[Congressional Record (Bound Edition), Volume 161 (2015), Part 10]
[Senate]
[Pages 14197-14200]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         SUBMITTED RESOLUTIONS

                                 ______
                                 

 SENATE RESOLUTION 252--EXPRESSING THE SENSE OF THE COMMITTEE ON SMALL 
  BUSINESS AND ENTREPRENEURSHIP OF THE SENATE RELATING TO EASING THE 
          BURDEN OF FEDERAL TAX COMPLIANCE ON SMALL BUSINESSES

  Mr. VITTER submitted the following resolution; from the Committee on 
Small Business and Entrepreneurship; which was placed on the calendar:

                              S. Res. 252

       Whereas American small businesses face major obstacles 
     complying with their Federal tax obligations;
       Whereas the complexity of the Federal tax code unfairly 
     penalizes small businesses;
       Whereas such complexity requires small business owners to 
     spend significant amounts of time, money, and resources 
     complying with their tax obligations and less time operating 
     their business;
       Whereas Congress has exacerbated these challenges for 
     America's small businesses by failing to update the tax code 
     in a manner that properly reflects current circumstances;
       Whereas tax policy should also promote increased savings by 
     American citizens to be able to afford the costs of living 
     deeper into old age;
       Whereas employee stock ownership plans help small 
     businesses offer economic incentives to employees and help 
     employees save more for their retirements via investments in 
     their employing companies;
       Whereas tax policy should support small businesses in 
     providing benefit packages to their employees to be 
     competitive with larger employers for the best talent;
       Whereas the successful research and development tax credit 
     has been used to incentivize private firms to invest in 
     research and development, and private investment leads to 
     spillover effects that can have a broad public good through 
     the creation of new products, the development of new 
     processes, and the launching of new industries;
       Whereas while the research and development tax credit is 
     essential for our innovators, it is not accessible to many 
     small businesses and startups--per the Government 
     Accountability Office, over half of the credit goes to firms 
     with $1,000,000,000 or more in receipts;
       Whereas, according to the Congressional Research Service, 
     numerous commercially successful innovations originated in 
     small, fledgling firms that could not access the research and 
     development credit;
       Whereas, if Congress made the research and development tax 
     credit more available to small businesses and startups, 
     thousands of innovative small firms could claim the credit, 
     boosting their capacity to invest in innovation and job 
     creation; and
       Whereas prudent changes to the structure of the Federal tax 
     code would ease the burden of tax compliance, allowing small 
     businesses to put more money back into their business, 
     community, and the economy: Now, therefore, be it
       Resolved, That it is the sense of the Committee on Small 
     Business and Entrepreneurship that the Senate should enact 
     the following:

[[Page 14198]]



                   TITLE I--SMALL BUSINESS TAX REFORM

     SEC. 101. EXPANSION OF CASH ACCOUNTING THRESHOLD.

       (a) In General.--
       (1) In general.--Paragraph (3) of section 448(b) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``$5,000,000'' in the text and in the heading and inserting 
     ``$25,000,000''.
       (2) Conforming amendments.--Section 448(c) of such Code is 
     amended--
       (A) by striking ``$5,000,000'' each place it appears in the 
     text and in the heading of paragraph (1) and inserting 
     ``$25,000,000'', and
       (B) by adding at the end the following new paragraph:
       ``(4) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2015, the dollar 
     amount contained in subsection (b)(3) and paragraph (1) of 
     this subsection shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) 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 2014' for 
     `calendar year 1992' in subparagraph (B) thereof.

     If any amount as adjusted under this subparagraph is not a 
     multiple of $100,000, such amount shall be rounded to the 
     nearest multiple of $100,000.''.
       (b) Exemption From Inventory Requirement.--Section 471 of 
     the Internal Revenue Code of 1986 is amended by redesignating 
     subsection (c) as subsection (d) and by inserting after 
     subsection (b) the following new subsection:
       ``(c) Section Not to Apply to Certain Cash Method 
     Taxpayers.--If a taxpayer--
       ``(1) would otherwise be required to use inventories under 
     this section for any taxable year, but
       ``(2) the taxpayer meets the gross receipts test of section 
     448(b) for the taxable year and is eligible and elects to use 
     the cash receipts and disbursements method of accounting for 
     the taxable year,

     then the requirement to use inventories shall not apply to 
     the taxpayer for the taxable year.''.
       (c) Effective Date and Special Rule.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2014.
       (2) Change in method of accounting.--In the case of any 
     taxpayer changing the taxpayer's method of accounting for any 
     taxable year under the amendments made by this section--
       (A) such change shall be treated as initiated by the 
     taxpayer; and
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury.

     SEC. 102. MODIFICATION OF SAFE HARBOR FOR EXPENSING OF 
                   ACQUISITION OR PRODUCTION COSTS OF TANGIBLE 
                   PROPERTY.

       (a) Requirement to Modify Safe Harbor.--The Secretary of 
     the Treasury or his delegate shall, within 180 days after the 
     date of enactment of this Act, modify Treasury Regulations 
     section 1.263(a)-1(f) by--
       (1) increasing the amount of the de minimis safe harbor for 
     taxpayers without applicable financial statements from $500 
     to $2,500,
       (2) requiring adequate records showing the dollar amount 
     being expensed in lieu of accounting procedures in place at 
     the beginning of the taxable year, and
       (3) modifying the definition of applicable financial 
     statement to include reviewed financial statements.
       (b) Effective Date.--The modifications required by 
     subsection (a) shall apply to taxable years beginning after 
     December 31, 2014.
  


     SEC. 103. REMOVAL OF COMPUTER EQUIPMENT FROM LISTED PROPERTY.

       (a) In General.--Section 280F(d)(4)(A) of the Internal 
     Revenue Code of 1986 is amended by inserting ``and'' at the 
     end of clause (iii) and by striking clause (iv).
       (b) Conforming Amendment.--Section 280F(d)(4) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraph (B) and by redesignating subparagraph (C) as 
     subparagraph (B).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 104. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING 
                   SELF-EMPLOYMENT TAXES.

       (a) In General.--Paragraph (4) of section 162(l) of the 
     Internal Revenue Code of 1986 is amended by striking ``for 
     taxable years beginning before January 1, 2010, or after 
     December 31, 2010'' and inserting ``for taxable years 
     beginning before January 1, 2015.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2014.

     SEC. 105. MODIFICATION OF RULES RELATING TO THE TERMINATION 
                   OF PARTNERSHIPS AND S CORPORATIONS.

       (a) No Termination of Partnership on Sale or Exchange of 
     Assets.--
       (1) In general.--Section 708(b)(1) of the Internal Revenue 
     Code of 1986 is amended by striking ``only if'' and all that 
     follows and inserting ``only if no part of any business, 
     financial operation, or venture of the partnership continues 
     to be carried on by any of its partners in a partnership.''.
       (2) Conforming amendments.--
       (A) Section 168(i)(7)(B) of such Code is amended by 
     striking the last sentence.
       (B) Section 743(e) of such Code is amended by striking 
     paragraph (4).
       (C) Section 774 of such Code is amended by striking 
     subsection (c).
       (b) No Termination of S Corporation Status Due to Excessive 
     Passive Investment Income.--Paragraph (3) of section 1362(d) 
     of the Internal Revenue Code of 1986 is amended by adding at 
     the end the following new subparagraph:
       ``(D) Termination.--This paragraph shall not apply to 
     taxable years ending after the date of the enactment of this 
     subparagraph.''.

      TITLE II--PROVISIONS RELATED TO THE INTERNAL REVENUE SERVICE

     SEC. 201. INFLATION ADJUSTMENTS FOR CERTAIN PROVISIONS.

       (a) In General.--Chapter 77 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     section:

     ``SEC. 7529. INFLATION ADJUSTMENTS.

       ``(a) In General.--In the case of any taxable year 
     beginning in a calendar year after 2015, each of the 
     specified dollar amounts shall be increased by an amount 
     equal to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2014' 
     for `calendar year 1992' in subparagraph (B) thereof.
       ``(b) Specified Dollar Amounts.--For purposes of subsection 
     (a), the specified dollar amounts are--
       ``(1) the $50,000 amount in section 79(a)(1),
       ``(2) each of the $5,250 amounts in section 127(a)(2),
       ``(3) each of the $500 amounts in paragraphs (11)(A), 
     (11)(B), and (12) of section 170(f),
       ``(4) the $5,000 amount in section 170(f)(11)(C),
       ``(5) the $10,000,000 amount in section 263A(b)(2),
       ``(6) each of the dollar amounts in section 274(b)(1),
       ``(7) each of the $400 amounts in section 274(j),
       ``(8) the $1,600 amount in section 274(j)(2)(B),
       ``(9) the $10,000,000 amount in section 1202(b)(1),
       ``(10) each of the $50,000,000 amounts in section 
     1202(d)(1),
       ``(11) the $50,000 amount in section 1244(b)(1), and
       ``(12) the $1,000,000 in section 1244(c)(3)(A).
       ``(c) Rounding.--
       ``(1) Any increase determined under paragraph (5), (9), or 
     (10) of subsection (b) shall be rounded to the nearest 
     multiple of $100,000.
       ``(2) Any increase determined under paragraph (1), (4), 
     (11), or (12) of subsection (b) shall be rounded to the 
     nearest multiple of $1,000.
       ``(3) Any increase determined under paragraph (2) of 
     subsection (b) shall be rounded to the nearest multiple of 
     $500.
       ``(4) Any increase determined under paragraph (3), (7), or 
     (8) of subsection (b) shall be rounded to the nearest 
     multiple of $100.
       ``(5) Any increase determined under paragraph (6) of 
     subsection (b) shall be rounded to the nearest multiple of 
     $5.''.
       (b) Conforming Amendments.--
       (1) Section 1202(b)(3) of such Code is amended by striking 
     ``paragraph (1)(A) shall be applied by substituting 
     `$5,000,000' for `$10,000,000''' and inserting ``the amount 
     under paragraph (1)(A) shall be 50 percent of such dollar 
     amount (determined without regard to this paragraph)''.
       (2) Section 1244(b)(2) of such Code is amended by striking 
     ``$100,000'' and inserting ``200 percent of the amount under 
     paragraph (1)''.
       (c) Clerical Amendment.--The table of sections for chapter 
     77 of such Code is amended by adding at the end the following 
     new item:

``Sec. 7529. Inflation adjustments.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 202. REPORT ON IMPROVEMENTS TO CUSTOMER SERVICE.

       Not later than June 30, 2016, the Commissioner of Internal 
     Revenue shall submit to the Committee on Small Business and 
     Entrepreneurship of the Senate, the Committee on Finance of 
     the Senate, and the Committee on Ways and Means of the House 
     of Representatives a report detailing specific ways to 
     improve customer service to small businesses, including 
     objectively measurable goals for how to reduce response 
     times.

     SEC. 203. RETURN DUE DATE MODIFICATIONS.

       (a) New Due Date for Partnership Form 1065, S Corporation 
     Form 1120S, and C Corporation Form 1120.--
       (1) Partnerships.--
       (A) In general.--Section 6072 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(f) Returns of Partnerships.--Returns of partnerships 
     under section 6031 made on the basis of the calendar year 
     shall be filed on or before the 15th day of March following 
     the close of the calendar year, and such returns made on the 
     basis of a fiscal year shall be filed on or before the 15th 
     day of the third month following the close of the fiscal 
     year.''.

[[Page 14199]]

       (B) Conforming amendment.--Section 6072(a) of such Code is 
     amended by striking ``6017, or 6031'' and inserting ``or 
     6017''.
       (2) S corporations.--
       (A) In general.--So much of subsection (b) of 6072 of such 
     Code as precedes the second sentence thereof is amended to 
     read as follows:
       ``(b) Returns of Certain Corporations.--Returns of S 
     corporations under sections 6012 and 6037 made on the basis 
     of the calendar year shall be filed on or before the 31st day 
     of March following the close of the calendar year, and such 
     returns made on the basis of a fiscal year shall be filed on 
     or before the last day of the third month following the close 
     of the fiscal year.''.
       (B) Conforming amendments.--
       (i) Section 1362(b) of such Code is amended--

       (I) by striking ``15th'' each place it appears and 
     inserting ``last'',
       (II) by striking ``2\1/2\'' each place it appears and 
     inserting ``3'', and
       (III) by striking ``2 months and 15 days'' in paragraph (4) 
     and inserting ``3 months''.

       (ii) Section 1362(d)(1)(C)(i) of such Code is amended by 
     striking ``15th'' and inserting ``last''.
       (iii) Section 1362(d)(1)(C)(ii) of such Code is amended by 
     striking ``such 15th day'' and inserting ``the last day of 
     the 3d month thereof''.
       (3) Conforming amendments relating to c corporations.--
       (A) Section 170(a)(2)(B) of such Code is amended by 
     striking ``third month'' and inserting ``4th month''.
       (B) Section 563 of such Code is amended by striking ``third 
     month'' each place it appears and inserting ``4th month''.
       (C) Section 1354(d)(1)(B)(i) of such Code is amended by 
     striking ``3d month'' and inserting ``4th month''.
       (D) Subsection (a) and (c) of section 6167 of such Code are 
     each amended by striking ``third month'' and inserting ``4th 
     month''.
       (E) Section 6425(a)(1) of such Code is amended by striking 
     ``third month'' and inserting ``4th month''.
       (F) Subsections (b)(2)(A), (g)(3), and (h)(1) of section 
     6655 of such Code are each amended by striking ``3rd month'' 
     and inserting ``4th month''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to returns for taxable years beginning after 
     December 31, 2015.
       (b) Modification of Due Dates by Regulation.--In the case 
     of returns for taxable years beginning after December 31, 
     2013, the Secretary of the Treasury or the Secretary's 
     delegate shall modify appropriate regulations to provide as 
     follows:
       (1) The maximum extension for the returns of partnerships 
     filing Form 1065 shall be a 6-month period beginning on the 
     due date for filing the return (without regard to any 
     extensions).
       (2) The maximum extension for the returns of trusts and 
     estates filing Form 1041 shall be a 5\1/2\-month period 
     beginning on the due date for filing the return (without 
     regard to any extensions).
       (3) The maximum extension for the returns of employee 
     benefit plans filing Form 5500 shall be an automatic 3\1/2\-
     month period beginning on the due date for filing the return 
     (without regard to any extensions).
       (4) The maximum extension for the Forms 990 (series) 
     returns of organizations exempt from income tax shall be an 
     automatic 6-month period beginning on the due date for filing 
     the return (without regard to any extensions).
       (5) The maximum extension for the returns of organizations 
     exempt from income tax that are required to file Form 4720 
     returns of excise taxes shall be an automatic 6-month period 
     beginning on the due date for filing the return (without 
     regard to any extensions).
       (6) The maximum extension for the returns of trusts 
     required to file Form 5227 shall be an automatic 6-month 
     period beginning on the due date for filing the return 
     (without regard to any extensions).
       (7) The maximum extension for the returns of Black Lung 
     Benefit Trusts required to file Form 6069 returns of excise 
     taxes shall be an automatic 6-month period beginning on the 
     due date for filing the return (without regard to any 
     extensions).
       (8) The maximum extension for a taxpayer required to file 
     Form 8870 shall be an automatic 6-month period beginning on 
     the due date for filing the return (without regard to any 
     extensions).
       (9) The due date of Form 3520-A, Annual Information Return 
     of a Foreign Trust with a United States Owner, shall be the 
     15th day of the 4th month after the close of the trust's 
     taxable year, and the maximum extension shall be a 6-month 
     period beginning on such day.
       (10) The due date of FinCEN Form 114 (relating to Report of 
     Foreign Bank and Financial Accounts) shall be April 15 with a 
     maximum extension for a 6-month period ending on October 15, 
     and with provision for an extension under rules similar to 
     the rules of 26 C.F.R. 1.6081-5. For any taxpayer required to 
     file such form for the first time, the Secretary of the 
     Treasury may waive any penalty for failure to timely request 
     or file an extension.
       (11) Taxpayers filing Form 3520, Annual Return to Report 
     Transactions with Foreign Trusts and Receipt of Certain 
     Foreign Gifts, shall be allowed to extend the time for filing 
     such form separately from the income tax return of the 
     taxpayer, for an automatic 6-month period beginning on the 
     due date for filing the return (without regard to any 
     extensions).
       (c) Corporations Permitted Statutory Automatic 6-month 
     Extension of Income Tax Returns.--
       (1) In general.--Section 6081(b) of the Internal Revenue 
     Code of 1986 is amended by striking ``3 months'' and 
     inserting ``6 months''.
       (2) Effective date.--The amendment made by this section 
     shall apply to returns for taxable years beginning after 
     December 31, 2015.

          TITLE III--PROVISIONS RELATED TO START-UP BUSINESSES

     SEC. 301. REDUCTION IN HOLDING PERIOD FOR QUALIFIED SMALL 
                   BUSINESS STOCK.

       (a) In General.--Paragraph (1) of section 1202(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``5 
     years'' and inserting ``3 years''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 1202(b) of such Code is 
     amended by striking ``5 years'' and inserting ``3 years''
       (2) Subparagraph (A) of section 1202(g)(2) of such Code is 
     amended by striking ``5 years'' and inserting ``3 years'',
       (3) Subparagraph (C) of section 1202(h)(2) of such Code is 
     amended by striking ``5-year'' and inserting ``3-year'', and
       (4) Subparagraph (A) of section 1202(j)(1) of such Code is 
     amended by striking ``5 years'' and inserting ``3 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to stock issued after the date of the enactment 
     of this Act.

     SEC. 302. EXTENSION OF ROLLOVER PERIOD FOR QUALIFIED SMALL 
                   BUSINESS STOCK.

       (a) In General.--Paragraph (1) of section 1045(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``60-day 
     period'' and inserting ``1-year period''.
       (b) Conforming Amendment.--Paragraph (3) of section 1045(b) 
     of such Code is amended by striking ``60-day period'' and 
     inserting ``1-year period''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to sales after the date of the enactment of this 
     Act.

    TITLE IV--PROMOTION AND EXPANSION OF PRIVATE EMPLOYEE OWNERSHIP

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Promotion and Expansion of 
     Private Employee Ownership Act of 2015''.

     SEC. 402. FINDINGS.

       Congress finds that--
       (1) on January 1, 1998--nearly 25 years after the Employee 
     Retirement Income Security Act of 1974 was enacted and the 
     employee stock ownership plan (hereafter in this section 
     referred to as an ``ESOP'') was created--employees were first 
     permitted to be owners of subchapter S corporations pursuant 
     to the Small Business Job Protection Act of 1996 (Public Law 
     104-188);
       (2) with the passage of the Taxpayer Relief Act of 1997 
     (Public Law 105-34), Congress designed incentives to 
     encourage businesses to become ESOP-owned S corporations;
       (3) since that time, several thousand companies have become 
     ESOP-owned S corporations, creating an ownership interest for 
     several million Americans in companies in every State in the 
     country, in industries ranging from heavy manufacturing to 
     technology development to services;
       (4) while estimates show that 40 percent of working 
     Americans have no formal retirement account at all, every 
     United States worker who is an employee-owner of an S 
     corporation company through an ESOP has a valuable qualified 
     retirement savings account;
       (5) recent studies have shown that employees of ESOP-owned 
     S corporations enjoy greater job stability than employees of 
     comparable companies;
       (6) studies also show that employee-owners of S corporation 
     ESOP companies have amassed meaningful retirement savings 
     through their S ESOP accounts that will give them the means 
     to retire with dignity;
       (7) under the Small Business Act (15 U.S.C. 631 et seq.) 
     and the regulations promulgated by the Administrator of the 
     Small Business Administration, a small business concern that 
     was eligible under the Small Business Act for the numerous 
     preferences of the Act is denied treatment as a small 
     business concern after an ESOP acquires more than 49 percent 
     of the business, even if the number of employees, the revenue 
     of the small business concern, and the racial, gender, or 
     other criteria used under the Act to determine whether the 
     small business concern is eligible for benefits under the Act 
     remain the same, solely because of the acquisition by the 
     ESOP; and
       (8) it is the goal of Congress to both preserve and foster 
     employee ownership of S corporations through ESOPs.

     SEC. 403. DEFERRAL OF TAX FOR CERTAIN SALES OF EMPLOYER STOCK 
                   TO EMPLOYEE STOCK OWNERSHIP PLAN SPONSORED BY S 
                   CORPORATION.

       (a) In General.--Subparagraph (A) of section 1042(c)(1) of 
     the Internal Revenue Code

[[Page 14200]]

     of 1986 is amended by striking ``domestic C corporation'' and 
     inserting ``domestic corporation''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to sales after the date of the enactment of this 
     Act.

     SEC. 404. DEPARTMENT OF TREASURY TECHNICAL ASSISTANCE OFFICE.

       (a) Establishment Required.--Before the end of the 90-day 
     period beginning on the date of enactment of this Act, the 
     Secretary of Treasury shall establish the S Corporation 
     Employee Ownership Assistance Office to foster increased 
     employee ownership of S corporations.
       (b) Duties of the Office.--The S Corporation Employee 
     Ownership Assistance Office shall provide--
       (1) education and outreach to inform companies and 
     individuals about the possibilities and benefits of employee 
     ownership of S corporations; and
       (2) technical assistance to assist S corporations in 
     sponsoring employee stock ownership plans.

     SEC. 405. SMALL BUSINESS AND EMPLOYEE STOCK OWNERSHIP.

       (a) In General.--The Small Business Act (15 U.S.C. 631 et 
     seq.) is amended--
       (1) by redesignating section 47 as section 48; and
       (2) by inserting after section 46 the following:

     ``SEC. 47. EMPLOYEE STOCK OWNERSHIP PLANS.

       ``(a) Definitions.--In this section--
       ``(1) the term `ESOP' means an employee stock ownership 
     plan, as defined in section 4975(e)(7) of the Internal 
     Revenue Code of 1986, as amended; and
       ``(2) the term `ESOP business concern' means a business 
     concern that was a small business concern eligible for a 
     loan, preference, or other program under this Act before the 
     date on which more than 49 percent of the business concern 
     was acquired by an ESOP.
       ``(b) Continued Eligibility.--In determining whether an 
     ESOP business concern qualifies as a small business concern 
     for purposes of a loan, preference, or other program under 
     this Act, each ESOP participant shall be treated as directly 
     owning his or her proportionate share of the stock in the 
     ESOP business concern owned by the ESOP.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on January 1 of the first calendar year 
     beginning after the date of the enactment of this Act.

                          ____________________