and
       ``(B) if the fair market value of such property exceeds its 
     adjusted basis in the hands of the trust, gain shall be 
     recognized to the trust as if such property were sold to the 
     expatriate at its fair market value.
       ``(2) Taxable portion.--For purposes of this subsection, 
     the term `taxable portion' means, with respect to any 
     distribution, that portion of the distribution which would be 
     includible in the gross income of the covered expatriate if 
     such expatriate continued to be subject to tax as a citizen 
     or resident of the United States.
       ``(3) Nongrantor trust.--For purposes of this subsection, 
     the term `nongrantor trust' means the portion of any trust 
     that the individual is not considered the owner of under 
     subpart E of part I of subchapter J. The determination under 
     the preceding sentence shall be made immediately before the 
     expatriation date.
       ``(4) Special rules relating to withholding.--For purposes 
     of this subsection--
       ``(A) rules similar to the rules of subsection (d)(6) shall 
     apply, and
       ``(B) the covered expatriate shall be treated as having 
     waived any right to claim any reduction under any treaty with 
     the United States in withholding on any distribution to which 
     paragraph (1)(A) applies.
       ``(g) Definitions and Special Rules Relating to 
     Expatriation.--For purposes of this section--
       ``(1) Covered expatriate.--
       ``(A) In general.--The term `covered expatriate' means an 
     expatriate who meets the requirements of subparagraph (A), 
     (B), or (C) of section 877(a)(2).
       ``(B) Exceptions.--An individual shall not be treated as 
     meeting the requirements of subparagraph (A) or (B) of 
     section 877(a)(2) if--
       ``(i) the individual--

       ``(I) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(II) has been a resident of the United States (as defined 
     in section 7701(b)(1)(A)(ii)) for not more than 10 taxable 
     years during the 15-taxable year period ending with the 
     taxable year during which the expatriation date occurs, or

       ``(ii)(I) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(II) the individual has been a resident of the United 
     States (as so defined) for not more than 10 taxable years 
     before the date of relinquishment.
       ``(C) Covered expatriates also subject to tax as citizens 
     or residents.--In the case of any covered expatriate who is 
     subject to tax as a citizen or resident of the United States 
     for any period beginning after the expatriation date, such 
     individual shall not be

[[Page 26956]]

     treated as a covered expatriate during such period for 
     purposes of subsections (d)(1) and (f) and section 2801.
       ``(2) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes his 
     citizenship, and
       ``(B) any long-term resident of the United States who 
     ceases to be a lawful permanent resident of the United States 
     (within the meaning of section 7701(b)(6)).
       ``(3) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date on which the individual ceases to be a 
     lawful permanent resident of the United States (within the 
     meaning of section 7701(b)(6)).
       ``(4) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing his United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces his United States 
     nationality before a diplomatic or consular officer of the 
     United States pursuant to paragraph (5) of section 349(a) of 
     the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(5) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(6) Early distribution tax.--The term `early distribution 
     tax' means any increase in tax imposed under section 72(t), 
     220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
       ``(h) Other Rules.--
       ``(1) Termination of deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(A) any time period for acquiring property which would 
     result in the reduction in the amount of gain recognized with 
     respect to property disposed of by the taxpayer shall 
     terminate on the day before the expatriation date, and
       ``(B) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(2) Step-up in basis.--Solely for purposes of determining 
     any tax imposed by reason of subsection (a), property which 
     was held by an individual on the date the individual first 
     became a resident of the United States (within the meaning of 
     section 7701(b)) shall be treated as having a basis on such 
     date of not less than the fair market value of such property 
     on such date. The preceding sentence shall not apply if the 
     individual elects not to have such sentence apply. Such an 
     election, once made, shall be irrevocable.
       ``(3) Coordination with section 684.--If the expatriation 
     of any individual would result in the recognition of gain 
     under section 684, this section shall be applied after the 
     application of section 684.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Tax on Gifts and Bequests Received by United States 
     Citizens and Residents From Expatriates.--
       (1) In general.--Subtitle B (relating to estate and gift 
     taxes) is amended by inserting after chapter 14 the following 
     new chapter:

           ``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

``Sec. 2801. Imposition of tax.

     ``SEC. 2801. IMPOSITION OF TAX.

       ``(a) In General.--If, during any calendar year, any United 
     States citizen or resident receives any covered gift or 
     bequest, there is hereby imposed a tax equal to the product 
     of--
       ``(1) the highest rate of tax specified in the table 
     contained in section 2001(c) as in effect on the date of such 
     receipt (or, if greater, the highest rate of tax specified in 
     the table applicable under section 2502(a) as in effect on 
     the date), and
       ``(2) the value of such covered gift or bequest.
       ``(b) Tax To Be Paid by Recipient.--The tax imposed by 
     subsection (a) on any covered gift or bequest shall be paid 
     by the person receiving such gift or bequest.
       ``(c) Exception for Certain Gifts.--Subsection (a) shall 
     apply only to the extent that the value of covered gifts and 
     bequests received by any person during the calendar year 
     exceeds $10,000.
       ``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax 
     imposed by subsection (a) on any covered gift or bequest 
     shall be reduced by the amount of any gift or estate tax paid 
     to a foreign country with respect to such covered gift or 
     bequest.
       ``(e) Covered Gift or Bequest.--
       ``(1) In general.--For purposes of this chapter, the term 
     `covered gift or bequest' means--
       ``(A) any property acquired by gift directly or indirectly 
     from an individual who, at the time of such acquisition, is a 
     covered expatriate, and
       ``(B) any property acquired directly or indirectly by 
     reason of the death of an individual who, immediately before 
     such death, was a covered expatriate.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Such term shall not include--
       ``(A) any property shown on a timely filed return of tax 
     imposed by chapter 12 which is a taxable gift by the covered 
     expatriate, and
       ``(B) any property included in the gross estate of the 
     covered expatriate for purposes of chapter 11 and shown on a 
     timely filed return of tax imposed by chapter 11 of the 
     estate of the covered expatriate.
       ``(3) Transfers in trust.--
       ``(A) Domestic trusts.--In the case of a covered gift or 
     bequest made to a domestic trust--
       ``(i) subsection (a) shall apply in the same manner as if 
     such trust were a United States citizen, and
       ``(ii) the tax imposed by subsection (a) on such gift or 
     bequest shall be paid by such trust.
       ``(B) Foreign trusts.--
       ``(i) In general.--In the case of a covered gift or bequest 
     made to a foreign trust, subsection (a) shall apply to any 
     distribution attributable to such gift or bequest from such 
     trust (whether from income or corpus) to a United States 
     citizen or resident in the same manner as if such 
     distribution were a covered gift or bequest.
       ``(ii) Deduction for tax paid by recipient.--There shall be 
     allowed as a deduction under section 164 the amount of tax 
     imposed by this section which is paid or accrued by a United 
     States citizen or resident by reason of a distribution from a 
     foreign trust, but only to the extent such tax is imposed on 
     the portion of such distribution which is included in the 
     gross income of such citizen or resident.
       ``(iii) Election to be treated as domestic trust.--Solely 
     for purposes of this section, a foreign trust may elect to be 
     treated as a domestic trust. Such an election may be revoked 
     with the consent of the Secretary.
       ``(f) Covered Expatriate.--For purposes of this section, 
     the term `covered expatriate' has the meaning given to such 
     term by section 877A(g)(1).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     B is amended by inserting after the item relating to chapter 
     14 the following new item:

         ``Chapter 15. Gifts and Bequests From Expatriates.''.

       (c) Definition of Termination of United States 
     Citizenship.--
       (1) In general.--Section 7701(a) is amended by adding at 
     the end the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(g)(4).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 877(e) is amended to read as 
     follows:
       ``(1) In general.--Any long-term resident of the United 
     States who ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)) 
     shall be treated for purposes of this section and sections 
     2107, 2501, and 6039G in the same manner as if such resident 
     were a citizen of the United States who lost United States 
     citizenship on the date of such cessation or commencement.''.
       (B) Paragraph (6) of section 7701(b) is amended by adding 
     at the end the following flush sentence:

     ``An individual shall cease to be treated as a lawful 
     permanent resident of the United States if such individual 
     commences to be treated as a resident of a foreign country 
     under the provisions of a tax treaty between the United 
     States and the foreign country, does not waive the benefits 
     of such treaty applicable to residents of the foreign 
     country, and notifies the Secretary of the commencement of 
     such treatment.''.
       (C) Section 7701 is amended by striking subsection (n) and 
     by redesignating subsections (o) and (p) as subsections (n) 
     and (o), respectively.
       (d) Information Returns.--Section 6039G is amended--
       (1) by inserting ``or 877A'' after ``section 877(b)'' in 
     subsection (a), and
       (2) by inserting ``or 877A'' after ``section 877(a)'' in 
     subsection (d).

[[Page 26957]]

       (e) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.
       (f) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (as defined in section 877A(g) of the Internal Revenue Code 
     of 1986, as added by this section) whose expatriation date 
     (as so defined) is on or after the date of the enactment of 
     this Act.
       (2) Gifts and bequests.--Chapter 15 of the Internal Revenue 
     Code of 1986 (as added by subsection (b)) shall apply to 
     covered gifts and bequests (as defined in section 2801 of 
     such Code, as so added) received on or after the date of the 
     enactment of this Act, regardless of when the transferor 
     expatriated.

     SEC. 6. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND 
                   INTEREST.

       (a) In General.--Section 6404 is amended by striking 
     subsection (g) and by redesignating subsection (h) as 
     subsection (g).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to notices provided by the Secretary of the 
     Treasury, or his delegate, after the date which is 6 months 
     after the date of the enactment of the Small Business and 
     Work Opportunity Tax Act of 2007.

     SEC. 7. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure To File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$600,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$25''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$200,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$400,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$250,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$150,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Failure To Furnish Correct Payee Statements.--
       (1) In general.--Subsection (a) of section 6722 is amended 
     by striking ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a) and 
     (c)(2)(A) of section 6722 are each amended by striking 
     ``$100,000'' and inserting ``$600,000''.
       (3) Penalty in case of intentional disregard.--Paragraph 
     (1) of section 6722(c) is amended by striking ``$100'' and 
     inserting ``$250''.
       (g) Failure To Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$100'', and
       (2) by striking ``$100,000'' and inserting ``$600,000''.
       (h) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2008.

     SEC. 8. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``115 percent'' and inserting ``115.50 percent''.
                                  ____

       (The information contained herein was provided by 
     Democratic Minority on multiple occasions throughout the 
     109th Congress.)

        The Vote on the Previous Question: What It Really Means

       This vote, the vote on whether to order the previous 
     question on a special rule, is not merely a procedural vote. 
     A vote against ordering the previous question is a vote 
     against the Democratic majority agenda and a vote to allow 
     the opposition, at least for the moment, to offer an 
     alternative plan. It is a vote about what the House should be 
     debating.
       Mr. Clarence Cannon's Precedents of the House of 
     Representatives, (VI, 308-311) describes the vote on the 
     previous question on the rule as ``a motion to direct or 
     control the consideration of the subject before the House 
     being made by the Member in charge.'' To defeat the previous 
     question is to give the opposition a chance to decide the 
     subject before the House. Cannon cites the Speaker's ruling 
     of January 13, 1920, to the effect that ``the refusal of the 
     House to sustain the demand for the previous question passes 
     the control of the resolution to the opposition'' in order to 
     offer an amendment. On March 15, 1909, a member of the 
     majority party offered a rule resolution. The House defeated 
     the previous question and a member of the opposition rose to 
     a parliamentary inquiry, asking who was entitled to 
     recognition. Speaker Joseph G. Cannon (R-Illinois) said: 
     ``The previous question having been refused, the gentleman 
     from New York, Mr. Fitzgerald, who had asked the gentleman to 
     yield to him for an amendment, is entitled to the first 
     recognition.''
       Because the vote today may look bad for the Democratic 
     majority they will say ``the vote on the previous question is 
     simply a vote on whether to proceed to an immediate vote on 
     adopting the resolution . . . [and] has no substantive 
     legislative or policy implications whatsoever.'' But that is 
     not what they have always said. Listen to the definition of 
     the previous question used in the Floor Procedures Manual 
     published by the Rules Committee in the 109th Congress, (page 
     56). Here's how the Rules Committee described the rule using 
     information form Congressional Quarterly's ``American 
     Congressional Dictionary'': ``If the previous question is 
     defeated, control of debate shifts to the leading opposition 
     member (usually the minority Floor Manager) who then manages 
     an hour of debate and may offer a germane amendment to the 
     pending business.''
       Deschler's Procedure in the U.S. House of Representatives, 
     the subchapter titled ``Amending Special Rules'' states: ``a 
     refusal to order the previous question on such a rule [a 
     special rule reported from the Committee on Rules] opens the 
     resolution to amendment and further debate.'' (Chapter 21, 
     section 21.2) Section 21.3 continues: Upon rejection of the 
     motion for the previous question on a resolution reported 
     from the Committee on Rules, control shifts to the Member 
     leading the opposition to the previous question, who may 
     offer a proper amendment or motion and who controls the time 
     for debate thereon.''
       Clearly, the vote on the previous question on a rule does 
     have substantive policy implications. It is one of the only 
     available tools for those who oppose the Democratic 
     majority's agenda and allows those with alternative views the 
     opportunity to offer an alternative plan.

  Mr. CARDOZA. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the resolution.
  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SESSIONS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  The point of no quorum is considered withdrawn.

                          ____________________