I
111th CONGRESS
2d Session
H. R. 5486
IN THE HOUSE OF REPRESENTATIVES
June 9, 2010
Mr. Levin introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes.
Tax provisions
Short title; etc
Short title
This title may be cited
as the Small Business Jobs Tax Relief
Act of 2010
.
Amendment of 1986 Code
Except as otherwise expressly provided, whenever in this title 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.
Table of contents
The table of contents for this title is as follows:
Sec. 500. Short title; etc.
Subtitle A—Small business tax incentives
Part 1—General provisions
Sec. 501. Temporary exclusion of 100 percent of gain on certain small business stock.
Part 2—Limitations and reporting on certain penalties
Sec. 511. Limitation on penalty for failure to disclose certain information.
Sec. 512. Annual reports on penalties and certain other enforcement actions.
Part 3—Other provisions
Sec. 521. Increase in amount allowed as deduction for start-up expenditures.
Sec. 522. Nonrecourse small business investment company loans from the Small Business Administration treated as amounts at risk.
Sec. 523. Benefits under the Small Business Borrower Assistance Program excluded from gross income.
Subtitle B—Revenue provisions
Sec. 531. Required minimum 10-year term, etc., for grantor retained annuity trusts.
Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer credit.
Sec. 533. Time for payment of corporate estimated taxes.
Small business tax incentives
General provisions
Temporary exclusion of 100 percent of gain on certain small business stock
In general
Subsection (a) of section 1202 is amended by adding at the end the following new paragraph:
Special 100 percent exclusion
In the case of qualified small business stock acquired after March 15, 2010, and before January 1, 2012—
paragraph (1)
shall be applied by substituting 100 percent
for 50
percent
,
paragraph (2) shall not apply, and
paragraph (7) of section 57(a) shall not apply.
.
Conforming amendments
Paragraph (3) of section 1202(a) is amended—
by striking
after the date of the enactment of this paragraph and before January 1,
2011
and inserting after February 17, 2009, and before March 16,
2010
; and
by striking
Special rules for 2009 and
2010
in the heading and inserting
Special 75 percent
exclusion
.
Effective date
The amendments made by this section shall apply to stock acquired after March 15, 2010.
Limitations and reporting on certain penalties
Limitation on penalty for failure to disclose certain information
In general
Subsection (b) of section 6707A is amended to read as follows:
Amount of penalty
In general
Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any reportable transaction shall be 75 percent of the decrease in tax shown on the return as a result of such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes).
Maximum penalty
The amount of the penalty under subsection (a) with respect to any reportable transaction for any taxable year shall not exceed—
in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person), or
in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).
Minimum penalty
The amount of the penalty under subsection (a) with respect to any transaction for any taxable year shall not be less than $10,000 ($5,000 in the case of a natural person).
.
Effective date
The amendment made by this section shall apply to penalties assessed after December 31, 2006.
Annual reports on penalties and certain other enforcement actions
In general
The Commissioner of Internal Revenue, in consultation with 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 an annual report on the penalties assessed by the Internal Revenue Service during the preceding year under each of the following provisions of the Internal Revenue Code of 1986:
Section 6662A (relating to accuracy-related penalty on understatements with respect to reportable transactions).
Section 6700(a) (relating to promoting abusive tax shelters).
Section 6707 (relating to failure to furnish information regarding reportable transactions).
Section 6707A (relating to failure to include reportable transaction information with return).
Section 6708 (relating to failure to maintain lists of advisees with respect to reportable transactions).
Additional information
The report required under subsection (a) shall also include information on the following with respect to each year:
Any action taken under section 330(b) of title 31, United States Code, with respect to any reportable transaction (as defined in section 6707A(c) of the Internal Revenue Code of 1986).
Any extension of the time for assessment of tax enforced, or assessment of any amount under such an extension, under paragraph (10) of section 6501(c) of the Internal Revenue Code of 1986.
Date of report
The first report required under subsection (a) shall be submitted not later than December 31, 2010.
Other provisions
Increase in amount allowed as deduction for start-up expenditures
In general
Subsection (b) of section 195 is amended by adding at the end the following new paragraph:
Increased limitation for taxable years beginning in 2010 or 2011
In the case of any taxable year beginning in 2010 or 2011, paragraph (1)(A)(ii) shall be applied—
by substituting
$20,000
for $5,000
, and
by substituting
$75,000
for
$50,000
.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2009.
Nonrecourse small business investment company loans from the Small Business Administration treated as amounts at risk
In general
Subparagraph (B) of section 465(b)(6) is amended to read as follows:
Qualified nonrecourse financing
For purposes of this paragraph—
In general
The term qualified nonrecourse financing means any financing—
which is qualified real property financing or qualified SBIC financing,
except to the extent provided in regulations, with respect to which no person is personally liable for repayment, and
which is not convertible debt.
Qualified real property financing
The term qualified real property financing means any financing which—
is borrowed by the taxpayer with respect to the activity of holding real property,
is secured by real property used in such activity, and
is borrowed by the taxpayer from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government.
Qualified SBIC financing
The term qualified SBIC financing means any financing which—
is borrowed by a small business investment company (within the meaning of section 301 of the Small Business Investment Act of 1958), and
is borrowed from, or guaranteed by, the Small Business Administration under the authority of section 303(b) of such Act.
.
Conforming amendments
Subparagraph (A) of section 465(b)(6) is amended—
by striking
in the case of an activity of holding real property,
; and
by striking
which is secured by real property used in such activity
.
Effective date
The amendments made by this section shall apply to loans and guarantees made after the date of the enactment of this Act.
Benefits under the Small Business Borrower Assistance Program excluded from gross income
In general
Part III of subchapter B of chapter 1 is amended by adding at the end the following new section:
Benefits under the Small Business Borrower Assistance Program
In general
Gross income shall not include any amount paid on behalf of a borrower by the Administrator of the Small Business Administration under the Small Business Borrower Assistance program established under section 402 of the Small Business Assistance Fund Act of 2010 (as in effect immediately after the date of the enactment of such Act).
Denial of double benefit
Notwithstanding any other provision of this subtitle, with respect to the person for whose benefit a payment described in subsection (a) is made—
Interest
No deduction shall be allowed for interest to the extent the liability for such interest is covered by such payment.
Payments of principal
If any payment is applied to reduce the principal of the loan to which such payment relates—
Allocation among financed expenditures
Such payment shall be allocated pro rata among the expenditures financed with such loan.
Credits and deductible expenses
No deduction or credit shall be allowed for, or by reason of, any such expenditure to the extent of the amount of the payment allocated to such expenditure under subparagraph (A).
Adjustment of basis
The adjusted basis of any property acquired with such expenditure shall be reduced to the extent of the amount of the payment allocated to such expenditure under subparagraph (A).
.
Clerical amendments
The table of sections for part III of subchapter B of chapter 1 is amended by adding at the end the following new item:
.
Effective date
The amendments made by this section shall apply to payments made after the date of the enactment of this Act.
Revenue provisions
Required minimum 10-year term, etc., for grantor retained annuity trusts
In general
Subsection (b) of section 2702 is amended—
by redesignating paragraphs (1), (2) and (3) as subparagraphs (A), (B), and (C), respectively, and by moving such subparagraphs (as so redesignated) 2 ems to the right;
by striking
For purposes of
and inserting the following:
In general
For purposes of
;
by striking
paragraph (1) or (2)
in paragraph (1)(C) (as so redesignated)
and inserting subparagraph (A) or (B)
; and
by adding at the end the following new paragraph:
Additional requirements with respect to grantor retained annuities
For purposes of subsection (a), in the case of an interest described in paragraph (1)(A) (determined without regard to this paragraph) which is retained by the transferor, such interest shall be treated as described in such paragraph only if—
the right to receive the fixed amounts referred to in such paragraph is for a term of not less than 10 years,
such fixed amounts, when determined on an annual basis, do not decrease relative to any prior year during the first 10 years of the term referred to in subparagraph (A), and
the remainder interest has a value greater than zero determined as of the time of the transfer.
.
Effective date
The amendments made by this section shall apply to transfers made after the date of the enactment of this Act.
Crude tall oil ineligible for cellulosic biofuel producer credit
In general
Clause (iii) of section 40(b)(6)(E) is amended—
by striking
or
at the end of subclause (I),
by striking the
period at the end of subclause (II) and inserting , or
,
by adding at the end the following new subclause:
such fuel has an acid number greater than 25.
, and
by striking
unprocessed
in the heading and inserting
certain
.
Effective date
The amendment made by this section shall apply to fuels sold or used on or after January 1, 2010.
Time for payment of corporate estimated taxes
The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act in effect on the date of the enactment of this Act is increased by 7.75 percentage points.